Exhibit 4.1

EXECUTION VERSION

POWER-ONE, INC.
as Issuer

AND

THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Trustee

Indenture

Dated as of June 17, 2008

8% SENIOR SECURED CONVERTIBLE NOTES DUE 2013

TABLE OF CONTENTS

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INDENTURE , dated as of June 17, 2008, between POWER-ONE, INC., a corporation duly organized and existing under the laws of the State of Delaware, as Issuer (the “ Company ”), having its principal office at 740 Calle Plano, Camarillo, California, and THE BANK OF NEW YORK TRUST COMPANY, N.A., a national banking association, as Trustee (the “ Trustee ”).

RECITALS OF THE COMPANY

WHEREAS , the Company has duly authorized the creation of an issue of 8% Senior Secured Convertible Notes due 2013 (each a “ Security ” and collectively, the “ Securities ”) of the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture; and

WHEREAS , all things necessary to make the Securities, when executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the valid and legally binding obligations of the Company, and to make this Indenture a valid and legally binding agreement of the Company, in accordance with the terms of the Securities and the Indenture, have been done;

NOW, THEREFORE, THIS INDENTURE WITNESSETH , for and in consideration of the premises and the purchases of the Securities by the Holders thereof, it is mutually agreed, for the benefit of the Company and the equal and proportionate benefit of all Holders of the Securities, as follows:

I.  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

1.01                            DEFINITIONS.

“ Act ,” when used with respect to any Holder, has the meaning specified in Section 1.05(a) .

“ Additional Interest ” means Default Additional Interest and Late Filing Additional Interest.

“ Additional Securities ” has the meaning specified in Section 2.17 .

“ Additional Shares ” has the meaning specified in Section 5.03(a) .

“ Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.  For the purposes of this definition, “ control ” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “ controlling ” and “ controlled ” have meanings correlative to the foregoing.

“ Agent Members ” has the meaning specified in Section 2.09(f) .

“ Applicable Price ” has the meaning specified in Section 5.07(n) .

“ Averaging Period ” has the meaning specified in Section 5.07(f) .

“ Bankruptcy Custodian ” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

“ Bankruptcy Law ” means Title 11 of the United States Code or any similar Federal or State law for relief of debtors.

“ Beneficial Owner ” means a “beneficial owner” as determined in accordance with Rule 13d-3 under the Exchange Act.

“ Board of Directors ” means, with respect to any Person, either the board of directors of such Person or any duly authorized committee of that board.

“ Business Day ” means any day, other than a Saturday or a Sunday, that is neither a legal holiday in the City of New York nor a day on which banking institutions are authorized or required by law, regulation or executive order to close in the City of New York.

“ Capital Stock ” means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock and limited liability company interests and, with respect to partnerships, partnership interests (whether general or limited) and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership.

“ Cap Price ” has the meaning set forth in Section 5.07(m) .

“ Cash Equivalents ” means:

(i)                            United States dollars;

(ii)                         securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than twelve months from the date of acquisition;

(iii)                      certificates of deposit and eurodollar time deposits with maturities of twelve months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any domestic commercial bank having combined capital and surplus in excess of $500 million and a Thomson BankWatch Rating at the time of acquisition of “B” or better;

(iv)                     repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (ii) and (iii) above entered into with any financial institution meeting the qualifications specified in clause (iii) above;

(v)                        commercial paper having one of the two highest ratings obtainable from Moody’s Investors Service, Inc. or Standard & Poor’s Rating Services and in each case maturing within six months after the date of acquisition; and

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(vi)                     money market or mutual funds at least 90% of the assets of which constitute cash equivalents of the kinds described in clauses (i) through (v) of this definition.

“ Collateral ” means the assets of the Company and its domestic, first tier, Wholly Owned Subsidiaries and any other property or assets that fall within the definition of “ Pledged Collateral ” under the Pledge Agreement that from time to time secure the Securities, and the payment and performance of all other obligations of the Company to the Holders or the Trustee hereunder.

“ Collateral Agent ” means The Bank of New York Trust Company, N.A. or such successors appointed under the Security Documents.

“ Commission ” means the United States Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act.

“ Common Stock ” means the shares of common stock, par value $0.001 per share, of the Company as they exist on the date of this Indenture or any other Reference Property into which the Common Stock shall be reclassified, changed, converted into or exchanged for in accordance with to Section 5.12 .

“ Company ” means the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “ Company ” shall mean such successor Person.

“ Company Notice ” has the meaning specified in Section 13.03 .

“ Contingent Obligation ” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that person with respect to any Indebtedness, lease or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto; provided , that indemnification provisions not otherwise constituting a guarantee shall not be deemed to be a “contingent obligation.”

“ Continuing Directors ” means (i) individuals who on the Issue Date were members of the Board of Directors of the Company and (ii) any new directors whose election or appointment to the Board of Directors of the Company or nomination for election by the Company’s stockholders was approved by at least a majority of the Company’s directors then still in office (or a duly constituted committee thereof), either who were directors on the Issue Date or whose election, appointment or nomination for election was previously so approved.

“ Conversion Agent ” has the meaning specified in Section 2.06(a)  and shall include any additional conversion agents appointed pursuant to Section 2.06(a) .

“ Conversion Date ” has the meaning specified in Section 5.04(b) .

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“ Conversion Notice ” has the meaning specified in Section 5.04(a) .

“ Conversion Obligation ” has the meaning specified in Section 5.05(a) .

“ Conversion Price ” means, at any time, $1,000 divided by the Conversion Rate as at that time.

“ Conversion Rate ” means the Initial Conversion Rate, as it may be adjusted pursuant to Section 5.03 or Section 5.07 .

“ Corporate Trust Office ” means the office of the Trustee at which the corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, as of the date of this Indenture, located at The Bank of New York Trust Company, N.A., 700 South Flower Street, Suite 500, Los Angeles, California, 90017, Attention:  Corporate Unit, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

“ Custodian ” means the Trustee, as custodian with respect to the Global Securities, or any successor entity.

“ Default ” means any event that is or, with the passage of time or the giving of notice or both, would become an Event of Default.

“ Default Additional Interest ” has the meaning specified in Section 7.03(a) .

“ Delegending Date ” has the meaning specified in Section 2.10(d) .

“ Depositary ” means The Depository Trust Company until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “ Depositary ” shall mean such successor Depositary.

“ Dilutive Issuance ” has the meaning specified in Section 5.07(n) .

“ Distributed Property ” has the meaning specified in Section 5.07(d) .

“ Effective Date ” has the meaning specified in Section 5.03(c) .

“ Event of Default ” has the meaning specified in Section 7.01 .

“ Ex-Date ” means, with respect to any issuance or distribution to holders of the Common Stock, the first date on which the shares of the Common Stock trade on the Relevant Exchange, regular way, without the right to receive such issuance or distribution.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Excluded Securities ” means any Common Stock issued or issuable: (i) in connection with any employee benefit plan or agreement which has been, as of the date of determination,

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approved by the Company’s Board of Directors, pursuant to which the Company’s securities may be issued in the ordinary course of business to any consultant, employee, officer or director for services provided to the Company or any of its subsidiaries; (ii) upon conversion of the Securities; (iii) pursuant to any bona fide firm commitment underwritten public offering with a nationally recognized underwriter, which generates gross proceeds to the Company in excess of $50,000,000 (other than an “at-the-market offering” as defined in Rule 415(a)(4) under the 1933 Act and “equity lines”); (iv) upon exercise or conversion of any options (including the warrants held by PWER Bridge LLC) or convertible securities which are outstanding on June 11, 2008, provided that the terms of such options or convertible securities are not materially amended, modified or changed on or after June 12, 2008 in a manner adverse to the holders; (v) pursuant to rights under the Rights Agreement, dated as of July 27, 2000, between the Company and the rights agent named therein or any similar successor agreement (the “ Rights Plan ”) and (vi) directly on an arm’s-length basis to an unrelated third party in connection with bona fide, strategic transactions, joint ventures, collaborations, licenses of products or technology, or similar transactions approved by the Company’s Board of Directors; provided that the primary purpose of such issuance is not to raise equity capital.

“ Fundamental Change ” means the occurrence of any one of the following events at any time after the Issue Date:

(a)                                   any Person other than the Company, its Subsidiaries or its or their employee benefit plans, files a Schedule TO or any similar schedule, form or report under the Exchange Act disclosing that such Person has become the direct or indirect ultimate Beneficial Owner of the Company’s Capital Stock representing more than 50% of the total voting power of all shares of the Capital Stock of the Company entitled to vote generally in elections of directors;

(b)                                  the Company (1) merges or consolidates with or into any other Person, another Person merges with or into the Company, or the Company conveys, sells, transfers or leases all or substantially all of its assets to another Person (excluding a pledge of securities issued by the Company or any of its Subsidiaries) or (2) engages in any recapitalization, reclassification or other acquisition transaction or series of transactions in which all or substantially all the Common Stock is exchanged for or converted into cash, securities or other property, in each case, other than any merger or consolidation:

(i)                            pursuant to which the holders of the Common Stock immediately prior to the transaction have the entitlement to exercise, directly or indirectly, 50% or more of the voting power of all shares of Capital Stock entitled to vote generally in the election of directors of either (A) the continuing or surviving corporation immediately after the transaction or (B) the corporation that directly or indirectly owns 100% of the Capital Stock of such continuing or surviving corporation;

(ii)                         that does not result in a reclassification, conversion, exchange or cancellation of the outstanding Common Stock; or

(iii)                      that is effected solely to change the Company’s jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding shares of the Common Stock solely into shares of common stock of the surviving entity;

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(c)                                   at any time the Continuing Directors do not constitute a majority of Board of Directors of the Company (or, if applicable, of a successor person to the Company); or

(d)                                  if shares of the Common Stock, or shares of any other Capital Stock into which the Securities are convertible pursuant to the terms of this Indenture, are not listed for trading on any United States national or regional securities exchange.

Notwithstanding the foregoing, any transaction or event described above shall not constitute a Fundamental Change if, in connection with such transaction or event, or as a result therefrom, a transaction described in clause (b)  above occurs (without regard to any exclusion to such clause described in the paragraphs (i) , (ii)  or (iii)  thereunder) and at least 90% of the consideration paid for the Common Stock (excluding cash payments for fractional shares, cash payments made pursuant to dissenters’ appraisal rights and cash dividends) consists of shares of common stock (or depositary receipts in respect thereof) traded on any Relevant Exchange (or will be so traded or quoted immediately following the completion of the merger or consolidation or such other transaction) and, as a result of such transaction, the Securities become convertible into such Common Stock (or depositary receipts in respect thereof) pursuant to Section 5.12 .

For the purposes of this definition, the term “ Person ” has the meaning specified in Section 1.01 and also includes any syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act.

“ Fundamental Change Expiration Time ” has the meaning specified in Section 4.02(b) .

“ Fundamental Change Repurchase Date ” has the meaning specified in Section 4.02(a) .

“ Fundamental Change Repurchase Notice ” has the meaning specified in Section 4.02(b) .

“ Fundamental Change Repurchase Price ” has the meaning specified in Section 4.02(a) .

“ Fundamental Change Repurchase Right Notice ” has the meaning specified in Section 4.01(a) .

“ GAAP ” means generally accepted accounting principles set forth in the opinions and pronouncements of the Public Company Accounting Oversight Board and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, in each case, as in effect in the United States from time to time.

“ Global Security ” means a Security in global form registered in the Security Register in the name of a Depositary or a nominee thereof.

“ Holder ” means a Person in whose name a Security is registered in the Security Register.

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“ Indebtedness ” of a Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed as the deferred purchase price of property or services, including (without limitation) capital leases in accordance with GAAP (other than trade payables entered into in the ordinary course of business and any liabilities relating to the application of FASB 133 or any other related accounting literature under GAAP or in connection with embedded or standalone derivatives related to indebtedness), (iii) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (vi) all monetary obligations under any leasing or similar arrangement that would be classified as a capital lease in accordance with GAAP, (vii) all indebtedness referred to in clauses (i)  through (vi)  above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, Lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (viii) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (i)  through (vii)  above; and provided, however, that neither the accrual of interest nor the accretion of original issue discount (in each case, whether as the issuance of pay-in-kind securities or otherwise) nor imputed interest, cost or premiums shall be deemed to be Indebtedness for purposes of this definition.

“ Indenture ” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof.

“ Indenture Documents ” means, collectively, this instrument, the Pledge Agreement and the Security Documents, in each case, as amended from time to time in accordance with the terms thereof.

“ Initial Conversion Rate ” means 304.8780 shares of Common Stock per $1,000 principal amount of Securities.

“ Initial Purchaser ” means the initial purchaser of the securities under the Purchase Agreement.

“ interest ” means, when used with reference to the Securities, any interest payable under the terms of the Securities, including any Additional Interest payable under the terms of the Securities.

“ Interest Payment Date ” means each March 31, June 30, September 30 and December 31 of each year, commencing September 30, 2008.

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“ Issue Date ” means June 17, 2008, being the date the Securities are originally issued.

“ Last Reported Sale Price ” means, with respect to the Common Stock or any other security for which a Last Reported Sale Price must be determined, on any date, the closing sale price per share of Common Stock or unit of such other security (or, if no closing sale price is reported, the average of the last bid and last ask prices or, if more than one in either case, the average of the average last bid and the average last ask prices) on such date as reported in composite transactions for the Relevant Exchange, if any.  If the Common Stock or such other security is not listed for trading on a United States national or regional securities exchange on such date, the “ Last Reported Sale Price ” shall be the average of the last quoted bid and ask prices per share of Common Stock or unit of such other security in the over-the-counter market on such date, as reported by Pink Sheets LLC or similar organization.  If the Common Stock or such other security is not so quoted, the “ Last Reported Sale Price ” shall be the average of the mid-point of the last bid and ask prices for the Common Stock or such other security on such date from each of at least three nationally recognized independent investment banking firms, selected from time to time by the Company for that purpose.  The Last Reported Sale Price shall be determined without reference to extended or after hours trading.  Any such determination shall be conclusive absent manifest error.

“ Late Filing Additional Interest ” has the meaning specified in Section 3.05(a) .

“ Lien ” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

“ LTM EBITDA ” shall mean, with respect to the Company and its Subsidiaries on a consolidated basis for the most recent twelve-month period for which financial statements are, or are made, publicly available, the consolidated net income of the Company and its Subsidiaries for such period (treated as a single period), plus for such period, to the extent such amount was deducted in calculating such consolidated net income,

(a)                                   the sum of (in each case without duplication):

(i)                                      provision for taxes based on income, profits or capital of the Company and its Subsidiaries for such period, including, without limitation, state, franchise and similar taxes, and taxes paid by the Company and its Subsidiaries during such period,

(ii)                                   interest expense of the Company and its Subsidiaries for such period plus the amount of dividends and accretion on preferred capital stock, and accretion of discounts on the Company’s debt, for such period,

(iii)                                depreciation and amortization expenses of the Company and its Subsidiaries for such period,

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(iv)                               business optimization expenses and restructuring charges and reserves, in each case based on the good faith determination of the audit committee of the Company’s Board of Directors (which, for the avoidance of doubt, shall include retention, severance, systems establishment cost, excess pension charges, contract termination costs (including future lease commitments) and costs to consolidate facilities and relocate employees),

(v)                                  any other non-cash charges or other non-cash items (including, without limitation, non-cash charges or other non-cash items relating to the application of FASB 133 or any other related accounting literature under GAAP or in connection with embedded or standalone derivatives related to indebtedness, or the write-off of goodwill or other intangibles in accordance with SFAS 142 or SFAS 144, or any non-cash compensation charges in accordance with SFAS 123(R)); provided that, for purposes of this subclause (v) , any non-cash charges, other non-cash items or losses shall be treated as cash charges, other non-cash items or losses in any subsequent period during which cash disbursements attributable thereto are made, and

(vi)                               Transaction Costs,

minus for such period

(b)                                  the sum of (in each case without duplication), non-cash gains from:

(i)                                      the disposition of assets,

(ii)                                   the change of estimates, and

(iii)                               change of actuarial assumptions.

“ Make-Whole Fundamental Change ” means any transaction or event that constitutes a Fundamental Change pursuant to clauses (a)  or (b)  of the definition thereof other than, for the avoidance of doubt, any such transaction or event that is not a Fundamental Change as a result of the paragraph following clause (d)  thereof.

“ Market Disruption Event ” means the occurrence or existence on any Scheduled Trading Day for the Common Stock of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the Relevant Exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to the Common Stock on the Relevant Exchange, and such suspension or limitation occurs or exists at any time within the 30 minutes prior to the closing time of the Relevant Exchange on such day.

“ Maturity ” means, in respect of any Security, the date on which the principal, Fundamental Change Repurchase Price or Redemption Price of such Security becomes due and payable pursuant to this Indenture, whether at the Stated Maturity Date, Fundamental Change Repurchase Date or Redemption Date, by declaration of acceleration or otherwise.

“ New Issuance Price ” has the meaning specified in Section 5.07(n) .

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“ Officer ” means each of the Chief Executive Officer, the President, the Chief Financial Officer, the Treasurer and the Secretary, of the Company.

“ Officers’ Certificate ” means a certificate signed by two Officers, or by one Officer and any Senior Vice President of the Company, and delivered to the Trustee.

“ Opinion of Counsel ” means a written opinion of counsel for the Company, who may be external or in-house counsel.

“ Outstanding ” means, in respect of a Security, that such Security is outstanding pursuant to the terms of Section 2.13 .

“ PAI ” means PAI Capital LLC, a limited liability company established under the laws of the State of Delaware.

“ Paying Agent ” has the meaning specified in Section 2.06(a)  and shall include any additional paying agents appointed pursuant to Section 2.06(a) .

“ Permitted Indebtedness ” means (i) the Indebtedness evidenced by the Securities, (ii) unsecured Indebtedness incurred by the Company that is made expressly subordinate in right of payment to the Indebtedness evidenced by the Securities, provided that such Indebtedness does not provide for (A) the payment, prepayment, repayment, repurchase or defeasance, directly or indirectly, of any principal or premium, if any, thereon until ninety-one (91) days after the maturity date of the Securities or later and (B) total interest and fees at a rate in excess of eight percent (8%) per annum, (iii) Indebtedness of the Company and its Subsidiaries outstanding as of the date of this Indenture (which, for the avoidance of doubt, shall include the maximum principal amount that may be borrowed under any outstanding revolving credit facility), (iv) Indebtedness secured by Permitted Liens, (v)   unsecured obligations or Indebtedness to trade creditors of the Company or any of its Subsidiaries incurred in the ordinary course of business, (vi) extensions, refinancings and renewals of any items of Permitted Indebtedness, provided that (W) the principal amount is not increased, (X) the stated maturity date is not made earlier, (Y) if the Indebtedness being extended, refinanced or renewed is subordinate in right of payment to the Indebtedness evidenced by the Securities, such extended, refinanced or renewed Indebtedness is subordinated in right of payment to the Securities on terms at least as favorable in the aggregate to the Holders of the Securities as those contained in the documentation governing the Indebtedness being extended, refinanced or renewed and (Z) such Indebtedness is incurred either by (1) the Subsidiary who is the obligor on the Indebtedness being extended, refinanced or renewed or (2) the Company, (vii) Indebtedness in the form of a bond or other obligation in favor of a foreign tax authority to secure actual or potential tax obligations to it and (viii) any Indebtedness not otherwise set forth in clauses (i)  through (vii)  above, provided that the aggregate amount of such Indebtedness shall not exceed $10 million.

“ Permitted Liens ” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation of law, arising in the ordinary course of business with respect to a

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liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iv) easements, rights-of-way, municipal and zoning and building ordinances and similar charges, encumbrances, title defects or other irregularities, governmental restrictions on the use of property or conduct of business, and Liens in favor of governmental authorities and public utilities, that do not materially interfere with the ordinary course of business of the Company and its Subsidiaries, taken as a whole, (v) Liens securing obligations under indebtedness included in clauses (i) and (iii) of the definition of Permitted Indebtedness, (vi) Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment or Indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such equipment, (vii) Liens on property of, or on shares of stock or Indebtedness of, any corporation existing at the time such corporation becomes, or becomes a part of, any Subsidiary; provided that such Liens do not extend to or cover any property or assets of the Company or any Subsidiary other than the property or assets acquired and the proceeds and products thereof and were not incurred in anticipation of such Person becoming a Subsidiary; (viii) Liens incurred in connection with the extension, renewal or refinancing of any Indebtedness secured by Liens of the type described in clauses (v)  and (vi)  above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien, (ix) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by the Company or any of its Subsidiaries, (x) any option or other agreement to purchase any asset of the Company or any Subsidiary the purchase, sale or other disposition of which is not prohibited by any provision of the Securities, (xi) leases or subleases and licenses and sublicenses granted to others in the ordinary course of the Company ’s business, not interfering in any material respect with the business of the Company and its Subsidiaries taken as a whole, (xii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods and (xiii) Liens arising from judgments, decrees or attachments other than orders or decrees constituting a bankruptcy-related event of default.

“ Person ” means any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.

“ Physical Securities ” means permanent certificated Securities in registered form issued in denominations of $1,000 principal amount and integral multiples thereof.

“ Pledge Agreement ” means that certain Pledge and Security Agreement, dated as of even date herewith, by the Company and certain of its Subsidiaries in favor of the Trustee, as such agreement may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.

“ Pledged Equity Co-Collateral Agents ” has the meaning specified in Section 13.01(b) .

“ Pledged Subsidiaries ” means each first tier Subsidiary of the Company, Capital Stock in which constitutes “Pledged Collateral” under and as defined in the Pledge Agreement.

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“ PowerOne UK ” means Power-One Limited, a UK company incorporated in England and Wales with registration number 3103043.

“ Protected Purchaser ” has the meaning specified in Section 2.12(a) .

“Purchase Agreement” means the Purchase Agreement between the Company and Lehman Brothers Inc., dated June 12, 2008, relating to the Securities,

“ Ratio Event ” has the meaning specified in Section 4.05(a) .

“ Ratio Event Expiration Time ” has the meaning specified in Section 4.06(b) .

“ Ratio Event Repurchase Date ” has the meaning specified in Section 4.06(a) .

“ Ratio Event Repurchase Notice ” has the meaning specified in Section 4.06(b) .

“ Ratio Event Repurchase Period ” has the meaning specified in Section 4.06(a) .

“ Ratio Event Repurchase Price ” has the meaning specified in Section 4.06(a) .

“ Ratio Event Repurchase Right Notice ” has the meaning specified in Section 4.05(a) .

“ Record Date ” means, with respect to any Interest Payment Date, the March 15, June 15, September 15 or December 15 immediately preceding such Interest Payment Date (whether or not a Business Day).

“ Redemption Date ” means, with respect to any Security to be redeemed, the date fixed for redemption of such Security by the Company.

“ Redemption Notice ” has the meaning specified in Section 4.11(a) .

“ Redemption Price ” has the meaning specified in Section 4.09(a) .

“ Reference Property ” has the meaning specified in Section 5.12(a) .

“ Released Collateral ” has the meaning specified in Section 13.03 .

“ Relevant Exchange ” means, at any time, the principal United States national or regional securities exchange or market on which the Common Stock is listed or admitted for trading at such time.

“ Reorganization Event ” has the meaning specified in Section 5.12(a) .

“ Resale Restriction Termination Date ” has the meaning specified in Section 2.10(a) .

“ Responsible Officer ” means any officer of the Trustee within the corporate trust department of the Trustee including any vice president, assistant vice president, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively,

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with direct responsibility for the administration of this Indenture and also, with respect to a particular matter, any other officer of the Trustee to whom such matter is referred because of such officer’s knowledge and familiarity with the particular subject.

“ Restricted Security ” has the meaning specified in Section 2.10(b) .

“ Restricted Security Legend ” has the meaning specified in Section 2.10(a) .

“ Rule 144 ” means Rule 144 under the Securities Act (including any successor rule thereto), as the same may be amended from time to time.

“ Rule 144A ” means Rule 144A under the Securities Act (including any successor rule thereto), as the same may be amended from time to time.

“ Scheduled Trading Day ” means a day during which trading in the Common Stock is scheduled to occur on the Relevant Exchange.  If the Common Stock is not then listed or admitted for trading on a United States national or regional securities exchange or market, “ Scheduled Trading Day ” shall mean a Business Day.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

“ Security ” has the meaning specified in the first paragraph of the Recitals of the Company.

“ Security Documents ” means, collectively, the Pledge Agreement and all other security agreements, mortgages, deeds of trust, pledges, collateral assignments and other agreements or instruments evidencing or creating any security in favor of the Trustee and any Holders in any or all of the Collateral, (including, without limitation, (a) the pledge agreement dated on or about the Closing Date and entered into between the Company, as chargor and The Bank of New York Trust Company (Cayman) Limited , as chargee in its own name and behalf and in the name of and on behalf of the other secured creditors referred to therein (the “ Cayman Pledge Agreement ”), relating to the shares representing 66% of the corporate capital, as issued from time to time and paid up, of Power-One Limited, a company incorporated in the Cayman Islands, (b) the pledge agreement dated on or about the Closing Date and entered into between PAI, as pledgor and The Bank of New York, as pledgee in its own name and behalf and in the name of and on behalf of the other secured creditors referred to therein (the “ Chinese Pledge Agreement ”), relating to the shares representing 66% of the corporate capital, as issued from time to time and paid up, of Shenzhen, a wholly foreign owned limited liability company established under the laws of the People’s Republic of China, (c) the pledge agreement dated on or about the Closing Date and entered into between the Company, as pledgor and The Bank of New York (Luxembourg) S.A. , as collateral agent in its own name and behalf and in the name of and on behalf of the other secured creditors referred to therein (the “ Italian Pledge Agreement ”), relating to the shares representing 66% of the corporate capital, as issued from time to time and paid up, of Power-One Italy Holdings, S.p.A., an Italian corporation with, as of the Closing Date, corporate capital of Eur. 120,000.00, and with its principal place of business at via Birmania 81, Rome, Italy, fiscal code 09159521005 and (d) the pledge agreement dated on or about the Closing Date and entered into between the Company, as pledgor and BNY Corporate

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Trust Services Limited, as collateral agent in its own name and behalf and in the name of and on behalf of the other secured creditors referred to therein (the “ UK Pledge Agreement ”), relating to the shares representing 60.1% of 66% of the corporate capital, as issued from time to time and paid up, of PowerOne UK) in each case, as amended from time to time in accordance with the terms thereof.

“ Security Register ” has the meaning specified in Section 2.06(b) .

“ Security Registrar ” has the meaning specified in Section 2.06(a)  and shall include any co-registrars appointed pursuant to Section 2.06(a) .

“ Shenzhen ” means Power-One Asia Pacific Electronics (Shenzhen) Co., Ltd., a wholly foreign owned limited liability company established under the laws of the People’s Republic of China.

“ Significant Subsidiary ” means any subsidiary, or group of subsidiaries, that would constitute a “significant subsidiary” under Regulation S-X under the Securities Act.

“ Spin-Off ” has the meaning specified in Section 5.07(d) .

“ Stated Maturity Date ” means, for any Security, June 17, 2013.

“ Stock Price ” means, for a Make-Whole Fundamental Change (a) if holders of the Common Stock receive only cash consideration for their shares of Common Stock in connection with such Make-Whole Fundamental Change, the cash amount paid per share of Common Stock and (b) in all other cases, the average of the Last Reported Sale Prices of the Common Stock over the ten consecutive Trading Day period ending on the Trading Day immediately preceding the Effective Date of such Make-Whole Fundamental Change.

“ Subordinated Indebtedness ” means any Indebtedness of the Company or its Subsidiaries (whether outstanding on the Issue Date or thereafter incurred) that is subordinate or junior in right of payment to the Securities pursuant to a written agreement.

“ Subsidiary ” means a corporation, association, company, limited partnership, joint-stock company or business trust more than 50% of the outstanding voting stock or other voting interests of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries.  For the purposes of this definition, “voting stock or other voting interests” means stock or other voting interests which ordinarily have voting power for the election of directors or comparable governing body, whether at all times or only so long as no senior class of stock or other interests has such voting power by reason of any contingency.

“ Successor Company ” has the meaning specified in Section 8.01(a)(i) .

“ Tangible Net Worth ” means, with respect to any Person at any date of determination, its consolidated stockholders’ equity, as determined on a consolidated basis, excluding the impact of non-cash charges or other non-cash items relating to the application of FASB 133 or any other related accounting literature under GAAP or in connection with embedded or standalone

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derivatives related to Indebtedness, minus the aggregate intangible assets of such Person, as determined on a consolidated basis.

“ Total Debt ” means, as of any date of determination, the total amount of Indebtedness that would appear as such on the balance sheet of a Person as of such date, prepared in accordance with GAAP.

“ Total Net Debt ” means, as of any date of determination and in respect of any Person, the total amount of Indebtedness that would appear as such on the balance sheet of such Person, minus the total amount of cash and Cash Equivalents that would appear as such on such balance sheet of such Person, in each case as of the same date and as prepared in accordance with GAAP.

“ Trading Day ” means a day during which (a) trading in the Common Stock generally occurs on the Relevant Exchange and (b) there is no Market Disruption Event.  If the Common Stock is not then listed or admitted for trading on a United States national or regional securities exchange or market, then “ Trading Day ” means a Business Day.

“ Transaction Costs ” means all fees, costs and expenses incurred by the Company in connection with the offering of the Securities and the application of the net proceeds thereof, including all fees, costs and expenses relating to this Indenture, the Security Documents, the Purchase Agreement relating to the Securities, and any other document prepared in connection therewith and the application of the proceeds thereof relating to the payoff of outstanding Indebtedness and the release of related Liens and all costs, fees and expenses associated with any amendment or waiver under any such document, together with all fees, costs and expenses of financial, legal and accounting advisors related thereto.

“ Trust Indenture Act ” means the Trust Indenture Act of 1939 as in effect on the date as of which this Indenture was executed; provided, however , that in the event the Trust Indenture Act of 1939 is amended after such date, “ Trust Indenture Act ” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.

“ Trustee ” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “ Trustee ” shall mean such successor Trustee.

“ United States ” means the United States of America.

“ Valuation Period ” has the meaning specified in Section 5.07(d) .

“VWAP” means the volume weighted average price and refers to such price as reported by the Bloomberg Professional Service provided by Bloomberg L.P. or, if such service is no longer providing such information, such other comparable service as the Company shall reasonably specify. To the extent that Common Stock is listed on The Nasdaq Global Market, the VWAP on The Nasdaq Global Market will be determined based on the Bloomberg function: “TICKER [PWER] EQUITY AQR” or a successor function on such service.  If for whatever reason the VWAP is unavailable for a Trading Day, then the Last Reported Sale Price of Common Stock on that Trading Day shall be used in lieu of the VWAP.

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“ Wholly Owned Subsidiary ” of any Person means a Subsidiary of such Person, all the Capital Stock of which (other than directors’ qualifying shares) is owned by such Person or another Wholly Owned Subsidiary of such Person.

1.02                            RULES OF CONSTRUCTION.

For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

(a)                                   the terms defined in Section 1.01 have the meanings assigned to them in Section 1.01 and include the plural as well as the singular;

(b)                                  all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP; and

(c)                                   the words “herein,” “hereof’ and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

1.03                            COMPLIANCE CERTIFICATES AND OPINIONS.

(a)                                   Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required hereunder.  Each such certificate or opinion shall be given in the form of an Officers’ Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with any other requirement set forth in this Indenture.

(b)                                  Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(i)                                      a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(ii)                                   a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(iii)                                a statement that, in the opinion of each such individual, such individual has made such examination or investigation as is necessary to enable such individual to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(iv)                               a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

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1.04                          FORM OF DOCUMENTS DELIVERED TO TRUSTEE.

(a)                                   In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

(b)                                  Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous.  Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous.

(c)                                   Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

1.05                          ACTS OF HOLDERS; RECORD DATES.

(a)                                   Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as an “ Act ” of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 9.01 ) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section 1.05 .

(b)                                  The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof.  Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority.  The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee reasonably deems sufficient.

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(c)                                   The Company may fix any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted to be given or taken by Holders.  If not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30 th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 10.01 ) prior to such first solicitation or vote, as the case may be.  With regard to any record date, only the Holders on such date (or their duly designated proxies) shall be entitled to give or take, or vote on, the relevant action.

(d)                                  The ownership of the Securities shall be proved by the Security Register.

(e)                                   Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.

1.06                          NOTICES, ETC., TO TRUSTEE AND COMPANY.

Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with:

(i)                                      the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its applicable Corporate Trust Office provided that such notice shall be effective only upon actual receipt by the Trustee; or

(ii)                                   the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company, Attention:  General Counsel.

1.07                          NOTICE TO HOLDERS; WAIVER.

(a)                                   Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at such Holder’s address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice.  In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders.  Notices will be deemed to have been given on the date of mailing.  Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed with the Trustee, but such

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filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

(b)                                  In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

(c)                                   Whenever under this Indenture the Trustee is required to provide any notice by mail, in all cases the Trustee may alternatively provide notice by overnight courier or by telefacsimile, with confirmation of transmission.

1.08                          EFFECT OF HEADINGS AND TABLE OF CONTENTS.

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof, and all Article and Section references are to Articles and Sections, respectively, of this Indenture unless otherwise expressly stated.

1.09                          SEVERABILITY CLAUSE.

In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

1.10                          BENEFITS OF INDENTURE.

Except as provided in Article 13 hereof, nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their respective successors hereunder and the Holders of Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture.

1.11                          GOVERNING LAW.

This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York.

1.12                          NO RECOURSE AGAINST OTHERS.

No director, officer, employee, stockholder or Affiliate of the Company from time to time shall have any liability for any obligations of the Company under the Securities or this Indenture.  Each Holder by accepting a Security waives and releases such liability.

II.  THE SECURITIES

2.01                          DESIGNATION, AMOUNT AND ISSUANCE OF SECURITIES.

The Securities shall be designated as “8% Senior Secured Convertible Notes due 2013.”  The Securities shall be limited to an aggregate principal amount of up to $80,000,000, subject to

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Section 2.17 .  Upon the execution of this Indenture, or from time to time thereafter, Securities may be executed by the Company and delivered to the Trustee for authentication in accordance with Section 2.05 .

2.02                          FORM OF THE SECURITIES.

(a)                                   The Securities and the Trustee’s certificate of authentication to be borne by such Securities shall be substantially in the form set forth in Exhibit A hereto.  The terms and provisions contained in the form of Securities attached as Exhibit A hereto shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.

(b)                                  Any of the Securities may have such letters, numbers or other marks of identification and such notations, legends, endorsements or changes as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required by the custodian for the Global Securities, the Depositary or by The Nasdaq Stock Market, Inc. in order for the Securities to be tradable on The PORTAL Market or as may be required for the Securities to be tradable on any other market developed for trading of securities pursuant to Rule 144A or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Securities may be listed, or to conform to usage, or to indicate any special limitations or restrictions to which any particular Securities are subject.

(c)                                   So long as the Securities are eligible for book-entry settlement with the Depositary, or unless otherwise required by law, subject to Section 2.09 , all of the Securities will be represented by one or more Global Securities.  The transfer and exchange of beneficial interests in any such Global Securities shall be effected through the Depositary in accordance with this Indenture and the applicable procedures of the Depositary.  Except as provided in Section 2.09 , beneficial owners of a Global Security shall not be entitled to have certificates registered in their names, will not receive or be entitled to receive physical delivery of certificates in definitive form and will not be considered Holders of such Global Security.

(d)                                  Any Global Security shall represent such of the outstanding Securities as shall be specified therein and shall provide that it shall represent the aggregate amount of outstanding Securities from time to time endorsed thereon and that the aggregate amount of outstanding Securities represented thereby may from time to time be increased or reduced to reflect issuances, repurchases, conversions, transfers or exchanges permitted hereby.  Any endorsement of a Global Security to reflect the amount of any increase or decrease in the amount of outstanding Securities represented thereby shall be made by the Trustee or the custodian for the Global Security, at the direction of the Trustee, in such manner and upon instructions given by the Holder of such Securities in accordance with this Indenture.

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2.03                          DATE AND DENOMINATION OF SECURITIES AND INTEREST.

The Securities shall be issuable in fully registered form without coupons in denominations of $1,000 principal amount and integral multiples thereof.  Each Security shall be dated the date of its authentication and shall bear interest from the date specified on the face of the form of Securities attached as Exhibit A hereto.  Interest on the Securities shall be computed on the basis of a 360-day year comprised of twelve 30-day months.

2.04                          PAYMENTS ON THE SECURITIES.

(a)                                   On the Stated Maturity Date, each Holder shall be entitled to receive on such date the principal amount of the Securities held, plus accrued and unpaid interest to, but not including, the Stated Maturity Date.

(b)                                  On each Interest Payment Date, the Person in whose name a Security is registered on the Register at the close of business on the Record Date for such Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date, except that the interest payable upon Maturity shall be payable to the Person to whom principal is payable upon Maturity.

(c)                                   If any Interest Payment Date or any date on which principal or any other amount is payable in respect of the Securities falls on a day that is not a Business Day, such payment of interest or principal, as the case may be, shall be postponed to the next succeeding Business Day and no interest or other amount shall be paid as a result of such postponement.

(d)                                  The Company shall pay any amount of principal when due:

(i)                                      with respect to Global Securities, to the Depositary or its nominee in immediately available funds; and

(ii)                                   with respect to Physical Securities, at the office of the Paying Agent, which initially shall be the Corporate Trust Office.

(e)                                   The Company shall pay interest on each Interest Payment Date:

(i)                                      with respect to any Global Securities by wire transfer of immediately available funds to the account of the Depositary or its nominee;

(ii)                                   with respect to any Physical Securities having a principal amount of $2,000,000 or less, by check mailed to the address of the Person entitled thereto as it appears in the Security Register; provided that at Maturity, interest will be payable at the office of the Company maintained by the Company for such purposes, which shall initially be the Corporate Trust Office; and

(iii)                                with respect to any Physical Securities having a principal amount of more than $2,000,000, either (A) by check mailed to the address of the Person entitled thereto as it appears in the Security Register or (B) at the election of the Person entitled thereto, by wire transfer in immediately available funds to an account within the United States of

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such Person if such Person has duly delivered notice of such election and applicable wire instructions to the Registrar not later than the Record Date for such Interest Payment Date and has not delivered notice to the Registrar revoking such election prior to such Record Date; provided that at Maturity, interest will be payable at the office of the Company maintained by the Company for such purposes, which shall initially be the Corporate Trust Office.

(f)                                     If the Company is required to pay any Additional Interest under this Indenture, the Company shall pay such Additional Interest to Holders on the same dates and in the same manner as regular interest is paid to Holders, except as set forth in Section 3.05 and Section 7.03 .

2.05                          EXECUTION AND AUTHENTICATION.

(a)                                   One or more Officers shall sign the Securities for the Company by manual or facsimile signature.  If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.

(b)                                  The Company shall deliver the Securities executed by the Company to the Trustee for authentication together with an authentication order executed by the Chief Executive Officer of the Company ordering the authentication and delivery of such Securities, which authentication order shall set forth the number of separate Securities certificates, the principal amount of each of the Securities to be authenticated, the date on which the original issue of Securities is to be authenticated, the Holder of each such Security and delivery instructions.  Upon receipt of such executed Securities and such authentication order, the Trustee shall authenticate and deliver such Securities in accordance with such authentication order.

(c)                                   A Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Security.  The signature shall be conclusive evidence that the Security has been authenticated under this Indenture.

(d)                                  The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Securities.  Any such appointment shall be evidenced by an instrument signed by a Responsible Officer, a copy of which shall be furnished to the Company.  Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as any Security Registrar, Paying Agent or agent for service of notices and demands.

2.06                          SECURITY REGISTRAR, PAYING AGENT AND CONVERSION AGENT.

(a)                                   The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange (the “ Security Registrar ”), an office or agency where Securities may be presented for payment (the “ Paying Agent ”) and an office or agency where Securities may be presented for conversion (the “ Conversion Agent ”), in each case, in the Borough of Manhattan, The City of New York.  The Company initially appoints the Trustee as Security Registrar, Conversion Agent and Paying Agent in connection with the Securities.  The Bank of New York, an Affiliate of the Trustee, located at 101 Barclay Street,

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8W, New York, New York 10286, Attn: Corporate Trust Administration, shall be considered as one such office or agency of the Company for each of the aforesaid purposes.  The Company or any of its domestically organized Wholly Owned Subsidiaries may act as Paying Agent, Conversion Agent or Security Registrar.  The Company may from time to time appoint one or more additional Conversion Agents, Paying Agents and co-registrars and may from time to time rescind such designations.

(b)                                  The Security Registrar shall keep a register of the Securities (the “ Security Register ”) and of their transfer and exchange.

(c)                                   The Company shall enter into an appropriate agency agreement with any Security Registrar, Paying Agent or Conversion Agent not a party to this Indenture.  Each such agreement shall implement the provisions of this Indenture that relate to such agent.

(d)                                  The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of each such office or agency, if not the Trustee, or if not designated or appointed by the Trustee.

(e)                                   If at any time the Company fails to maintain a Security Registrar, Paying Agent or Conversion Agent or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

(f)                                     The Company may remove any Security Registrar, Paying Agent or Conversion Agent at any time and without prior notice to Holders by written notice to such Security Registrar, Paying Agent or Conversion Agent and to the Trustee; provided that no such removal shall become effective until (i) acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Company and such successor Security Registrar, Paying Agent or Conversion Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Security Registrar, Paying Agent or Conversion Agent until the appointment of a successor in accordance with clause (i)  above.  The Security Registrar, Paying Agent or Conversion Agent may resign at any time upon written notice; provided that the Trustee may resign as Paying Agent, Conversion Agent or Security Registrar only if the Trustee also resigns as Trustee in accordance with Section 9.11 .

2.07                          PAYING AGENT TO HOLD MONEY IN TRUST.

(a)                                   On or prior to each due date of the principal and interest on any Security, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal and interest when so becoming due.  If the Company or a Wholly Owned Subsidiary of the Company acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund for the benefit of the Persons entitled thereto.  If such deposit is made, or such segregation is effected, on a due date for such principal or interest, such deposit shall be received, or such segregation shall be effected, by 11:00 a.m., New York City time, on such due date.

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(b)                                  The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities and shall notify the Trustee of any default by the Company in making any such payment.

(c)                                   The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent.  Upon complying with this Section 2.07 , the Paying Agent shall have no further liability for the money delivered to the Trustee.

2.08                          EXCHANGE AND REGISTRATION OF TRANSFER OF SECURITIES.

(a)                                   The Company shall cause to be kept at the Corporate Trust Office the Security Register in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities.  The Security Register shall be in written form or in any form capable of being converted into written form within a reasonably prompt period of time.

(b)                                  Upon surrender for registration of transfer of any Securities to the Security Registrar, and satisfaction of the requirements for such transfer set forth in this Section 2.08 and in Section 2.10 , the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of any authorized denominations and of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture.

(c)                                   Securities may be exchanged for other Securities of any authorized denominations and of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture, upon surrender of the Securities to be exchanged at the office of the Security Registrar.  Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities that the Holder making the exchange is entitled to receive bearing registration numbers not contemporaneously outstanding.

(d)                                  All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.

(e)                                   All Securities presented or surrendered for registration of transfer or for exchange, repurchase, redemption or conversion shall (if so required by the Company or the Security Registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company, duly executed by the Holder thereof or his attorney duly authorized in writing.

(f)                                     No service charge shall be made to any Holder for any registration of, transfer or exchange of Securities, but the Company may require payment by the Holder of a sum sufficient to cover any tax, assessment or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities.

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(g)                                  Neither the Company nor the Trustee nor any Security Registrar shall be required to exchange, issue or register a transfer of any Securities or portions thereof (i) tendered for repurchase (and not withdrawn) pursuant to Article 4 , (ii) surrendered for conversion pursuant to Article 5 , or (iii) selected for redemption pursuant to Article 4 .

2.09                          GLOBAL SECURITIES.

(a)                                   Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary or a nominee thereof and delivered to the Depositary or a nominee thereof or custodian for the Global Securities therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture.

(b)                                  Notwithstanding any other provision in this Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary or a nominee thereof unless:

(i)                                      the Depositary (A) has notified the Company that it is unwilling or unable to continue as Depositary for such Global Security or (B) has ceased to be a clearing agency registered under the Exchange Act, and in each case, a successor depositary has not been appointed by the Company within 90 calendar days; or

(ii)                                   in accordance with clause (c)  below.

Any Global Securities exchanged pursuant to this Section 2.09(b)  shall be so exchanged in whole and not in part.

(c)                                   In addition, Physical Securities shall be issued in exchange for beneficial interests in a Global Security upon request by or on behalf of the Depositary in accordance with customary procedures following the request of a beneficial owner seeking to enforce its rights under the Securities or this Indenture upon the occurrence and during the continuance of an Event of Default.

(d)                                  Securities issued in exchange for a Global Security or any portion thereof pursuant to Section 2.09(b)  or Section 2.09(c)  shall be issued in definitive, fully registered form, without interest coupons, shall have an aggregate principal amount equal to that of such Global Securities or portion thereof to be so exchanged, shall be registered in such names and be in such authorized denominations as the Depositary shall designate and shall bear any legends required hereunder.  Any Global Securities to be exchanged shall be surrendered by the Depositary to the Trustee, as Security Registrar, provided that pending completion of the exchange of a Global Security, the Trustee acting as custodian for the Global Securities for the Depositary or its nominee with respect to such Global Securities, shall reduce the principal amount thereof, by an amount equal to the portion thereof to be so exchanged, by means of an appropriate adjustment made on the records of the Trustee.  Upon any such surrender or adjustment, the Trustee shall authenticate and make available for delivery the Securities issuable on such exchange to or upon the written order of the Depositary or an authorized representative thereof.

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(e)                                   In the event of the occurrence of any of the events specified in Section 2.09(b)  above or upon any request described in Section 2.09(c) , the Company will promptly make available to the Trustee a sufficient supply of Physical Securities in definitive, fully registered form, without interest coupons.

(f)                                     Neither any members of, or participants in, the Depositary (“ Agent Members ”) nor any other Persons on whose behalf Agent Members may act shall have any rights under this Indenture with respect to any Global Securities registered in the name of the Depositary or any nominee thereof, and the Depositary or such nominee, as the case may be, may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Securities for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or such nominee, as the case may be, or impair, as between the Depositary, its Agent Members and any other Person on whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a Holder of any Securities.

(g)                                  At such time as all interests in a Global Security have been redeemed, repurchased, converted, cancelled or exchanged for Physical Securities, such Global Security shall, upon receipt thereof, be canceled by the Trustee in accordance with standing procedures and instructions existing between the Depositary and the custodian for the Global Security.  At any time prior to such cancellation, if any interest in a Global Security is redeemed, repurchased, converted, cancelled or exchanged for Physical Securities, the principal amount of such Global Security shall, in accordance with the standing procedures and instructions existing between the Depositary and the custodian for the Global Security, be appropriately reduced, and an endorsement shall be made on such Global Security, by the Trustee or the custodian for the Global Security, at the direction of the Trustee, to reflect such reduction.

2.10                          TRANSFER RESTRICTIONS.

(a)                                   Until the date (the “ Resale Restriction Termination Date ”) that is the later of (1) one year after the Issue Date or such shorter period of time as permitted under Rule 144, and (2) such later date, if any, as may be required by applicable law:

(i)                                      any certificate evidencing a Security shall bear a legend in substantially the form identified as “Form of Restricted Security Legend” in the form of Security set forth in Exhibit A; and

(ii)                                   any certificate representing Common Stock issued upon conversion or redemption of a Security shall bear a legend substantially in the form identified as “Form of Restricted Security Legend for Common Stock Issued Upon Conversion or Redemption” in Exhibit B,

(each a “ Restricted Security Legend ”), in each case, unless (A) such Security or such Common Stock, as the case may be, has been sold pursuant to a registration statement that has been declared effective under the Securities Act (and which continues to be effective at the time of

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such transfer) or sold without transfer restrictions pursuant to Rule 144, (B) such Restricted Security Legend has been removed pursuant to Section 2.10(d) , or (C) otherwise agreed by the Company in writing with written notice thereof to the Trustee.

(b)                                  Every Security (and all securities issued in exchange therefor or in substitution thereof) and any Common Stock issued upon conversion or redemption of any Security that bears or is required under Section 2.10(a)  to bear a Restricted Security Legend (each a “ Restricted Security ”) shall be subject to the restrictions on transfer set forth in this Section 2.10 and in the Restricted Security Legend for such Restricted Security, unless such restrictions on transfer shall be waived by written consent of the Company following receipt of legal advice supporting the permissibility of the waiver of such transfer restrictions, and the Holder of any Restricted Securities, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer.

(c)                                   In connection with any transfer of a Physical Security that is a Restricted Security, the Holder must complete and deliver the form of assignment set forth on the certificate representing the Securities with the appropriate box checked to the Trustee.  If the proposed transfer is pursuant to clause (2)(D)  of the Restricted Security Legend (other than a transfer pursuant to Rule 144), the Holder must, prior to such transfer, furnish to the Trustee, such certifications, legal opinions or other information as the Company may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

(d)                                  The Company shall cause the Restricted Securities Legend to be removed from any Restricted Security on the date (the “ Delegending Date ”) that is earlier of (1) the date that is one year after the Issue Date for any Security Outstanding, (2) the transfer of such Restricted Security pursuant to an effective registration statement or (3) on any transfer of such Restricted Security without transfer restrictions under Rule 144, in each case as follows:

(i)                                      with respect to any Restricted Security that is a Physical Security, upon surrender of such Restricted Security by the Holder thereof to the Security Registrar for exchange, such Restricted Security shall be exchanged for a new Security, of like tenor and aggregate principal amount, which shall not bear the Restricted Security Legend; and

(ii)                                   with respect to any Restricted Security represented by a Global Security, the Company shall, on or promptly after the Delegending Date direct the Depositary to remove the Restricted Securities Legend from the Global Security; provided that if such a direction is not permitted under the applicable rules, regulations, policies and procedures of the Depositary as at the Delegending Date, the Company shall, upon surrender of such Restricted Security by the Holder thereof, reduce the principal amount of such Global Security by the principal amount of such Restricted Security and increase the principal amount of a Global Security without the Restricted Security Legend by an equal principal amount.  If a Global Security without the Restricted Security Legend is not then outstanding, the Company shall execute, and the Trustee shall authenticate and deliver to the Depositary, a Global Security without the Restricted Security Legend.

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2.11                          RESPONSIBILITIES AND OBLIGATIONS RELATING TO THE DEPOSITARY.

(a)                                   Neither the Company nor the Trustee shall have any responsibility or obligation to any Agent Members or any other Person with respect to the accuracy of the books or records, or the acts or omissions, of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any Agent Member or other Person (other than the Depositary) of any notice or the payment of any amount under or with respect to such Securities.

(b)                                  All notices and communications to be given to the Holders of Securities and all payments to be made to Holders of Securities under the Securities shall be given or made only to or upon the order of the registered Holders of Securities (which shall be the Depositary or its nominee in the case of a Global Security).

(c)                                   The rights of beneficial owners in any Global Securities shall be exercised only through the Depositary subject to the customary procedures of the Depositary.

(d)                                  The Company and the Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its Agent Members.

(e)                                   The Company and the Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Securities (including any transfers between or among Agent Members) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

2.12                          REPLACEMENT SECURITIES.

(a)                                   If a mutilated Security is surrendered to the Security Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder:

(i)                                      notifies the Company or the Trustee within a reasonable time after he has notice of such loss, destruction or wrongful taking and the Security Registrar does not register a transfer prior to receiving such notification;

(ii)                                   makes such request to the Company or the Trustee prior to the Security being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a “ Protected Purchaser ”); and

(iii)                                satisfies any other reasonable requirements of the Trustee and the Company.  Such Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee to protect the Company, the Trustee, the Paying Agent, the Conversion Agent and the Security Registrar from any loss or liability that any of them may suffer if a Security is replaced and subsequently presented or claimed for payment.

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(b)                                  The Company and the Trustee may charge the Holder for their expenses in replacing a Security.

(c)                                   In case any Security which (i) has matured or is about to mature, (ii) has been properly tendered for repurchase on a Fundamental Change Repurchase Date (and not withdrawn), (iii) is to be converted into shares of Common Stock or redeemed or repurchased for cash, shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, convert or authorize the conversion of, or redeem or repurchase or authorize redemption or repurchase of, the same (without surrender thereof except in the case of a mutilated Securities), as the case may be, if the applicant for such conversion or redemption or repurchase shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless for any loss, liability, cost or expense caused by or in connection with such substitution, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company, the Trustee and, if applicable, any Paying Agent or Conversion Agent evidence to their satisfaction of the destruction, loss or theft of such Securities and of the ownership thereof.

(d)                                  The provisions of this Section 2.12 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Securities.

2.13                          OUTSTANDING SECURITIES.

(a)                                   At any time, the Securities outstanding at that time are all Securities that have been authenticated by the Trustee and delivered under this Indenture as at that time, other than:

(i)                                      Securities cancelled by the Trustee or accepted by the Trustee for cancellation as at that time;

(ii)                                   Securities replaced pursuant to Section 2.12 as at that time, unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a Protected Purchaser;

(iii)                                Securities repurchased pursuant to Article 4 which are no longer outstanding as at that time pursuant to Section 4.03(d)  or Section 4.07(d) ;

(iv)                               Securities redeemed pursuant to Article 4 which are no longer outstanding as at that time pursuant to Section 4.12(c) ;

(v)                                  Securities converted pursuant to Article 5 which are no longer outstanding as at that time pursuant to Section 5.05(g) ; and

(vi)                               Securities that have matured at the Stated Maturity in respect of which the Paying Agent segregates and holds in trust, in accordance with this Indenture, as of the Stated Maturity Date, sufficient funds to pay all amounts due on the Stated Maturity Date with respect to such Securities maturing and the Paying Agent is not prohibited from paying such money to the Holders on such date pursuant to the terms of this Indenture.

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(b)                                  Subject to Section 2.13(c) , a Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security.

(c)                                   Notwithstanding anything else in this Section 2.13 , in determining whether the Holders of the requisite principal amount of Securities outstanding have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded.  Securities so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

(d)                                  The Company may from time to time repurchase outstanding Securities on the open market or in negotiated or other transactions without prior notice to the Holders.

2.14                          TEMPORARY SECURITIES.

(a)                                   Pending the preparation of Securities in certificated form, the Company may execute and the Trustee or an authenticating agent appointed by the Trustee shall, upon the written request of the Company, authenticate and deliver temporary Securities (printed or lithographed).  Temporary Securities shall be issuable in any authorized denomination, and substantially in the form of the Securities in certificated form, but with such omissions, insertions and variations as may be appropriate for temporary Security, all as may be determined by the Company.  Every such temporary Security shall be executed by the Company and authenticated by the Trustee or such authenticating agent upon the same conditions and in substantially the same manner, and with the same effect, as the Securities in certificated form.

(b)                                  Without unreasonable delay, the Company will execute and deliver to the Trustee or such authenticating agent Securities in certificated form and thereupon any or all temporary Securities may be surrendered in exchange therefor, at the office of the Security Registrar and the Trustee or such authenticating agent shall authenticate and make available for delivery in exchange for such temporary Securities an equal aggregate principal amount of Securities in certificated form.  Such exchange shall be made by the Company at its own expense and without any charge therefor.  Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits and subject to the same limitations under this Indenture as Securities in certificated form authenticated and delivered hereunder.

2.15                          CANCELLATION.

(a)                                   The Company may, at any time, deliver Securities to the Trustee for cancellation.  The Security Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment or

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cancellation and deliver canceled Securities to the Company pursuant to written direction by an Officer.

(b)                                  The Company may not issue new Securities to replace Securities it has redeemed, repurchased, converted, paid or delivered to the Trustee for cancellation.  The Trustee shall not authenticate Securities in place of canceled Securities other than pursuant to the terms of this Indenture.

2.16                          CUSIP AND ISIN NUMBERS.

The Company in issuing the Securities may use “CUSIP” and/or “ISIN” numbers (if then generally in use) and, if so, the Trustee shall use “CUSIP” and/or “ISIN” numbers in notices of redemption or otherwise as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers.

2.17                          ADDITIONAL SECURITIES.

The Company may, from time to time without the consent of the Holders of Outstanding Securities, increase the aggregate principal amount of the Securities by issuing additional Securities in the future pursuant to this Indenture (“ Additional Securities ”) having terms and conditions identical to those of the other Outstanding Securities, except that Additional Securities may have a different initial date from which interest begins to accrue thereon so that the Additional Securities are fungible with Outstanding Securities; provided that the Additional Securities may have the same CUSIP number as the Securities issued on the Issue Date, only if:

(a)                                   such issuance of Additional Securities is permissible as a “qualified reopening” for United States federal income tax purposes;

(b)                                  the resale of such Additional Securities by non-affiliates of the Company would not require registration under the Securities Act; and

(c)                                   at the time of, and after giving effect to, such transaction, no Default or Event of Default shall have occurred and be continuing.

2.18                          RANKING.

The indebtedness of the Company arising under or in connection with this Indenture and every outstanding Security issued under this Indenture from time to time constitutes and will constitute a senior secured obligation of the Company, ranking equally in right of payment to all of the Company’s existing and future unsecured obligations that are not subordinated by their terms and ranking senior in right of payment to any existing or future indebtedness of the Company that is expressly subordinated in right of payment to the Securities.

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III.  PARTICULAR COVENANTS OF THE COMPANY

3.01                          PAYMENT OF PRINCIPAL AND INTEREST.

The Company covenants and agrees that it shall duly and punctually pay or cause to be paid the principal of, and interest on, each of the Securities at the places, at the respective times and in the manner provided herein and in the Securities.

3.02                          MAINTENANCE OF OFFICE OR AGENCY.

The Company will maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Securities may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Company fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided , however , that no such designation or rescission will in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York for such purposes.  The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Company hereby designates The Bank of New York, located at 101 Barclay Street, 8W, New York, New York 10286, Attn: Corporate Trust Administration, as one such office or agency of the Company in accordance with Section 2.06 hereof.

3.03                          RESALE OF CERTAIN SECURITIES.

Except as in accordance with Section 2.17 , the Company shall not, and shall not permit any of its “affiliates” (as defined under Rule 144 or any successor provision thereto) to, resell any Securities that have been reacquired by any of them.  The Trustee shall have no responsibility in respect of the Company’s performance of its agreement in the preceding sentence.

3.04                          NOTICE OF EVENT OF DEFAULT.

The Company shall deliver to the Trustee, as soon as possible and in any event within 30 days after the Company becomes aware of the occurrence of any Event of Default or an event which, with notice or the lapse of time or both, would constitute an Event of Default, an Officers’ Certificate setting forth the details of such Event of Default or Default, its status and the action which the Company proposes to take with respect thereto.  Any notice required to be

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given under this Section 3.04 shall be delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.

3.05                          LATE FILING ADDITIONAL INTEREST.

(a)                                   If, at any time during the six-month period beginning on, and including, December 17, 2008, the Company fails to timely file any document or report that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act), as applicable (other than reports on Form 8-K), the Company shall pay additional interest (the “ Late Filing Additional Interest ”) in accordance with this Section 3.05 .

(b)                                  Late Filing Additional interest shall accrue on all Restricted Securities then Outstanding at an annual rate of 0.50% per annum of the principal amount of such Restricted Securities during such six-month period for which the Company’s failure to file occurs until June 17, 2009.

(c)                                   Late Filing Additional Interest shall be payable in arrears on each of up to two Interest Payment Dates following the late filing in the same manner as regular interest on the Securities.

(d)                                  No Late Filing Additional Interest shall accrue after the end of such six-month period, regardless of whether any such failure has occurred or is continuing.  No Late Filing Additional Interest or other amounts shall be payable in respect of any Common Stock delivered upon conversion or redemption of the Securities.

(e)                                   If the Company becomes obligated to pay any such Late Filing Additional Interest, it shall provide an Officers’ Certificate to the Trustee setting forth the amount thereof, and referencing Section 3.05(e)  of the Indenture.

3.06                          CORPORATE EXISTENCE.

Except as otherwise permitted in this Indenture or the Security Documents, the Company shall, and shall cause each of its Pledged Subsidiaries to, do or cause to be done all things necessary to preserve and keep in full force and effect its respective corporate existence in accordance with its organizational documents (as the same may be amended from time to time).

3.07                          OWNERSHIP OF SUBSIDIARIES.

The Company shall maintain direct ownership of all of, and shall not transfer or dispose of any of, and shall not permit to be issued to any Person other than the Company any of, the Capital Stock in the Pledged Subsidiaries; provided that , in the case of Shenzhen, PAI shall maintain direct ownership of all of, and shall not transfer or dispose of any of, and shall not permit to be issued to any Person other than PAI any of, the Capital Stock in Shenzhen; and provided further that , in the case of PowerOne UK, the Company shall maintain direct ownership of no less than 60.5% of, and shall not transfer or dispose of any of, and shall not permit to be issued (if after such issuance the Company shall have less than 60.5% of the Capital

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Stock in PowerOne UK) to any Person other than the Company any of, the Capital Stock in PowerOne UK.

3.08                          RESTRICTED PAYMENTS.

The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any unsecured Subordinated Indebtedness (or any extension, refinancing or renewal thereof), whether by way of payment in respect of principal of (or premium, if any) or interest on such Indebtedness if at the time such payment is due or otherwise made or, after giving effect to such payment, an Event of Default has occurred and is continuing.

3.09                          REDEMPTION AND DIVIDENDS.

The Company shall not directly or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on the Company’s Capital Stock without the prior written consent of the Holders of the majority of the aggregate principal amount of the Securities outstanding, except for repurchases of securities pursuant to, and in accordance with, the Company’s equity compensation plans.

3.10                          LIENS.

The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, allow or suffer to exist any Lien upon or in any property or assets (including accounts and contract rights) owned by the Company or any of its Subsidiaries other than Permitted Liens.

3.11                            INDEBTEDNESS

The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to any Indebtedness unless, in each case, (x)  no Default or Event of Default shall have occurred and be continuing at the time of or as a consequence of such incurrence of Indebtedness, and (y) such Indebtedness is Permitted Indebtedness.

3.12                          FINANCIAL COVENANTS

(a)                                   Until the first anniversary of the Issue Date, the Company’s Total Debt as of the end of any fiscal quarter shall not exceed $110 million, plus the principal amount of any additional Securities issued as a result of the Initial Purchaser’s exercise of its option to acquire up to $5 million of additional Securities pursuant to the Purchase Agreement, but in no event greater than $115 million; thereafter, as of the end of any fiscal quarter the Company’s Total Debt shall not exceed the greater of (i) $125 million and (ii) the product of (x) three and (y) LTM EBITDA, in each case determined on a pro forma basis, including a pro forma sale of assets, incurrence of indebtedness and/or application of the net proceeds therefrom, in each case as of

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such date of determination, as if such transaction had occurred at the beginning of the relevant twelve-month period;

(b)                                  Until the first anniversary of the Issue Date, cash and Cash Equivalents shall not be less than $20 million at the end of each fiscal quarter; thereafter cash and Cash Equivalents shall not be less than $25 million at the end of each fiscal quarter; and

(c)                                   Until the first anniversary of the Issue Date, the Company’s Tangible Net Worth at the end of each fiscal quarter shall not be less than $90 million; thereafter, the Company’s Tangible Net Worth shall not be less than $100 million at the end of each fiscal quarter.

3.13                          PRESERVATION OF REPURCHASE RIGHTS.

The Company will not enter into any contract or financing arrangement that would restrict its ability to repurchase the Securities upon exercise of the Holders’ repurchase rights pursuant to Article 4 .

3.14                          SHARE CAP PROPOSAL

No later than 90 days after the Issue Date, the Company will submit for approval by its stockholders a proposal (the “ Share Cap Proposal ”) that, if approved, will permit the Company to issue Common Stock at a conversion price that is lower than the Cap Price so that the conversion of the Securities pursuant to this Indenture will not be limited by the rules and regulations of The Nasdaq Global Market or any other securities exchange on which the Common Stock may be traded or listed that may otherwise limit such issuance without such shareholder approval.  To the extent that the Share Cap Proposal is not approved by the Company’s stockholders, the Company will resubmit the Share Cap Proposal for approval by its stockholders at the next regular annual meeting of stockholders (which shall be held within no more than 230 days after the initial vote) and, if not then approved, within successive 180 day intervals thereafter over the term of the Securities until the Share Cap Proposal is either approved or the Securities are no longer outstanding.

3.15                          FURTHER ASSURANCES.

Upon request of the Trustee, the Company shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.

3.16                          ANNUAL COMPLIANCE CERTIFICATE.

The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year, an Officers’ Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture in all material respects, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge, in his or her capacity as such, the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture in all material respects and is not in Default in the

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performance or observance of any of the terms, provisions and conditions of this Indenture (and, if a Default or an Event of Default shall have occurred, describing all such Defaults or Events of Default) of which he or she may have knowledge, in his or her capacity as such, and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which, payments on account of the principal of or interest, if any, on the Securities is prohibited or if such event has occurred, a description of the event.

IV.  REPURCHASE AND REDEMPTION OF SECURITIES

4.01                          FUNDAMENTAL CHANGE REPURCHASE RIGHT NOTICE.

(a)                                   On or before the 10th Business Day following the occurrence of a Fundamental Change, the Company shall provide to all Holders and the Trustee and Paying Agent a notice (the “ Fundamental Change Repurchase Right Notice ”) of the occurrence of such Fundamental Change and of the repurchase right, if any, at the option of the Holders arising as a result thereof.

(b)                                  A Fundamental Change Repurchase Right Notice shall specify (if applicable):

(i)                                      the events causing a Fundamental Change;

(ii)                                   the date of the Fundamental Change;

(iii)                                the Fundamental Change Repurchase Date and the last date on which a Holder may exercise the repurchase right ;

(iv)                               the Fundamental Change Repurchase Price;

(v)                                  the name and address of the Paying Agent and the Conversion Agent;

(vi)                               the Conversion Rate and any adjustments to the Conversion Rate;

(vii)                            that the Securities with respect to which a Fundamental Change Repurchase Notice has been delivered by a Holder may be converted only if the Holder withdraws the Fundamental Change Repurchase Notice in accordance with the terms of this Indenture;

(viii)                         that the Holder must exercise the repurchase right on or prior to the Fundamental Change Expiration Time;

(ix)                                 that the Holder shall have the right to withdraw any Securities surrendered for repurchase prior to the Fundamental Change Expiration Time; and