Exhibit 4.2

 

EXECUTION VERSION


 



 

PHH CORPORATION

 

as Issuer

 

AND

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

 

as Trustee

 




 

First Supplemental Indenture

 

Dated as of January 17, 2012

 

Supplemental to Indenture

 

Dated as of January 17, 2012

 




 

6.00% Convertible Senior Notes due 2017


 



 











 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE 1
    
	
DEFINITIONS AND OTHER   PROVISIONS OF GENERAL APPLICATION
    
	
 
    	
 
    
	
Section 1.01. Scope of Supplemental   Indenture
    	
1
    
	
Section 1.02. Definitions
    	
2
    
	
 
    	
 
    
	
ARTICLE 2
    
	
THE NOTES
    
	
 
    	
 
    
	
Section 2.01. Designation, Amount   and Issuance of Notes
    	
10
    
	
Section 2.02. Form of the Notes
    	
10
    
	
Section 2.03. Date and Denomination   of Notes; Payment at the Stated Maturity Date; Payment of Interest
    	
11
    
	
Section 2.04. Security Registrar,   Paying Agent and Conversion Agent
    	
12
    
	
Section 2.05. Registration of   Transfer and Exchange
    	
13
    
	
Section 2.06. Global Securities
    	
13
    
	
Section 2.07. Repurchase and   Cancellation
    	
14
    
	
Section 2.08. Additional Notes
    	
14
    
	
 
    	
 
    
	
ARTICLE 3
    
	
PARTICULAR COVENANTS OF THE   COMPANY
    
	
 
    	
 
    
	
Section 3.01. Covenants in Original   Indenture
    	
14
    
	
Section 3.02. Book-Entry System
    	
14
    
	
Section 3.03. Compliance Certificate
    	
14
    
	
 
    	
 
    
	
ARTICLE 4
    
	
REPURCHASE OF NOTES
    
	
 
    	
 
    
	
Section 4.01. Right To Require   Repurchase Upon a Fundamental Change
    	
15
    
	
 
    	
 
    
	
ARTICLE 5
    
	
CONVERSION
    
	
 
    	
 
    
	
Section 5.01. Conversion Privilege   and Conversion Rate
    	
19
    
	
Section 5.02. Conversion Rate   Adjustment Upon Certain Make-whole Fundamental Changes
    	
21
    
	
Section 5.03. Exercise of Conversion   Privilege
    	
23
    
	
Section 5.04. Settlement of   Conversion Obligation
    	
24
    
	
Section 5.05. Fractions of Shares
    	
26
    
	
Section 5.06. Adjustment of   Conversion Rate
    	
26
    
	
Section 5.07. Notice of Adjustments   of Conversion Rate
    	
35
    


 

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Section 5.08. Company To Reserve   Common Stock
    	
35
    
	
Section 5.09. Taxes on Conversions
    	
35
    
	
Section 5.10. Certain Covenants
    	
35
    
	
Section 5.11. Cancellation of   Converted Notes
    	
35
    
	
Section 5.12. Provision in Case of   Effect of Reclassification, Consolidation, Merger or Sale
    	
36
    
	
Section 5.13. Responsibility of   Trustee for Conversion Provisions
    	
37
    
	
Section 5.14. Notice to Holders   Prior to Certain Actions
    	
37
    
	
Section 5.15. Stockholder Rights   Plan
    	
38
    
	
Section 5.16. Company Determination   Final
    	
39
    
	
Section 5.17. Exchange in Lieu of   Conversion
    	
39
    
	
 
    	
 
    
	
ARTICLE 6
    
	
EVENTS OF DEFAULT; REMEDIES
    
	
 
    	
 
    
	
Section 6.01. Original Indenture
    	
40
    
	
Section 6.02. Events of Default.
    	
40
    
	
Section 6.03. Acceleration of   Maturity; Rescission and Annulment
    	
41
    
	
Section 6.04. Collection of   Indebtedness and Suits for Enforcement by Trustee
    	
43
    
	
Section 6.05. Trustee May File   Proofs of Claim
    	
43
    
	
Section 6.06. Application of Money   Collected
    	
43
    
	
Section 6.07. Limitation on Suits
    	
44
    
	
Section 6.08. Unconditional Right of   Holders To Receive Payment
    	
44
    
	
Section 6.09. Restoration of Rights   and Remedies
    	
45
    
	
Section 6.10. Rights and Remedies   Cumulative
    	
45
    
	
Section 6.11. Delay or Omission Not   Waiver
    	
45
    
	
Section 6.12. Control by Holders
    	
45
    
	
Section 6.13. Waiver of Past   Defaults
    	
45
    
	
Section 6.14. Undertaking for Costs
    	
46
    
	
Section 6.15. Waiver of Stay or   Extension Laws
    	
46
    
	
Section 6.16. Violations of Certain   Covenants
    	
46
    
	
Section 6.17. Company’s Failure to   Convert
    	
46
    
	
 
    	
 
    
	
ARTICLE 7
    
	
CONSOLIDATION, MERGER,   CONVEYANCE, TRANSFER OR LEASE
    
	
 
    	
 
    
	
Section 7.01. Original Indenture
    	
47
    
	
Section 7.02. Company   May Consolidate, Etc., Only on Certain Terms
    	
47
    
	
 
    	
 
    
	
ARTICLE 8
    REPORTS BY COMPANY
    
	
Section 8.01. Reports by Company.
    	
48
    


 

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ARTICLE 9
    
	
SATISFACTION AND DISCHARGE
    
	
 
    	
 
    
	
Section 9.01. Original Indenture
    	
49
    
	
Section 9.02. Discharge of Indenture
    	
49
    
	
Section 9.03. Deposited Monies and   Shares To Be Held in Trust by Trustee
    	
50
    
	
Section 9.04. Paying Agent To Repay   Monies and Shares Held
    	
50
    
	
Section 9.05. Reinstatement
    	
50
    
	
 
    	
 
    
	
ARTICLE 10
    
	
SUPPLEMENTAL INDENTURES
    
	
 
    	
 
    
	
Section 10.01. Supplemental   Indentures Without Consent of Holders
    	
50
    
	
Section 10.02. Supplemental   Indentures with Consent of Holders
    	
51
    
	
Section 10.03. Notice to Holders of Supplemental Indentures
    	
52
    
	
 
    	
 
    
	
ARTICLE 11
    
	
MISCELLANEOUS
    
	
 
    	
 
    
	
Section 11.01. Provisions of Original   Indenture Not Applicable
    	
52
    
	
Section 11.02. Successors
    	
52
    
	
Section 11.03. Multiple Originals
    	
52
    
	
Section 11.04. Calculations
    	
53
    
	
Section 11.05. Benefits of   Supplemental Indenture
    	
53
    
	
Section 11.06. Governing Law
    	
53
    
	
Section 11.07. Waiver of Jury Trial
    	
53
    
	
Section 11.08. Force Majeure
    	
53
    
	
Schedule   A
    	
Make-Whole   Table
    	
 
    
	
 
    	
 
    	
 
    
	
EXHIBITS
    
	
 
    	
 
    	
 
    
	
Exhibit A—
    	
Form of   Security
    	
 
    


 

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FIRST SUPPLEMENTAL INDENTURE, dated as of January 17, 2012, between PHH Corporation, a corporation duly organized and existing under the laws of the State of Maryland, as issuer (the “Company”), having its principal office at 3000 Leadenhall Road, Mt. Laurel, New Jersey 08054 and The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee (the “Trustee”) to the Indenture dated as of January 17, 2012, between the Company and the Trustee (as amended or supplemented from time to time in accordance with the terms thereof, the “Original Indenture”).

 

RECITALS OF THE COMPANY

 

WHEREAS, the Company executed and delivered the Original Indenture to the Trustee to provide for, among other things, the issuance, from time to time, of the Company’s unsecured Securities, in an unlimited aggregate principal amount, in one or more series to be established by the Company under, and authenticated and delivered as provided in, the Original Indenture;

 

WHEREAS, Section 901(8) of the Original Indenture provides for the Company and the Trustee to enter into an indenture supplemental to the Original Indenture to establish the form and term of Securities of any series as contemplated by Sections 201 and 301 of the Original Indenture;

 

WHEREAS, the Company has duly authorized the creation of an issuance of 6.00% Convertible Senior Notes due 2017 (each, a “Note” and, collectively, the “Notes”) of the tenor and amount hereinafter set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Supplemental Indenture; and

 

WHEREAS, all things necessary to make the Notes, 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 Supplemental Indenture a valid and legally binding agreement of the Company, in accordance with the terms of the Notes and this Supplemental Indenture, have been done;

 

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH, for and in consideration of the premises and the purchases of the Notes 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 Notes, as follows:

 

ARTICLE 1
  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 1.01.  Scope of Supplemental Indenture.  The changes, modification and supplements to the Original Indenture effected by this Supplemental Indenture shall be applicable only with respect to, and shall only govern the terms of, the 6.00% Convertible Senior Notes due 2017, and shall not apply to any other Securities that may be issued under the Original Indenture unless a supplemental indenture with respect to such other Securities specifically incorporates such changes, modifications and supplements.  The provisions of this Supplemental Indenture shall supplement

 












 

and, to the extent they are inconsistent, replace any corresponding provisions in the Original Indenture.

 

Section 1.02.  Definitions.  For all purposes of the Indenture, except as otherwise expressly provided or unless the context otherwise requires:

 

(i)            the terms defined in this Article 1 have the meanings assigned to them in this Article and include the plural as well as the singular;

 

(ii)           all words, terms and phrases used in this Supplemental Indenture and defined in the Original Indenture (but not otherwise defined herein) shall have the same meanings as in the Original Indenture;

 

(iii)          all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;

 

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

 

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

 

“Additional Notes” has the meaning specified in Section 2.08.

 

“Additional Shares” has the meaning specified in Section 5.02(a).

 

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

 

“Bid Solicitation Agent” means initially the Company or any agent the Company may appoint in the future, including the Trustee, to determine a Trading Price for the Notes as may be required pursuant to this Supplemental Indenture.

 

“Business Day” means any day, other than a Saturday or a Sunday, that is neither a legal holiday 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.

 

“close of business” means 5:00 p.m., New York City time.

 

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“Common Stock” means the shares of common stock, par value $0.01 per share, of the Company as they exist on the date of the Indenture, subject 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 the Indenture, and thereafter “Company” shall mean such successor Person.

 

“Continuing Directors” means (i) individuals who on the date of original issuance of the Notes were members of the Board of Directors and (ii) any new directors whose election to the Board of Directors or whose 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 date of original issuance of the Notes or whose election or nomination for election was previously so approved.  Solely for purposes of this definition, the phrase “or any duly authorized committee of that board” of the definition of Board of Directors in the Original Indenture shall be disregarded.

 

“Conversion Agent” has the meaning specified in Section 2.04.

 

“Conversion Date” has the meaning specified in Section 5.03(a).

 

“Conversion Notice” has the meaning specified in Section 5.03(a).

 

“Conversion Obligation” has the meaning specified in Section 5.01(a).

 

“Conversion Price” means, in respect of each Note, as of any date $1,000 divided by the Conversion Rate as of such date.

 

“Conversion Rate” means, initially 78.2014 shares of Common Stock per $1,000 principal amount of Notes, subject to adjustment as set forth herein.

 

“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, at the date of this Supplemental Indenture, located at The Bank of New York Mellon Trust Company, N.A., 2 North LaSalle Street, Chicago, Illinois 60602, Attn: Corporate Trust Administration 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.

 

“Daily Conversion Value” means for each of the 60 consecutive VWAP Trading Days during the Observation Period, one-sixtieth (1/60th) of the product of (a) the applicable Conversion Rate and (b) the Daily VWAP of the Common Stock (or the Reference Property 

 

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pursuant to Section 5.12) on such VWAP Trading Day. Any determination of the Daily Conversion Value by the Company shall be conclusive absent manifest error.

 

“Daily Settlement Amount” has the meaning specified in Section 5.04(a).

 

“Daily Share Amount” has the meaning specified in Section 5.04(a)(ii).

 

“Daily VWAP” of the Common Stock means, for each of the 60 consecutive VWAP Trading Days during the Observation Period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page PHH.N <equity> AQR (or any equivalent successor page) in respect of the period from the scheduled open of trading on the principal trading market for the Common Stock to the scheduled close of trading on such market on such VWAP Trading Day, or if such volume-weighted average price is unavailable, the market value of one share of Common Stock on such VWAP Trading Day using a volume-weighted method as determined by a nationally recognized independent investment banking firm retained for this purpose by the Company.  Daily VWAP will be determined without regard to after hours trading or any other trading outside of the regular trading session trading hours.

 

“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.

 

“Depositary” has the meaning set forth in the Original Indenture, which shall initially be The Depository Trust Company until a successor Depositary shall have become such pursuant to the applicable provisions of the Indenture, and thereafter “Depositary” shall mean such successor Depositary.

 

“Distributed Property” has the meaning specified in Section 5.06(c).

 

“Effective Date” has the meaning specified in Section 5.02(b).

 

“Event of Default” has the meaning specified in Section 6.02.

 

“Ex-Date” shall mean the first date on which the shares of the Common Stock trade on the relevant exchange or in the relevant market, regular way, without the right to receive the issuance or distribution in question, from the Company or, if applicable, from the seller of Common Stock on such exchange or market (in the form of due bids or otherwise) as determined by such exchange or market.

 

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

 

“Extension Fee” has the meaning specified in Section 6.03.

 

“Foreign Jurisdiction Transaction” has the meaning specified in Section 7.02(a).

 

“Fundamental Change” will be deemed to have occurred at the time after the Notes are originally issued if any of the following occurs:

 

4











 

(1)           any Person acquires beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of shares of the Company’s Capital Stock entitling the Person to exercise 50% or more of the total voting power of all shares of the Company’s Capital Stock entitled to vote generally in elections of directors, other than an acquisition by the Company or any of the Company’s Subsidiaries; provided that a Fundamental Change shall not occur as a result of this clause (1) if, in such purchase, merger, acquisition or other transaction, all or substantially all of the Common Stock is exchanged for or converted into cash, securities or other property, in which case clause (2) below shall apply (in addition to, if applicable, clauses (3), (4) or (5) below); or

 

(2)           the Company (i) 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 the Company’s assets to another Person (excluding a pledge of securities issued by any of the Company’s Subsidiaries, but not excluding any transfer or other disposition resulting from the foreclosure or other exercise of creditors’ remedies pursuant to such pledge) or (ii) engages in any recapitalization, reclassification or other acquisition transaction or series of transactions in which all or substantially all of the Common Stock is exchanged for or converted into cash, securities or other property, in each case other than any merger or consolidation:

 

(a)           pursuant to which the holders of 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 (x) the continuing or surviving corporation immediately after the transaction or (y) the corporation that directly or indirectly owns 100% of the Capital Stock of such continuing or surviving corporation; or

 

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

 

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

 

(3)           at any time the Company’s Continuing Directors do not constitute a majority of the Board of Directors (or, if applicable, a successor Person to the Company); or

 

(4)           the Company is liquidated or dissolved or holders of the Common Stock approve any plan or proposal for the Company’s liquidation or dissolution; or

 

(5)           if shares of Common Stock, or shares of any other Capital Stock which constitute the Reference Property as set forth in Section 5.12 hereof, are not listed for trading on any United States national securities exchange.

 

For purposes of this definition, whether a “person” is a “beneficial owner” shall be determined in accordance with Rule 13d-3 under the Exchange Act and “person” includes any 

 

5











 

syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act. In addition, solely for purposes of this definition, the phrase “or any duly authorized committee of that board” of the definition of Board of Directors shall be disregarded.

 

“Fundamental Change Expiration Time” has the meaning specified in Section 4.01(a)(i).

 

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

 

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

 

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

 

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

 

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants 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.

 

“Indenture” means the Original Indenture as supplemented by this Supplemental Indenture.

 

“Interest” means, when used with reference to the Notes, any interest payable under the terms of the Notes and the Extension Fee, if any.

 

“Interest Payment Date” means each June 15 and December 15 of each year.

 

“Issue Date” means the date the Notes are originally issued as set forth on the face of the Note under this Supplemental Indenture.

 

“Last Reported Sale Price” of the Common Stock (or any other security for which a Last Reported Sale Price must be determined) on any date means the closing sale price per share (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 that date as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock (or such other security) is traded.  If the Common Stock (or such other security) is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the “Last Reported Sale Price” shall be the average of the last quoted bid and ask prices for the Common Stock (or such other security) in the over-the-counter market on the relevant date, as reported by OTC Markets Group Inc. or similar organization. If the Common Stock (or such other security) is not so quoted, the “Last Reported Sale Price” shall be 

 

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the average of the mid-point of the last bid and ask prices for the Common Stock (or such other security) on the relevant date from each of at least three nationally recognized independent investment banking firms, which may include one or more of the Underwriters, selected by the Company for this purpose. Any such determination shall be conclusive absent manifest error.

 

“Make-Whole Fundamental Change” means any transaction or event that constitutes a Fundamental Change pursuant to clauses (1), (2) or (5) under the definition of Fundamental Change (but without giving effect to subclause (a) under clause (2) of that definition).

 

“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 stock exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to the Common Stock, 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.

 

“Measurement Period” has the meaning specified in Section 5.01(a)(i).

 

“Note” or “Notes” has the meaning specified in the first paragraph of the Recitals of the Company.

 

“Observation Period” with respect to any Note means:

 

(i)            with respect to any Conversion Date occurring on or after the 65th Scheduled Trading Day prior to the Stated Maturity Date, the 60 consecutive VWAP Trading Day period beginning on, and including, the 62nd Scheduled Trading Day prior to the Stated Maturity Date (or if such day is not a VWAP Trading Day, the next succeeding VWAP Trading Day); and

 

(ii)           in all other instances, the 60 consecutive VWAP Trading Day period beginning on and including the third VWAP Trading Day after the Conversion Date.

 

“open of business” means 9:00 a.m., New York City time.

 

“Original Indenture” has the meaning specified in the first paragraph of this Supplemental Indenture.

 

“Outstanding,” has the meaning specified in the Original Indenture except that, with respect to the Notes, (i) any Notes converted pursuant to Article 5 shall cease to be Outstanding, and (ii) if the Paying Agent segregates and holds in trust, in accordance with the Indenture, on a Fundamental Change Repurchase Date or Stated Maturity Date money sufficient to pay all principal and Interest payable on that date with respect to the Notes (or portions thereof) to be repurchased or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Holders on that date pursuant to the terms of the Indenture, then on and after that date such Notes (or portions thereof) shall cease to be Outstanding.

 

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“Paying Agent” has the meaning specified in the Original Indenture, which, with respect to the Notes, shall initially be the Trustee.

 

“Place of Payment” has the meaning specified in the Original Indenture, which, with respect to the Notes, shall be Chicago, Illinois.

 

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

 

“Principal Portion” has the meaning specified in Section 5.04(a)(i).

 

“record date” has the meaning specified in Section 5.06(e).

 

“Record Date” means, with respect to the payment of Interest, the June 1 (whether or not a Business Day) immediately preceding an Interest Payment Date on June 15 and December 1 (whether or not a Business Day) immediately preceding an Interest Payment Date on December 15.

 

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

 

“Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading or, if the Common Stock is not listed or admitted for trading on any exchange or market, a Business Day.

 

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

 

“Securitization Indebtedness” means any indebtedness of any of the Company’s structured bankruptcy-remote subsidiaries which does not permit or provide for recourse to the Company or any of its Subsidiaries (other than the structured bankruptcy-remote subsidiary) or any property or assets of the Company or any of its Subsidiaries (other than property or assets of such structured bankruptcy-remote subsidiary); provided that if at any time, whether by operation of law, the terms of such indebtedness, pursuant to a legal judgment, decree or order, or otherwise, any such indebtedness is, or becomes, recourse to the Company or any of its Subsidiaries (other than the structured bankruptcy-remote subsidiary) then such indebtedness shall not be Securitization Indebtedness.

 

“Security Registrar” has the meaning specified in the Original Indenture, which, with respect to the Notes, shall initially be the Trustee.

 

“Spin-Off” has the meaning specified in Section 5.06(c).

 

“Stated Maturity Date” when used with respect to any Note and the payment of the principal amount thereof, means June 15, 2017.

 

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“Stock Price” means the price per share of Common Stock at the time of a Make-Whole Fundamental Change, which shall be equal to (i) if holders of Common Stock receive only cash consideration for their shares of Common Stock in connection with a Make-Whole Fundamental Change, the cash amount paid per share and (ii) otherwise, the average of the Last Reported Sale Prices of the Common Stock over the 10 Trading Day period ending on the Trading Day preceding the Effective Date.

 

“Stock Price Condition” has the meaning specified in Section 5.01(a)(ii).

 

“Subsidiary” means a corporation 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 7.02(a).

 

“Supplemental 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.

 

“Trading Day” means a day during which (i) trading in the Common Stock generally occurs and (ii) there is no Market Disruption Event.

 

“Trading Price” of the Notes on any date of determination means the average of the secondary market bid quotations obtained by the Bid Solicitation Agent per $1,000 in principal amount of Notes for $2.0 million in principal amount of the Notes at approximately 3:30 p.m., New York City time, on such determination date from three independent nationally recognized securities dealers the Company selects, which may include one or more of the Underwriters; provided that if three such bids cannot reasonably be provided to the Bid Solicitation Agent, but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid is obtained, that one bid shall be used. If at least one bid for $2.0 in million principal amount of the Notes cannot reasonably be obtained, then the Trading Price per $1,000 in principal amount of the Notes will be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate. Any such determination shall be conclusive absent manifest error.

 

“Trading Price Condition” has the meaning specified in Section 5.01(a)(i).

 

“Trigger Event” has the meaning specified in Section 5.06(c).

 

“Underwriters” means J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., RBC Capital Markets, LLC, and RBS Securities Inc. or any successor.

 

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“U.S.” or “United States” means the United States of America.

 

“Valuation Period” has the meaning specified in Section 5.06(c).

 

“VWAP Market Disruption Event” means (i) a failure by the principal U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted to trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m. (local time on such exchange or market) on any Scheduled Trading Day for the Common Stock for an aggregate one half-hour period or longer of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to the Common Stock.

 

“VWAP Trading Day” means a day during which (i) trading in the Common Stock generally occurs on the principal U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading and (ii) there is no VWAP Market Disruption Event.  If the Common Stock is not so listed or traded, then “VWAP Trading Day” shall mean a Business Day.

 

“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.

 

ARTICLE 2
  THE NOTES

 

Section 2.01.  Designation, Amount and Issuance of Notes.  The Notes shall be designated as “6.00% Convertible Senior Notes due 2017.”  The Notes will be initially limited to an aggregate principal amount of $250,000,000, subject to Section 2.08 of this Supplemental Indenture and except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305, 306 and 906 of the Original Indenture and Section 4.01 and Section 5.03 of this Supplemental Indenture.  Upon the execution of this Supplemental Indenture, or from time to time thereafter, Notes may be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver Notes upon a written order of the Company, such order signed by an Officer of the Company, without any further action by the Company hereunder.

 

Section 2.02.  Form of the Notes.  The Notes and the Trustee’s certificate of authentication to be borne by such Notes shall be substantially in the form set forth in Exhibit A hereto.  The terms and provisions contained in the form of Notes attached as Exhibit A hereto shall constitute, and are hereby expressly made, a part of this Supplemental Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby.

 

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Any of the Notes 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 the Indenture, or as may be required by the Custodian for the Global Securities or the Depositary 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 Notes may be listed, or to conform to usage, or to indicate any special limitations or restrictions to which any particular Notes are subject.

 

So long as the Notes are eligible for book-entry settlement with the Depositary, or unless otherwise required by law, subject to Section 2.06 of this Supplemental Indenture and Section 311 of the Original Indenture, all of the Notes 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 the Indenture and the applicable procedures of the Depositary.  Except as provided in Section 2.06 of this Supplemental Indenture or Section 311 of the Original Indenture (as amended pursuant to the immediately following paragraph), 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.

 

For purposes of the Notes, the fourth paragraph of Section 311 of the Original Indenture shall be deemed to be deleted in its entirety.

 

Any Global Security shall represent such of the Outstanding Notes as shall be specified therein and shall provide that it shall represent the aggregate amount of Outstanding Notes from time to time endorsed thereon and that the aggregate amount of outstanding Notes 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 Notes 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 Notes in accordance with the Indenture.

 

Section 2.03.  Date and Denomination of Notes; Payment at the Stated Maturity Date; Payment of Interest.  The Notes shall be issuable in registered form without coupons in denominations of $1,000 principal amount and integral multiples thereof.  Each Note shall be dated the date of its authentication and shall bear Interest from the date specified on the face of the form of Notes attached as Exhibit A hereto.  Interest on the Notes shall be computed on the basis of a 360-day year comprised of twelve 30-day months.

 

On the Stated Maturity Date, each Holder shall be entitled to receive the principal amount of the Notes held. With respect to Global Securities, principal and Interest will be paid to the Depositary or its nominee in immediately available funds.  With respect to any Physical Securities, principal and Interest will be payable at the Company’s office or agency maintained

 

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for that purpose in the Place of Payment, which initially will be the Corporate Trust Office of the Trustee.

 

The Person in whose name any Note is registered on the Security Register at the close of business on any Record Date with respect to any Interest Payment Date shall be entitled to receive the Interest payable on such Interest Payment Date.

 

Except as provided above, the Company shall pay Interest (i) on any Global Securities by wire transfer of immediately available funds to the account of the Depositary or its nominee, (ii) on any Notes in certificated form having a principal amount of $5,000,000 or less, by check mailed to the address of the Person entitled thereto as it appears in the Security Register, provided that on the Stated Maturity Date, Interest will be payable at the office of the Company maintained by the Company for such purposes in the Place of Payment, which shall initially be the Corporate Trust Office and (iii) on any Notes in certificated form having a principal amount of more than $5,000,000, either by check mailed to the address of the Person entitled thereto as it appears in the Security Register or, upon application by a Holder to the Security Registrar not later than the relevant Record Date, by wire transfer in immediately available funds to that Holder’s account within the United States, which application shall remain in effect until the Holder notifies, in writing, the Security Registrar to the contrary; provided that on the Stated Maturity Date, Interest will be payable at the office of the Company maintained by the Company for such purposes in the Place of Payment, which shall initially be the Corporate Trust Office of the Trustee.

 

Section 2.04.  Security Registrar, Paying Agent and Conversion Agent.  The Company shall maintain an office or agency where Notes may be presented for conversion (the “Conversion Agent”).  The Corporate Trust Office shall be considered as one such office or agency of the Company for such purpose, and shall also be considered as one office or agency for purposes of Section 1002 of the Original Indenture where Notes may be presented or surrendered for payment, where Notes may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Notes and the Indenture may be served.  The Company initially appoints the Trustee as (i) the Security Registrar with respect to the Notes for purposes of Section 305 of the Original Indenture, (ii) the Paying Agent with respect to the Notes, (iii) the Custodian with respect to the Global Securities, and (iv) the Conversion Agent.

 

The Company shall enter into an appropriate agency agreement with any Security Registrar, Paying Agent or Conversion Agent not a party to this Supplemental Indenture.  The agreement shall implement the provisions of this Supplemental Indenture that relate to such agent.  The Company shall notify the Trustee of the name and address of any such agent.  If the Company fails to maintain a Security Registrar, Paying Agent or Conversion Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 607 of the Original Indenture.  The Company or any of its domestically organized Wholly Owned Subsidiaries may act as Paying Agent, Conversion Agent or Security Register.

 

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The Company may remove any Security Registrar, Paying Agent or Conversion Agent upon written notice to such Security Registrar, Paying Agent or Conversion Agent and to the Trustee; provided that no such removal shall become effective until (1) 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 (2) 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 (1) 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 Register only if the Trustee also resigns as Trustee in accordance with Section 609 of the Original Indenture.

 

Section 2.05.  Registration of Transfer and Exchange.  Notwithstanding anything in Section 305 of the Original Indenture to the contrary, neither the Company nor the Trustee nor any Security Registrar shall be required to exchange, issue or register a transfer of (a) any Notes or portions thereof surrendered for conversion pursuant to Article 5 or (b) any Notes or portions thereof tendered for repurchase (and not withdrawn) pursuant to Section 4.01.

 

Section 2.06.  Global Securities.  The following provisions shall apply to Global Securities in addition to the provisions set forth in Section 311 of the Original Indenture:

 

(a)                        Physical Securities will 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 Notes or the Indenture upon the occurrence and during the continuance of an Event of Default.

 

Notes issued in exchange for a Global Security or any portion thereof pursuant to this Section 2.06(a) 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, all in accordance with the provisions of Section 311 of the Original Indenture applicable to the exchange in whole or in part of a Global Security for definitive securities.

 

(b)                       Upon any request described in Section 2.06(a), the Company will promptly make available to the Trustee a sufficient supply of Physical Securities in definitive, fully registered form, without interest coupons.

 

(c)                        At such time as all interests in a Global Security have been repurchased, converted, cancelled or exchanged for Notes in certificated form, 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 Notes in certificated form, the principal amount of such Global Security shall, in accordance with the standing procedures and instructions existing between the 

 

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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.

 

Section 2.07.  Repurchase and Cancellation.  To the extent permitted by law, the Company may from time to time repurchase the Notes in open market purchases or negotiated transactions without prior notice to Holders.  The Company shall surrender any Notes repurchased by it for cancellation pursuant to Section 309 of the Original Indenture and any such repurchased Notes shall be deemed to be no longer Outstanding.  Any Notes surrendered for cancellation by the Company shall not be reissued or resold.

 

Section 2.08.  Additional Notes.  The Company may, from time to time without the consent of the Holders of Outstanding Notes, issue additional Notes pursuant to this Supplemental Indenture (“Additional Notes”) with the same terms and with the same CUSIP number as the Notes issued on the date of this Supplemental Indenture in an unlimited amount; provided that such Additional Notes are issued pursuant to a “qualified reopening” or are treated as issued without original issue discount for U.S. federal income tax purposes.  The Notes issued on the date of this Supplemental Indenture and any Additional Notes shall be treated as a single class for all purposes under the Indenture, including waivers, amendments, offers to purchase and U.S. federal income tax purposes. No Additional Notes may be issued if on the Issue Date therefor any Event of Default has occurred and is continuing.

 

ARTICLE 3
  PARTICULAR COVENANTS OF THE COMPANY

 

Section 3.01.  Covenants in Original Indenture.  The following covenants of the Company are made in addition to the covenants set forth in Article Ten of the Original Indenture.

 

Section 3.02.  Book-Entry System.  If the Notes cease to trade in the Depositary’s book-entry settlement system, the Company covenants and agrees that it shall use reasonable efforts to make such other book entry arrangements that it determines are reasonable for the Notes.

 

Section 3.03.  Compliance Certificate.  The Company shall deliver to the Trustee, as promptly as practicable 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 given under this Section 3.03 shall be delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.

 

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ARTICLE 4
  REPURCHASE OF NOTES

 

Section 4.01.  Right To Require Repurchase Upon a Fundamental Change.  (a)  If a Fundamental Change occurs at any time, then each Holder shall have the right, at such Holder’s option, to require the Company to repurchase all of such Holder’s Notes or any portion thereof that is equal to $1,000 or an integral multiple of $1,000 principal amount, for cash, on a date (the “Fundamental Change Repurchase Date”) of the Company’s choosing that is not less than 20 calendar days nor more than 35 calendar days after the date of the Fundamental Change Repurchase Right Notice, at a repurchase price (the “Fundamental Change Repurchase Price”) equal to 100% of the principal amount thereof, plus accrued and unpaid Interest thereon to, but not including, the Fundamental Change Repurchase Date, unless such Fundamental Change Repurchase Date falls after a Record Date for the payment of Interest and on or prior to the corresponding Interest Payment Date, in which case the Company shall pay the full amount of accrued and unpaid Interest payable on such Interest Payment Date to the Holder of record at the close of business on the corresponding Record Date.

 

Notwithstanding the foregoing, no Holder shall have the right to require the Company to repurchase any of its Notes under clause (2) of the definition of Fundamental Change (and the Company shall not be required to deliver the Fundamental Change Repurchase Notice incidental thereto) if at least 90% of the consideration paid for the Common Stock (excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights and cash dividends) in a merger or consolidation or such other transaction otherwise constituting a Fundamental Change under clause (2) of the definition thereof consists of shares of common stock traded on any of the New York Stock Exchange, the NASDAQ Global Market, the NASDAQ Global Select Market or the American Stock Exchange (or any of their respective successors) (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 the completion of the merger or consolidation or such other transaction the Notes become convertible into cash (in respect of the Principal Portion) and, if applicable, such shares of such common stock pursuant to Section 5.12.

 

Repurchases of Notes under this Section 4.01 shall be made, at the option of the Holder thereof, upon:

 

(i)                                     delivery to the Trustee (or other Paying Agent appointed by the Company) by a Holder of a duly completed notice (the “Fundamental Change Repurchase Notice”) in the form set forth on the reverse of the Note on or before the Business Day prior to the Fundamental Change Repurchase Date (the “Fundamental Change Expiration Time”); and

 

(ii)                                  delivery or book-entry transfer of the Notes to the Trustee (or other Paying Agent appointed by the Company) at any time after delivery of the Fundamental Change Repurchase Notice (together with all necessary endorsements, if the Notes are Physical Securities) at the Corporate Trust Office of the Trustee (or other Paying Agent appointed 

 

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by the Company), such delivery being a condition to receipt by the Holder of the Fundamental Change Repurchase Price therefor.

 

The Fundamental Change Repurchase Notice shall state:

 

(A)                    if certificated, the certificate numbers of Notes to be delivered for repurchase;

 

(B)                      the portion of the principal amount of Notes to be repurchased, which must be $1,000 or an integral multiple thereof; and

 

(C)                      that the Notes are to be repurchased by the Company pursuant to the applicable provisions of the Notes and the Indenture;

 

provided, however, that if the Notes are Global Securities, the Fundamental Change Repurchase Notice must comply with applicable Depositary procedures.

 

Any repurchase by the Company contemplated pursuant to the provisions of this Section 4.01 shall be consummated by the delivery of the consideration to be received by the Holder on the later of (i) the Fundamental Change Repurchase Date and (ii) the time of the book-entry transfer or the delivery of the Note.

 

The Trustee (or other Paying Agent appointed by the Company) shall promptly notify the Company of the receipt by it of any Fundamental Change Repurchase Notice or written notice of withdrawal thereof in accordance with the provisions of subsection (c) of this Section 4.01.

 

Any Note that is to be repurchased only in part shall be, if certificated, surrendered to the Trustee (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Note without service charge, a new Note or Notes, containing identical terms and conditions, each in an authorized denomination in aggregate principal amount equal to and in exchange for the unrepurchased portion of the principal of the Note so surrendered, or, if a Global Security, the Trustee, or the Custodian at the direction of the Trustee, shall make a notation on such Global Security as to the reduction in the principal amount represented thereby for the repurchased portion of the principal of the Note.

 

(b)                       After the occurrence of a Fundamental Change, but on or before the 10th calendar day following such occurrence, the Company shall provide to all Holders of the Notes 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. Such mailing shall be by first class mail. Simultaneously with providing such Fundamental Change Repurchase Right Notice, the Company shall publish a notice containing the information included therein in a newspaper of general circulation in The 

 

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City of New York or on the Company’s website or through such other public medium as the Company may use at such time.

 

Each 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 last date on which a Holder may exercise the repurchase right, if applicable;

 

(iv)                              the Fundamental Change Repurchase Price, if applicable;

 

(v)                                 the Fundamental Change Repurchase Date, if applicable;

 

(vi)                              the name and address of the Paying Agent and the Conversion Agent, if applicable;

 

(vii)                           the applicable Conversion Rate and any adjustments to the applicable Conversion Rate;

 

(viii)                        that the Notes 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 the Indenture;

 

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

 

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

 

(xi)                                the procedures that Holders must follow to require the Company to repurchase their Notes.

 

No failure of the Company to give the foregoing notices and no defect therein shall limit the Holders’ repurchase rights or affect the validity of the proceedings for the repurchase of the Notes pursuant to this Section 4.01.

 

(c)                        A Fundamental Change Repurchase Notice may be withdrawn, in whole or in part, by means of a written notice of withdrawal delivered to the Paying Agent in accordance with the Fundamental Change Repurchase Right Notice at any time prior to the Fundamental Change Expiration Time, specifying:

 

(i)                                     the principal amount of the Notes with respect to which such notice of withdrawal is being submitted,

 

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(ii)                                  if certificated Notes have been issued, the certificate numbers of the withdrawn Notes,

 

(iii)                               the principal amount, if any, of such Note that remains subject to the original Fundamental Change Repurchase Notice, which portion must be in principal amounts of $1,000 or an integral multiple of $1,000;

 

provided, however, that if the Notes are not in certificated form, the notice must comply with appropriate procedures of the Depositary.

 

(d)                       On or prior to 11:00 a.m., New York City time, on the Fundamental Change Repurchase Date, the Company shall deposit with the Trustee (or other Paying Agent appointed by the Company or if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust) an amount of money sufficient to repurchase on the Fundamental Change Repurchase Date all of the Notes to be repurchased on such date at the Fundamental Change  Repurchase Price. Subject to receipt of funds and/or Notes by the Trustee (or other Paying Agent appointed by the Company), payment for Notes surrendered for repurchase (and not withdrawn) prior to the Fundamental Change Expiration Time shall be made on the later of (x) the Fundamental Change Repurchase Date with respect to such Note (provided the Holder has satisfied the conditions to the payment of the Fundamental Change Repurchase Price in this Section 4.01), and (y) the time of book-entry transfer or the delivery of such Note to the Trustee (or other Paying Agent appointed by the Company) by the Holder thereof in the manner required by this Section 4.01 by mailing checks for the amount payable to the Holders of such Notes entitled thereto as they shall appear in the Security Register; provided, however, that payments to the Depositary shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee. The Trustee shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Fundamental Change Repurchase Price.

 

(e)                        If the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to repurchase on the Fundamental Change Repurchase Date all the Notes or portions thereof that are to be repurchased as of the Business Day following the Fundamental Change Repurchase Date, then on and after the Fundamental Change Repurchase Date (i) such Notes shall cease to be Outstanding and Interest, if any, shall cease to accrue on such Notes, whether or not book-entry transfer of the Notes has been made or the Notes have been delivered to the Trustee or Paying Agent and (ii) all other rights of the Holders of such Notes shall terminate, other than the right to receive (A) the Fundamental Change Repurchase Price upon delivery or transfer of the Notes, and (B) the Interest payable on the Interest Payment Date corresponding to the Record Date immediately preceding the Fundamental Change Repurchase Date if the Fundamental Change Repurchase Date falls between such Record Date and such Interest Payment Date .

 

(f)                          In connection with any repurchase of Notes pursuant to this Article 4, the Company hereby agrees to:

 

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(i)                                     comply with the provisions of Rule 13e-1, Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act that may then be applicable; and

 

(ii)                                  otherwise comply with all applicable federal and state securities laws.

 

(g)                       No Notes may be repurchased at the option of Holders upon a Fundamental Change if the principal amount of the Notes has been accelerated, and such acceleration has not been rescinded, on or prior to such date (except in the case of an acceleration resulting from the Company’s default in the payment of the Fundamental Change Repurchase Price with respect to such Notes).

 

ARTICLE 5
  CONVERSION

 

Section 5.01.  Conversion Privilege and Conversion Rate.  (a) Subject to the conditions described in subsections (i), (ii), and (iii) below, and upon compliance with the provisions of this Article 5, a Holder shall have the right, at such Holder’s option, to convert all or any portion (if the portion to be converted is $1,000 principal amount or an integral multiple thereof) of such Note at any time prior to the close of business on the Scheduled Trading Day immediately preceding December 15, 2016, at the Conversion Rate (subject to adjustment as provided in this Supplemental Indenture) per $1,000 principal amount of the Note (the “Conversion Obligation”) under the circumstances and during the periods set forth below. On and after December 15, 2016, regardless of the conditions described in subsections (i), (ii) and (iii) below, and upon compliance with the provisions of this Article 5, a Holder shall have the right, at such Holder’s option, to convert all or any portion (if the portion to be converted is $1,000 principal amount or an integral multiple thereof) of Notes at the applicable Conversion Rate at any time prior to the close of business on the third Scheduled Trading Day immediately preceding the Stated Maturity Date.

 

(i)                                     The Notes shall be convertible prior to the close of business on the Scheduled Trading Day immediately preceding December 15, 2016, during the five Business Day period after any five consecutive Trading Day period (the “Measurement Period”) in which the Trading Price per $1,000 in principal amount of the Notes, determined as set forth below, for each Trading Day of the Measurement Period was less than 98% of the product of (x) the Last Reported Sale Price of the Common Stock and (y) the applicable Conversion Rate for the Notes for such Trading Day, as determined by the Bid Solicitation Agent and subject to compliance with the procedures and conditions described below concerning the Bid Solicitation Agent’s obligation to make such determination (the “Trading Price Condition”). The Bid Solicitation Agent shall have no obligation to determine the Trading Price of the Notes and the Company shall have no obligation to make such request unless a Holder provides the Company with reasonable evidence that the Trading Price per $1,000 in principal amount of the Notes would be less than 98% of the product of (a) the Last Reported Sale Price of the Common Stock and (b) the applicable Conversion Rate, in which case and at such time the Company shall 

 

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instruct the Bid Solicitation Agent to determine the Trading Price of the Notes beginning on the next Trading Day and on each successive Trading Day until the date on which the Trading Price per $1,000 in principal amount of the Notes is greater than or equal to 98% of the product of (a) the Last Reported Sale Price of the Common Stock and (b) the applicable Conversion Rate. If the Company does not, when obligated to do so pursuant to this clause (i), instruct the Bid Solicitation Agent to determine the Trading Price of the Notes, or if the Company so instructs the Bid Solicitation Agent, but the Bid Solicitation Agent does not make such determination, then the Trading Price Condition shall be deemed to have been satisfied until such failure has been cured. If the Trading Price Condition has been met, the Company shall promptly notify the Holders of the Notes. If, at any time after the Trading Price Condition has been met, the Trading Price per $1,000 in principal amount of the Notes is greater than 98% of the product of (a) the Last Reported Sale Price of the Common Stock and (b) the applicable Conversion Rate for such date, the Company shall so promptly notify the Holders of the Notes, and the Bid Solicitation Agent shall have no further obligation to determine the Trading Price of the Notes unless requested by the Company to do so again in writing pursuant to this Section 5.01(a)(i).

 

(ii)                                  The Notes shall be convertible prior to the close of business on the Scheduled Trading Day immediately preceding December 15, 2016 during any calendar quarter after the calendar quarter ending March 31, 2012 (and only during such calendar quarter), if the Last Reported Sale Price of the Common Stock for twenty (20) or more Trading Days in a period of thirty (30) consecutive Trading Days ending on the last Trading Day of the immediately preceding calendar quarter exceeds 130% of the applicable Conversion Price in effect on each such Trading Day, all as determined by the Company and communicated to the Trustee (the “Stock Price Condition”). If the Stock Price Condition has been satisfied, the Company shall promptly notify Holders of Notes.

 

(iii)                               The Notes shall be convertible prior to the close of business on the Scheduled Trading Day immediately preceding December 15, 2016, as provided in subsections (b), (c) and (d) of this Section 5.01.

 

(b)                       If the Company elects to:

 

(i)                                     distribute to all or substantially all holders of Common Stock any rights or warrants entitling them for a period of not more than 60 calendar days after the record date for such distribution to subscribe for or purchase shares of Common Stock at a price per share less than the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the declaration date of the distribution; or

 

(ii)                                  distribute to all or substantially all holders of Common Stock the Company’s assets (including cash), debt securities of the Company or rights to purchase the Company’s securities, which distribution has a per share value (as determined by the Board of Directors) exceeding 5% of the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the declaration date for such distribution,

 

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then, in either case, the Company shall notify Holders and the Trustee of such distribution and of the resulting conversion right at least 65 Scheduled Trading Days prior to the Ex-Date for such distribution.  Once the Company has given such notice, Holders may surrender the Notes for conversion at any time until the earlier of (x) the close of business on the Business Day immediately prior to the Ex-Date for such distribution and (y) the date the Company announces that such distribution will not take place, even if the Notes are not otherwise convertible at such time. A Holder may not exercise this right if such Holder is permitted to participate (as a result of holding the Notes, and at the same time as holders of the Common Stock participate) in any distribution referred to in clause (i) or clause (ii) of this Section 5.01(b) as if such Holder held a number of shares of Common Stock equal to the applicable Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder, without having to convert its Notes.

 

(c)                        If a transaction or event constituting a Fundamental Change occurs, a Holder may surrender Notes for conversion at any time after the effective date of such transaction or event until (i) the Fundamental Change Repurchase Date corresponding to such transaction or event or (ii) if there is no such Fundamental Change Repurchase Date, 30 Scheduled Trading Days following the effective date of such transaction or event and, upon such surrender the Holder may be entitled to an increase in the Conversion Rate by Additional Shares of Common Stock, if any, as specified in Section 5.02.  If a transaction or event constituting a Fundamental Change occurs, the Company shall notify, in the manner provided for in Section 106 of the Original Indenture, each of the Holders and the Trustee of the occurrence of any such transaction or event on the effective date of such transaction or event.

 

(d)                       If the Company is a party to a combination, merger, recapitalization, reclassification, binding share exchange or other similar transaction or sale or conveyance of all or substantially all of its property and assets (excluding a pledge of securities issued by any of the Company’s Subsidiaries but, for the avoidance of doubt, not excluding any foreclosure thereon), in each case pursuant to which the Common Stock would be converted into cash, securities and/or other property that does not constitute a Fundamental Change, then the Holders shall have the right to convert Notes at any time beginning on the earlier of (i) the date on which the Company gives notice or makes a public announcement of such transaction and (ii) the effective date of such transaction, and ending on the 20th Scheduled Trading Day following the effective date of such transaction. The Company shall notify each of the Holders and the Trustee as soon as practicable of the anticipated effective date of any such transaction to which the provisions of this Section 5.01(d) shall apply.

 

Section 5.02.  Conversion Rate Adjustment Upon Certain Make-whole Fundamental Changes.  (a)  If a Holder elects to convert Notes in connection with a Make-Whole Fundamental Change that occurs prior to the Stated Maturity Date, the Conversion Rate applicable to each $1,000 principal amount of Notes so converted shall be increased by an additional number of shares of Common Stock (the “Additional Shares”) as described below; provided, however, that no increase shall be made pursuant to this Section 5.02 in the case of a transaction constituting a Fundamental Change described in clause (2) of such definition where 90% or more of the consideration for the Common Stock (excluding cash payments for fractional 

 

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shares and cash payments made pursuant to dissenters’ appraisal rights) in such transaction consists of shares of common stock traded on any of the New York Stock Exchange, the NASDAQ Global Market, the NASDAQ Global Select Market or the American Stock Exchange (or any of their respective successors) (or that will be so traded or quoted immediately following the transaction) and as a result of such transaction or transactions the Notes become convertible into cash (in respect of the Principal Portion) and such shares of common stock pursuant to Section 5.12. Settlement of Notes tendered for conversion to which Additional Shares shall be added to the Conversion Rate as provided in this subsection shall be made pursuant to Section 5.04.  For purposes of this Section 5.02, a conversion shall be deemed to be “in connection with” a Make-Whole Fundamental Change if the related Conversion Date occurs on or after the Effective Date of such Make-Whole Fundamental Change, until the related Fundamental Change Repurchase Date or, if there is no such Fundamental Change Repurchase Date, 30 Scheduled Trading Days following such Effective Date (regardless of whether the Notes are otherwise convertible because of the conditions set forth in Section 5.01), as applicable.  The Company shall notify Holders and the Trustee of the occurrence of any such Make-Whole Fundamental Change on the Effective Date of such transaction or event.

 

(b)                       The number of Additional Shares by which the Conversion Rate shall be increased in the event of a Make-Whole Fundamental Change shall be determined by the Company by reference to the table attached as Schedule A hereto, based on the date on which the Make-Whole Fundamental Change becomes effective (the “Effective Date”) and the Stock Price.  The exact Stock Price and Effective Dates may not be set forth in the table attached as Schedule A hereto, in which case:

 

(i)                                     if the Stock Price is between two Stock Price amounts in the table or the Effective Date is between two Effective Dates in the table, the number of Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for higher and lower Stock Price amounts and the two Effective Dates, as applicable, based on a 365-day year;

 

(ii)                                  if the Stock Price is greater than $75.00 per share (subject to adjustment in the same manner as set forth in paragraph (c) below), no Additional Shares shall be added to the Conversion Rate; and

 

(iii)                               if the Stock Price is less than $10.23 per share (subject to adjustment in the same manner as set forth in paragraph (c) below), no Additional Shares shall be added to the Conversion Rate.

 

Notwithstanding the foregoing, in no event shall the Conversion Rate exceed 97.7517 per $1,000 in principal amount of Notes (subject to adjustments in the same manner as the Conversion Rate as set forth in Section 5.06).

 

(c)                        The Stock Prices set forth in the first column of the table in Schedule A hereto (i.e., the row headers) shall be adjusted by the Company as of any date on which the Conversion Rate of the Notes is otherwise adjusted. The adjusted Stock Prices shall equal the Stock Prices

 

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applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the applicable Conversion Rate immediately prior to the adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of Additional Shares within the table attached as Schedule A hereto shall be adjusted in the same manner as the Conversion Rate as set forth in Section 5.06 (other than by operation of an adjustment to the Conversion Rate by adding Additional Shares).

 

Section 5.03.  Exercise of Conversion Privilege.  (a)  Before any Holder of a Note shall be entitled to convert the same as set forth above, such Holder shall (i) in the case of a Global Security, comply with the procedures of the Depositary in effect at that time and, if required, pay funds equal to Interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 5.04(e) and, if required, pay all taxes or duties, if any, as set forth in Section 5.09 and (ii) in the case of a Physical Security, (A) complete and manually sign and deliver an irrevocable written notice to the Conversion Agent in the form set forth in Exhibit A hereto (or a facsimile thereof) (a “Conversion Notice”) at the office of the Conversion Agent and shall state in writing therein the principal amount of Notes to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of Common Stock, if any, to be delivered upon settlement of the Conversion Obligation to be registered, (B) surrender such Notes, duly endorsed to the Company or in blank (and accompanied by appropriate endorsement and transfer documents), at the office of the Conversion Agent, (C) if required, pay all transfer or similar taxes, if any, as set forth in Section 5.09 and (D) if required, pay funds equal to Interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 5.04(e). A Note shall be deemed to have been converted immediately prior to the close of business on the date (the “Conversion Date”) that the Holder has complied with the requirements set forth in this Section 5.03.

 

Notwithstanding the foregoing, no Conversion Notice with respect to any Notes may be tendered by a Holder thereof if such Holder has also tendered a Fundamental Change Repurchase Notice and not validly withdrawn such Fundamental Change Repurchase Notice in accordance with the applicable provisions of Article 4.

 

If more than one Note shall be surrendered for conversion at one time by the same Holder, the Conversion Obligation with respect to such Notes, if any, that shall be payable upon conversion shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof to the extent permitted thereby) so surrendered.

 

(b)        In case any Note shall be surrendered for partial conversion, the Company shall execute and the Trustee shall, as provided in a Company Order, authenticate and deliver to or upon the written order of the Holder of the Note so surrendered, without charge to such Holder, a new Note or Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Notes.

 

(c)        Upon the conversion of an interest in a Global Security, the Trustee, or the Custodian at the direction of the Trustee, shall make a notation on such Global Security as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in 

 

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writing of any conversion of Notes effected through any Conversion Agent other than the Trustee.

 

Section 5.04.  Settlement of Conversion Obligation.  (a)  Subject to clause (c) below, the Company shall satisfy the Conversion Obligation with respect to each $1,000 in principal amount of Notes tendered for conversion, on the third Business Day immediately following the last VWAP Trading Day of the related Observation Period, by paying cash and delivering shares of fully paid Common Stock, if applicable, equal to the aggregate cash and the number of shares of Common Stock, if applicable, for each VWAP Trading Day of such Observation Period (such cash and shares of Common Stock for any VWAP Trading Day, the “Daily Settlement Amount”) determined as follows:

 

(i)            an amount of cash equal to the lesser of: (x) one-sixtieth (1/60th) of $1,000 and (y) the Daily Conversion Value relating to such VWAP Trading Day (such cash amount, the “Principal Portion”); and

 

(ii)           if such Daily Conversion Value exceeds one-sixtieth (1/60th) of $1,000, a number of shares of Common Stock (the “Daily Share Amount”), subject to the Company’s right to pay cash in lieu of all or a portion of the Daily Share Amount in accordance with Section 5.04(b), equal to (A) the difference between such Daily Conversion Value and the Principal Portion for such VWAP Trading Day, divided by (B) the Daily VWAP of the Common Stock for such VWAP Trading Day.

 

The Daily Settlement Amounts shall be determined by the Company promptly following the last VWAP Trading Day of the Observation Period.

 

(b)        The Company may elect, subject to the requirements set forth in this clause (b), to deliver cash in lieu of all or a portion of the Daily Share Amount.  By the close of business on the VWAP Trading Day prior to the first Scheduled Trading Day of the applicable Observation Period, the Company may specify a percentage of the Daily Share Amount that will be settled in cash (the “Cash Percentage”) and the Company shall notify Holders of such Cash Percentage through written notice to the Trustee (the “Cash Percentage Notice”).  With respect to any Notes that are converted on or after December 15, 2016, the Cash Percentage that the Company specifies for the corresponding Observation Period shall apply to all such conversions.  If the Company timely elects to specify a Cash Percentage, (i) the amount of cash that the Company shall pay in lieu of the applicable portion of the Daily Share Amount in respect of each VWAP Trading Day in the applicable Observation Period shall equal: (A) the Cash Percentage, multiplied by (B) the Daily Share Amount for such Trading Day (assuming the Company had not specified a Cash Percentage), multiplied by (C) the Daily VWAP for such VWAP Trading Day and (ii) the number of shares of Common Stock deliverable in respect of each VWAP Trading Day in the applicable Observation Period (in lieu of the full Daily Share Amount for such Trading Day) shall be a percentage of the Daily Share Amount (assuming the Company had not specified a Cash Percentage) equal to 100% minus the Cash Percentage.  If the Company does not specify a Cash Percentage, the Company must settle the entire Daily Share Amount for each VWAP Trading Day in such Observation Period in cash as if it had specified a Cash Percentage 

 

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of 100%.  The Company may, at its option, revoke any Cash Percentage Notice through written notice to the Trustee by the close of business on the VWAP Trading Day prior to the first Scheduled Trading Day of the applicable Observation Period.

 

(c)        Notwithstanding clauses (a) and (b) above, if, following a Make-Whole Fundamental Change, Notes are surrendered for conversion following the related Effective Date and the Reference Property consists solely of cash as set forth in Section 5.12, then the Company shall satisfy the related Conversion Obligations by paying, on the third Business Day following the Conversion Date, cash in an amount equal to the applicable Conversion Rate multiplied by the Stock Price.

 

(d)        Any cash amounts due upon conversion by a Holder of Notes surrendered for conversion shall be paid by the Company to such Holder, or such Holder’s nominee or nominees.  In addition, the Company shall issue, or shall cause to be issued, any shares of Common Stock due upon conversion to such Holder, or such Holder’s nominee or nominees, certificates or a book-entry transfer through the Depositary (together with any cash in lieu of fractional shares).

 

(e)        Upon conversion, a Holder shall not receive any separate cash payment for accrued and unpaid Interest except as set forth in this clause (e). The Company’s settlement of the Conversion Obligation as described above shall be deemed to satisfy its obligation to pay the principal amount of the Note and accrued and unpaid Interest to, but not including, the Conversion Date. As a result, accrued and unpaid Interest to, but not including, the Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Notwithstanding the preceding two sentences, if Notes are converted after the close of business on a Record Date for the payment of Interest, Holders of such Notes at the close of business on the Record Date shall receive the Interest payable on such Notes on the corresponding Interest Payment Date notwithstanding the conversion. Notes surrendered for conversion during the period from the close of business on any Record Date to the open of business on the immediately following Interest Payment Date must be accompanied by funds equal to the amount of Interest payable on the Notes so converted, except that no such payment need be made:

 

(i)            if the Company has specified a Fundamental Change Purchase Date that is after a Record Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date;

 

(ii)           to the extent of any overdue Interest, if any overdue Interest remains unpaid at the time of conversion with respect to such Notes; or

 

(iii)          in respect of any conversion for which the related Conversion Date occurs after the close of business on the Record Date immediately preceding the Stated Maturity Date.

 

Except as described above, no payment or adjustment shall be made for accrued Interest on converted Notes.

 

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(f)         With respect to a conversion of Notes pursuant to this Article 5, at and after the close of business on each VWAP Trading Day of the relevant Observation Period, the Person in whose name any certificate representing any shares of Common Stock issuable upon such conversion is registered shall be treated as a stockholder of record of the Company in an amount of shares equal to the product of (i) the Daily Share Amount for such VWAP Trading Day and (ii) 100% minus the Cash Percentage.  A Holder of a Note is not entitled, as such, to any rights of a holder of Common Stock until, if such Holder converts such Note and is entitled pursuant hereto to receive shares of Common Stock in respect of such conversion, the close of business on each such VWAP Trading Day with respect to such amount of shares of Common Stock.

 

Section 5.05.  Fractions of Shares.  No fractional shares of Common Stock shall be issued upon conversion of any Note or Notes. If more than one Note shall be surrendered for conversion at one time by the same Holder, the number of full shares which shall be issuable upon conversion thereof shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof) so surrendered. Instead of any fractional share of Common Stock that would otherwise be issuable upon conversion of any Note or Notes (or specified portions thereof), the Company shall calculate and pay a cash adjustment in respect of such fraction (calculated to the nearest 1/100th of a share) in an amount equal to the same fraction of the Daily VWAP of the Common Stock on the last VWAP Trading Day of the relevant Observation Period.

 

Section 5.06.  Adjustment of Conversion Rate.  The Conversion Rate shall be adjusted from time to time by the Company as follows, except that the Company shall not make any adjustments to the Conversion Rate if Holders of the Notes participate (as a result of holding the Notes, and at the same time and upon the same terms as holders of the Common Stock participate) in any of the transactions described below as if such Holders held a number of shares of Common Stock equal to the applicable Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Holders, without having to convert their Notes:

 

(a)        If the Company issues shares of Common Stock as a dividend or distribution on shares of Common Stock, or if the Company effects a share split or share combination, the Conversion Rate shall be adjusted based on the following formula:

 



 

where,

 

CR1 = the Conversion Rate in effect immediately after the close of business on the Business Day prior to the Ex-Date for such dividend or distribution or the effective date of such share split or combination, as the case may be;

 

CR0 = the Conversion Rate in effect immediately prior to the close of business on the Business Day prior to the Ex-Date for such dividend or distribution or the effective date of such share split or combination, as the case may be;

 

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OS1 = the number of shares of Common Stock that will be outstanding (including as a result of such share split or combination, as the case may be) as of the close of business on the Business Day prior to the Ex-Date for such dividend or distribution and immediately after giving effect to such dividend or distribution or immediately after the effective date of such share split or combination, as the case may be; and

 

OS0 = the number of shares of Common Stock outstanding immediately prior to the close of business on the Business Day prior to the Ex-Date for such dividend or distribution or the effective date of such share split or combination, as the case may be.

 

Such adjustment shall become effective immediately after the close of business on the Business Day prior to the Ex-Date fixed for such dividend or distribution or the effective date for such share split or share combination. If any dividend or distribution of the type described in this Section 5.06(a) is declared but not so paid or made, or the outstanding shares of Common Stock are not split or combined, as the case may be, the Conversion Rate shall be immediately readjusted, effective as of the date the Company determines not to pay such dividend or distribution, or split or combine the outstanding shares of Common Stock, as the case may be, to the Conversion Rate that would then be in effect if such dividend, distribution, share split or share combination had not been declared.

 

(b)        If the Company distributes to all or substantially all holders of its outstanding shares of Common Stock any rights or warrants entitling them for a period of not more than 60 days after the record date for such distribution to subscribe for or purchase shares of Common Stock, at a price per share less than the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the declaration date of such distribution, the Conversion Rate shall be adjusted based on the following formula; provided that the Conversion Rate shall be readjusted to the extent that such rights or warrants are not exercised prior to their expiration:

 



 

where,

 

CR1 = the Conversion Rate in effect immediately after the close of business on the Business Day prior to the Ex-Date for such distribution;

 

CR0 = the Conversion Rate in effect immediately prior to the close of business on the Business Day prior to the Ex-Date for such distribution;

 

OS0 = the number of shares of Common Stock outstanding immediately prior to the close of business on the Business Day prior to the Ex-Date for such distribution;

 

X = the total number of shares of Common Stock issuable pursuant to such rights or warrants; and

 

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Y = the number of shares of Common Stock equal to the aggregate price payable to exercise such rights or warrants divided by the average of the Last Reported Sale Prices of Common Stock over the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the Ex-Date for such distribution.

 

Such adjustment shall be successively made whenever any such rights or warrants are distributed and shall become effective immediately after the opening of business on the Ex-Date for such distribution. The Company shall not issue any such rights or warrants in respect of shares of the Common Stock held in treasury by the Company. To the extent that shares of the Common Stock are not delivered after the expiration of such rights or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such Ex- Date for such distribution had not been fixed.

 

In determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than such Last Reported Sale Price, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors.

 

(c)        If the Company distributes shares of its Capital Stock, evidences of its indebtedness or other assets or property of the Company to all or substantially all holders of its Common Stock, excluding:

 

(i)            dividends or distributions as to which an adjustment was effected pursuant to Section 5.06(a) or Section 5.06(b);

 

(ii)           dividends or distributions paid exclusively in cash; and

 

(iii)          Spin-Offs described below in this subsection (c);

 

(any of such shares of Capital Stock, evidences of indebtedness or other assets or property hereinafter in this subsection (c) called the “Distributed Property”), then, in each such case, the Conversion Rate shall be adjusted based on the following formula:

 



 

where,

 

CR1 = the Conversion Rate in effect immediately after the close of business on the Business Day prior to the Ex-Date for such distribution;

 

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CR0 = the Conversion Rate in effect immediately prior to the close of business on the Business Day prior to the Ex-Date for such distribution;

 

SP0 = the average of the Last Reported Sale Prices of Common Stock over the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the Ex-Date for such distribution; and

 

FMV = the fair market value as determined by the Board of Directors of the Distributed Property distributed with respect to each outstanding share of Common Stock on the Ex-Date for such distribution.

 

Such adjustment shall become effective immediately after the close of business on the Business Day prior to the Ex-Date for such distribution; provided that if “FMV” as set forth above is equal to or greater than “SP0” as set forth above, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder of Notes has the right to receive, for each $1,000 principal amount of Notes, the amount of Distributed Property such Holder would have received had such Holder owned a number of shares of Common Stock equal to the Conversion Rate on the record date for such distribution, without being required to convert the Notes. If such distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. If the Board of Directors determines “FMV” for purposes of this Section 5.06(c) by reference to the actual or when issued trading market for any securities, it must in doing so consider the prices in such market over the same period used in computing the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the Ex-Date for such distribution.

 

With respect to an adjustment pursuant to this subsection (c) where there has been a payment of a dividend or other distribution on the Common Stock in shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit of the Company (a “Spin-Off”), the Conversion Rate shall be increased based on the following formula:

 



 

where,

 

CR1 = the Conversion Rate in effect immediately after the close of business on the last day of the Valuation Period;

 

CR0 = the Conversion Rate in effect immediately prior to the close of business on the last day of the Valuation Period;

 

FMV0 = the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common 

 

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Stock over the first 10 consecutive Trading Day period immediately following, and including, the effective date of the Spin-Off (such period, the “Valuation Period”); and

 

MP0 = the average of the Last Reported Sale Prices of the Common Stock over the Valuation Period.

 

Such adjustment to the Conversion Rate under the foregoing provisions of this subsection (c) shall be made immediately after the close of business on the last day of the Valuation Period, with retroactive effect to the open of business on the effective date for the applicable Spin-Off.

 

To the extent that the final day of the related Observation Period occurs during the Valuation Period, the Company shall satisfy the Conversion Obligation on the third Business Day following the last day of the Valuation Period.

 

Rights or warrants distributed by the Company to all holders of Common Stock, entitling the holders thereof to subscribe for or purchase shares of the Company’s Capital Stock, including Common Stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this subsection (c) (and no adjustment to the Conversion Rate under this subsection (c) shall be required) until the occurrence of the earliest Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this subsection (c). If any such rights or warrants are subject to events, upon the occurrence of which such rights or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Ex-Date with respect to new rights or warrants with such rights (and a termination or expiration of the existing rights or warrants without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this subsection (c) was made, (1) in the case of any such rights or warrants that shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Rate shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder or holders of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights and warrants had not been issued.

 

For purposes of this subsection (c) and subsections (a) and (b) of this Section 5.06, any dividend or distribution to which this subsection (c) is applicable that also includes shares of 

 

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Common Stock to which subsection (a) of this Section 5.06 applies or rights or warrants to subscribe for or purchase shares of Common Stock to which subsection (b) of this Section 5.06 applies, shall be deemed instead to be (1) a dividend or distribution of the shares of Capital Stock, evidences of indebtedness or other assets or property, other than such shares of Common Stock or such rights or warrants, to which this subsection (c) applies (and any Conversion Rate adjustment required by this subsection (c) with respect to such dividend or distribution shall then be made) immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights or warrants (and any further Conversion Rate adjustment required by subsections (a) and (b) of this Section 5.06 with respect to such dividend or distribution shall then be made), except (A) the Ex-Date of such dividend or distribution shall under this subsection (c) be substituted as “the Ex-Date” within the meaning of subsection (a) and subsection (b) of this Section 5.06 and (B) any shares of Common Stock included in such dividend or distribution shall not be deemed “outstanding immediately prior to the close of business on the Business Day prior to the Ex-Date for such dividend or distribution or the effective date of such share split or combination, as the case may be” within the meaning of subsection (a) of this Section 5.06 or “outstanding immediately prior to the close of business on the Business Day prior to the Ex-Date for such distribution” within the meaning of subsection (b) of this Section 5.06.

 

(d)        If the Company pays cash dividends or distributions to all or substantially all holders of its Common Stock, the Conversion Rate shall be adjusted based on the following formula:

 



 

where,

 

CR1 = the Conversion Rate in effect immediately after the close of business on the Business Day prior to the Ex-Date for such distribution;

 

CR0 = the Conversion Rate in effect immediately prior to the close of business on the Business Day prior to the Ex-Date for such distribution;

 

SP0 = the Last Reported Sale Price of Common Stock on the Trading Day immediately preceding the Ex-Date for such distribution; and

 

C = the amount in cash per share the Company distributes to holders of Common Stock.

 

Such adjustment shall become effective immediately after the close of business on the Business Day prior to the Ex-Date for such dividend or distribution; provided that if the portion of the cash so distributed applicable to one share of the Common Stock is equal to or greater than SP0 as set forth above, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder of Notes shall receive on the date on which such cash dividend is distributed to holders of Common Stock, for each $1,000 principal amount of Notes, the amount of cash such 

 

31











 

holder would have received had such Holder owned a number of shares equal to the Conversion Rate on the Ex-Date for such distribution, without being required to convert the Notes. If such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

 

(e)        If the Company or any of its Subsidiaries make a payment in respect of a tender offer or exchange offer for the Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of Common Stock exceeds the Last Reported Sale Price of the Common Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (as it may be amended), the Conversion Rate shall be increased based on the following formula:

 



 

where,

 

CR1 = the Conversion Rate in effect immediately after the close of business on the Trading Day next succeeding the date such tender or exchange offer expires;

 

CR0 = the Conversion Rate in effect immediately prior to the close of business on the Trading Day next succeeding the date such tender or exchange offer expires;

 

AC = the aggregate value of all cash and any other consideration as determined by the Board of Directors paid or payable for shares purchased in such tender or exchange offer;

 

SP1 = the Last Reported Sale Price of Common Stock on the Trading Day next succeeding the date such tender or exchange offer expires;

 

OS1 = the number of shares of Common Stock outstanding immediately after the close of business on the Business Day prior to the date such tender or exchange offer expires (after giving effect to such tender offer or exchange offer); and

 

OS0 = the number of shares of Common Stock outstanding immediately prior to the close of business on the Business Day prior to the date such tender or exchange offer expires (prior to giving effect to such tender offer or exchange offer).

 

Such adjustment shall become effective immediately after the close of business on the Trading Day next succeeding the date such tender or exchange offer expires. If the Company or its Subsidiary is obligated to purchase shares of Common Stock pursuant to any such tender or exchange offer but is permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made.

 

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(f)         No adjustment to the Conversion Rate shall be made if the application of any of the foregoing formulas (other than in respect of a share combination) would result in a decrease in the Conversion Rate.

 

(g)        For purposes of this Section 5.06, the term “record date” shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of shareholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise).

 

(h)        For the avoidance of doubt, for purposes of subsections (a), (b), (c), (d) and (e) of this Section in the event of any reclassification of the Common Stock, as a result of which the Notes become convertible into more than one class of Common Stock, if an adjustment to the Conversion Rate is required pursuant to any of subsections (a), (b), (c), (d) or (e) references in those subsections to one share of Common Stock or Last Reported Sale Price of one share of Common Stock shall be deemed to refer to a unit or to the price of a unit consisting of the number of shares of each class of Common Stock into which the Notes are then convertible equal to the numbers of shares of such class issued in respect of one share of Common Stock in such reclassification. The above provisions of this paragraph shall similarly apply to successive reclassifications.

 

(i)         In addition to those required by subsections (a), (b), (c), (d) and (e) of this Section 5.06, and to the extent permitted by applicable law and the rules of the New York Stock Exchange or any other securities exchange or market in which the Common Stock is then listed, the Company in its sole discretion from time to time may increase the Conversion Rate by any amount for a period of at least 20 Business Days if the Board of Directors determines that such increase would be in the Company’s best interest. Whenever the Conversion Rate is increased pursuant to the preceding sentence, the Company shall mail to the Holder of each Note pursuant to Section 106 of the Original Indenture a notice of the increase at least 20 Business Days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect. In addition, the Company may also (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event.

 

(j)         Without limiting the foregoing, the Conversion Rate shall not be adjusted:

 

(i)            upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on securities of the Company and the investment of additional optional amounts in shares of Common Stock under any plan;

 

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(ii)           upon the issuance of any shares of Common Stock or options or rights to purchase those shares of Common Stock pursuant to any present or future employee, director or consultant benefit plan or program or stock purchase plan of or assumed by the Company or any of its Subsidiaries;

 

(iii)          upon the issuance of any shares of Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in clause (ii) above and outstanding as of the date of this Supplemental Indenture;

 

(iv)          for a change in the par value of the Common Stock; or

 

(v)           for accrued and unpaid Interest.

 

(k)        All calculations and other determinations under this Article 5 shall be made by the Company and shall be made to the nearest cent or to the nearest one-ten thousandth (1/10,000) of a share, as the case may be.

 

(l)         For purposes of this Section 5.06, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.

 

(m)       Whenever any provision of this Article 5 requires a calculation of Last Reported Sale Prices, Daily VWAPs, Daily Conversion Values or Daily Settlement Amounts over a span of multiple days (including an Observation Period and the period for determining the Stock Price for purposes of a Make-Whole Fundamental Change), the Company shall make appropriate adjustments (determined in good faith by the Board of Directors) to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Date of the event occurs, at any time during the period for which such calculation is to be calculated; provided that such adjustments shall only be made to the Daily Conversion Amounts relating to days prior to the date that the adjustment to the Conversion Rate becomes effective (it being understood that no such adjustment shall be made to the extent that a converting Holder is entitled to participate in the related transaction as a result of being treated as a stockholder of record of any shares issuable upon conversion of the related Notes pursuant to Section 5.04(f)).

 

(n)        If the effective date of any adjustment to the Conversion Rate occurs during an Observation Period for any Notes, then the Company shall make proportional adjustments to the Daily Share Amount for each VWAP Trading Day during the portion of the Observation Period preceding the date that such adjustment to the Conversion Rate becomes effective (it being understood that no such adjustment shall be made to the Daily Share Amount to the extent that a converting Holder is entitled to participate in the related transaction as a result of being treated as a stockholder of record of any shares issuable upon conversion of the related Notes pursuant to Section 5.04(f)).

 

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Section 5.07.  Notice of Adjustments of Conversion Rate.  Whenever the Conversion Rate is adjusted as herein provided:

 

(a)        the Company shall compute the adjusted Conversion Rate in accordance with Section 5.06 and shall prepare a certificate signed by the Chief Financial Officer of the Company setting forth the adjusted Conversion Rate and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall promptly be filed with the Trustee and with each Conversion Agent (if other than the Trustee); and

 

(b)        upon each such adjustment, a notice stating that the Conversion Rate has been adjusted and setting forth the adjusted Conversion Rate shall be required, such notice shall be provided by the Company to all Holders in accordance with Section 106 of the Original Indenture.

 

Neither the Trustee nor any Conversion Agent shall be under any duty or responsibility with respect to any such certificate or the information and calculations contained therein, except to exhibit the same to any Holder of Notes desiring inspection thereof at its office during normal business hours.

 

Section 5.08.  Company To Reserve Common Stock.  The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock, for the purpose of effecting the conversion of Notes, the full number of shares of Common Stock then issuable upon the conversion of all Outstanding Notes.

 

Section 5.09.  Taxes on Conversions.  Except as provided in the next sentence, the Company shall pay any and all documentary, stamp or similar issue or transfer taxes and duties that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of Notes pursuant hereto. The Company shall not, however, be required to pay any tax or duty that may be payable (i) in respect of income of the Holder, or (ii) because the Holder requests any shares to be issued and delivered in a name other than the Holder’s name, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Company the amount of any such tax or duty, or has established to the satisfaction of the Company that such tax or duty has been paid.  Nothing herein shall preclude any tax withholding required by law or regulations.

 

Section 5.10.  Certain Covenants.  Before taking any action which would cause an adjustment reducing the Conversion Rate below the then par value, if any, of the shares of Common Stock issuable upon conversion of the Notes, the Company shall take all corporate action which it reasonably determines may be necessary in order that the Company may validly and legally issue shares of such Common Stock at such adjusted Conversion Rate.

 

Section 5.11.  Cancellation of Converted Notes.  All Notes delivered for conversion shall be delivered to the Trustee or its agent and canceled by the Trustee as provided in Section 309 of the Original Indenture.

 

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Section 5.12.  Provision in Case of Effect of Reclassification, Consolidation, Merger or Sale.  (a)  In the event of:

 

(i)            any reclassification of the Common Stock,

 

(ii)           a consolidation, binding share exchange, recapitalization, reclassification, merger, combination or other similar event, or

 

(iii)          any sale or conveyance to another Person of all or substantially all of the property and assets of the Company (excluding a pledge of securities issued by any of the Company’s Subsidiaries but, for the avoidance of doubt, not excluding any foreclosure thereon),

 

in any case as a result of which holders of the outstanding Common Stock would be entitled to receive cash, securities or other property or assets for their shares of Common Stock (any such event, a “Merger Event”), then the Company or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture permitted under Section 10.01 providing for the conversion and settlement of the Notes as set forth in this Supplemental Indenture, subject to Section 5.04(b). Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 5 and the Trustee may conclusively rely on the determination by the Company of the equivalency of such adjustments. If, in the case of any Merger Event, the Reference Property includes shares of stock or other securities and assets of a company other than the successor or purchasing company, as the case may be, in such Merger Event, then such supplemental indenture shall also be executed by such other company and shall contain such additional provisions to protect the interests of the Holders of the Notes as the Board of Directors shall reasonably consider necessary by reason of the foregoing, including to the extent required by the Board of Directors and practicable the provisions providing for the repurchase rights set forth in Article 4.

 

In the event a supplemental indenture is executed pursuant to this Section 5.12, the Company shall promptly file with the Trustee an Officers’ Certificate briefly stating the reasons therefore, the kind or amount of cash, securities or property or assets that will constitute the Reference Property after any such Merger Event, any adjustment to be made with respect thereto and that all conditions precedent have been complied with, and shall promptly mail notice thereof to all Holders.

 

(b)        Notwithstanding the provisions of Section 5.04(a), and subject to the provisions of Section 5.01, at and after the effective time of such Merger Event, the right to convert each $1,000 principal amount of Notes shall be changed to a right to convert such principal amount of Notes by reference to the kind and amount of cash, securities or other property or assets that a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such Merger Event would have owned or been entitled to receive (the “Reference Property”) such that from and after the effective time of such Merger Event, a Holder shall be entitled thereafter to convert its Notes into cash up to the aggregate Principal Portion thereof and, in lieu 

 

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of the shares of Common Stock otherwise deliverable, units of Reference Property based on the Daily Conversion Amounts of such Reference Property and the applicable Conversion Rate, as described under Section 5.04(a). For purposes of determining the constitution of Reference Property, the type and amount of consideration that a holder of Common Stock would have been entitled to in the case of reclassifications, consolidations, mergers, sales or conveyance of assets or other transactions that cause the Common Stock to be converted into the right to receive more than a single type of consideration determined, based in part upon any form of stockholder election, shall be deemed to be (i) the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election or (ii) if no holders of Common Stock affirmatively make such an election, the types and amounts of consideration actually received by such holders. The Company shall not become a party to any such transaction unless its terms are consistent with the preceding. None of the foregoing provisions shall affect the right of a holder of Notes to convert its Notes in accordance with the provisions of this Article 5 prior to the effective date.

 

(c)        The Company shall cause notice of the execution of such supplemental indenture to be mailed to each Holder, at its address appearing on the Security Register provided for in the Indenture, within 20 calendar days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

 

(d)        The above provisions of this Section 5.12 shall similarly apply to successive Merger Events.

 

Section 5.13.  Responsibility of Trustee for Conversion Provisions.  The Trustee, subject to the provisions of Article Six of the Original Indenture, and any Conversion Agent shall not at any time be under any duty or responsibility to any Holder of Notes or to the Company to determine whether any facts exist which may require any adjustment of the Conversion Rate, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed, herein or in any supplemental indenture provided to be employed, in making the same, or whether a supplemental indenture need be entered into.  Neither the Trustee, subject to the provisions of Article Six of the Original Indenture, nor any Conversion Agent shall be accountable with respect to the validity or value (or the kind or amount) of any Common Stock, or of any other securities or property or cash, which may at any time be issued or delivered upon the conversion of any Notes; and it or they do not make any representation with respect thereto.  Neither the Trustee, subject to the provisions of Article Six of the Original Indenture, nor any Conversion Agent shall be responsible for any failure of the Company to make or calculate any cash payment or to issue, transfer or deliver any shares of Common Stock or share certificates or other securities or property or cash upon the surrender of any Note for the purpose of conversion; and the Trustee, subject to the provisions of Article Six of the Original Indenture, and any Conversion Agent shall not be responsible for any failure of the Company to comply with any of the covenants of the Company contained in this Article 5.

 

Section 5.14.  Notice to Holders Prior to Certain Actions.  Unless a notice has been provided under Section 5.01(b) or Section 5.01(c), as applicable, in case:

 

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(a)                        the Company shall declare a dividend (or any other distribution ) on its Common Stock that would require an adjustment in the Conversion Rate pursuant to Section 5.06;

 

(b)                       the Company shall authorize the granting to the holders of all or substantially all of its Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other rights or warrants that would require an adjustment in the Conversion Rate pursuant to Section 5.06;

 

(c)                        of any reclassification or reorganization of the Common Stock of the Company (other than a subdivision or combination of its outstanding Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value), or of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale, lease or transfer of all or substantially all of the assets of the Company; or

 

(d)                       of the voluntary or involuntary dissolution, liquidation or winding up of the Company or any of its Subsidiaries;

 

then, in each case, the Company shall cause to be filed with the Trustee and the Conversion Agent and to be mailed to each Holder at such Holder’s address appearing on the list of Holders provided for in Section 701 of the Original Indenture, as promptly as practicable but in any event at least 20 days prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such action by the Company or, if a record is not to be taken, the date as of such the holders of Common Stock of record are to be determined for the purposes of such action by the Company, or (y) the date on which such reclassification, consolidation, merger, sale, lease, transfer, dissolution, liquidation or winding up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, distribution, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up.

 

Section 5.15.  Stockholder Rights Plan.  Each share of Common Stock issued upon conversion of Notes pursuant to this Article 5 shall be entitled to receive the appropriate number of rights, if any, and the certificates representing the Common Stock issued upon such conversion shall bear such legends, if any, in each case as may be provided by the terms of any stockholder rights plan adopted by the Company, as the same may be amended from time to time.  If prior to any conversion, however, such rights have separated from the shares of Common Stock in accordance with the provisions of the applicable stockholder rights agreement, the Conversion Rate shall be adjusted at the time of separation as if the Company distributed to all holders of the Common Stock, shares of the Company’s Capital Stock, evidences of indebtedness, assets, property, rights or warrants as described in Section 5.06(c), subject to readjustment in the event of the expiration, termination or redemption of such rights.

 

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Section 5.16.  Company Determination Final.  Any determination that the Company or the Board of Directors must make pursuant to this Article 5 shall be conclusive if made in good faith, absent manifest error.

 

Section 5.17.  Exchange in Lieu of Conversion.  Notwithstanding anything herein to the contrary, when a Holder surrenders Notes for conversion, the Company may direct the Conversion Agent to surrender, prior to the commencement of the applicable Observation Period, such Notes to a financial institution designated by the Company for exchange in lieu of conversion.  In order to accept any Notes surrendered for conversion, the designated institution must agree to deliver to the Conversion Agent for delivery to such Holder, in exchange for such Notes to be delivered to such designated institution by the Conversion Agent, all cash and shares of Common Stock, if any, equal to the consideration otherwise due upon conversion, as provided under this Article 5 (assuming for this purpose and for the purpose of determining the related Observation Period that the date such Holder surrenders such Notes for conversion is the Conversion Date for such Notes), at the sole option of the designated institution and as is designated to the Conversion Agent by the Company.  By the close of business on the Trading Day immediately preceding the start of the Observation Period, the Company will notify the Holder surrendering Notes for conversion that it has directed the designated financial institution to make an exchange in lieu of conversion and such designated institution will be required to notify the Conversion Agent, who will then notify the Holder, whether it will deliver, upon exchange, all cash or a combination of cash and shares of Common Stock (by the Company’s specifying a Cash Percentage as provided under this Article 5).

 

If the designated institution accepts any such Notes, it will deliver cash and, if applicable, the appropriate number of shares of Common Stock to the Conversion Agent on the date such cash and shares of Common Stock, if any, would otherwise be due as set forth in this Article 5 and the Conversion Agent will promptly deliver the cash and those shares to Holders.  Any Notes exchanged by the designated institution will remain Outstanding.  If the designated institution agrees to accept any Notes for exchange but does not timely deliver the related consideration, or if such designated financial institution does not accept the Notes for exchange, the Company shall, no later than the third Business Day immediately following the last day of the related Observation Period, convert the Notes into cash and shares of Common Stock, if any, in accordance with this Article 5 (based on such assumed Conversion Date as described above and the specified Cash Percentage as described above).

 

The Company’s designation of an institution to which the Notes may be submitted for exchange does not require the institution to accept any Notes.  The Company will not pay any consideration to, or otherwise enter into any agreement with, the designated institution for or with respect to such designation.

 

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ARTICLE 6
  EVENTS OF DEFAULT; REMEDIES

 

Section 6.01.  Original Indenture.  This Article 6 replaces in its entirety the corresponding provisions set forth in Article Five of the Original Indenture.

 

Section 6.02.  Events of Default.

 

“Event of Default,” wherever used herein, means any one of the following events with respect to the Notes (whatever the reason for such Event of Default or whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(a)                        default in any payment of Interest (but excluding the Extension Fee, if any) on any Note when due and payable and the default continues for a period of 30 days; or

 

(b)                       default in the payment of principal of, or Extension Fee, if any, on, any Note when due and payable at its Stated Maturity Date, upon required repurchase, upon acceleration or otherwise; or

 

(c)                        failure by the Company to comply with its obligation to convert the Notes into cash and, if applicable, shares of Common Stock upon exercise of a Holder’s conversion right and that failure continues for five (5) days; or

 

(d)                       failure by the Company to comply with its obligations under Article 7; or

 

(e)                        default in the performance, or breach of any covenant or agreement by the Company under the Indenture (other than a covenant or agreement otherwise described as a separate “Event of Default” hereunder) and continuance of such default or breach by the Company for 60 days after written notice has been given, by registered or certified mail, to the Company from the Trustee or to the Company and the Trustee from the Holders of at least 25% principal amount of the Notes then Outstanding which written notice shall specify such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” under the Indenture; or

 

(f)                          failure by the Company to comply with its notice obligations under Sections 5.01(b) through (d) or under Section 4.01 when due; or

 

(g)                       default by the Company or any Subsidiary of the Company with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any debt for money borrowed in excess of $25 million in the aggregate of the Company and/or any such Subsidiary (other than Securitization Indebtedness), whether such debt now exists or shall hereafter be created, which default results (i) in such debt becoming or being declared due and payable and such debt has not been discharged in full or such declaration rescinded or annulled within 30 days of such declaration or (ii) from a failure to 

 

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pay the principal of any such debt when due and payable at its stated maturity or upon required repurchase and such defaulted payment shall not have been made, waived or extended within 30 days of such due date or required date of repurchase; provided, however, that clause (i) shall not apply to any indebtedness of any Subsidiary issued and outstanding prior to the date such Subsidiary became a Subsidiary of the Company (other than indebtedness issued in connection with, or in anticipation of, such Subsidiary becoming a Subsidiary of the Company) if such default arises solely as a result of a “change of control” provision applicable to such indebtedness which becomes operative as a result of the acquisition of such Subsidiary by the Company or any of its existing Subsidiaries; or

 

(h)                       failure by the Company or any of its Subsidiaries, within 60 days, to pay, bond or otherwise discharge any judgments or orders for the payment of money the total uninsured amount of which for the Company or any of its Subsidiaries exceeds $25 million, which are not stayed while on appeal; or

 

(i)                           the Company, pursuant to or within the meaning of any Bankruptcy Law shall (i) commence a voluntary case, (ii) consent to the entry of an order for relief against it in an involuntary case, (iii) consent to the appointment of any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law for it or all or substantially all of its property, or (iv) make a general assignment for the benefit of its creditors; or

 

(j)                           a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Company in an involuntary case, (ii) appoints any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law for the Company or for all or substantially all of its property, or (iii) orders the liquidation of the Company and the order or decree remains unstayed and in effect for 60 days.

 

Section 6.03.  Acceleration of Maturity; Rescission and Annulment.  If an Event of Default (other than an Event of Default specified in Section 6.02(i) or Section 6.02(j)) occurs and is continuing, then in every such case (except as provided in the immediately following paragraph) the Trustee or the Holders of at least 25% in principal amount of the Outstanding Notes may, and the Trustee at the request of such Holders shall, declare the principal of all such Notes to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holders), and upon any such declaration such principal shall become immediately due and payable. If an Event of Default specified in Section 6.02(i) or Section 6.02(j) with respect to the Company occurs, the principal of, and accrued and unpaid Interest, if any, on, all of the Notes shall become immediately due and payable without any declaration or other Act of the Holders or any act on the part of the Trustee.

 

At any time following an Event of Default and after such a declaration of acceleration has been made, the Holders of a majority in aggregate principal amount of the Outstanding Notes, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences (other than with respect to an Event of Default under Sections 6.02(a), 6.02(b), 6.02(c), 6.02(i) or 6.02(j)) if:

 

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(i)             such rescission and annulment will not conflict with any judgment or decree of a court of competent jurisdiction; and

 

(ii)          all Events of Default, other than the non-payment of the principal amount plus accrued and unpaid Interest on Notes that have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 6.13.

 

No such rescission shall affect any subsequent default or impair any right consequent thereon.

 

Notwithstanding the foregoing, at the election of the Company, the sole remedy for an Event of Default specified in Section 6.02(e) relating to the failure by the Company to comply with its obligations under Section 704 of the Original Indenture and Section 8.01 of this Supplemental Indenture or any filing obligation the Company shall have or be deemed to have pursuant to Section 314(a)(1) of the Trust Indenture Act relating to its failure to file any documents or reports that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act or the covenant set forth in Section 704 of the Original Indenture and Section 8.01 of this Supplemental Indenture, shall for the first 180 days after the occurrence of such an Event of Default consist exclusively of the right to receive an extension fee (“Extension Fee”) on the Notes at an annual rate equal to 0.5% of the principal amount of the Notes over such portion of the 180-day period during which time such Event of Default continues. If the Company so elects, such Extension Fee shall accrue on all Outstanding Notes from and including the date on which such Event of Default first occurs and shall be payable on each relevant Interest Payment Date to Holders of record on the Record Date immediately preceding that Interest Payment Date.  On the 181st calendar day after such Event of Default (if such violation is not cured or waived prior to such 181st calendar day), the Notes shall be subject to acceleration in accordance with the provisions of this Section 6.03 set forth above.  This paragraph and the two immediately succeeding paragraphs shall not affect the rights of Holders of Notes in the event of the occurrence of any other Event of Default.  In the event the Company does not elect to pay the Extension Fee upon an Event of Default in accordance with this paragraph, the Notes shall be subject to acceleration in accordance with the provisions of this Section 6.03 set forth above.

 

In order to elect to pay the Extension Fee as the sole remedy during the first 180 days after an Event of Default relating to the failure to comply with the reporting obligations in accordance with the immediately preceding paragraph, the Company must notify, in the manner provided for in Section 106 of the Original Indenture, all Holders of record of Notes and the Trustee and Paying Agent of such election on or before the close of business on the date on which such Event of Default occurs. Upon the Company’s failure to timely give such notice or pay the Extension Fee, the Notes shall be subject to acceleration in accordance with the provisions of this Section 6.03 set forth above.

 

If an Extension Fee is payable under this Section 6.03, the Company shall deliver to the Trustee a certificate to that effect stating that an Extension Fee is payable and the date upon which such Extension Fee shall begin to accrue. Unless and until a Responsible Officer of the

 

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Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that an Extension Fee is not payable. If an Extension Fee has been paid by the Company directly to the persons entitled to it, the Company shall deliver to the Trustee a certificate setting forth the particulars of such payment.

 

Section 6.04.  Collection of Indebtedness and Suits for Enforcement by Trustee.  The Company covenants that if a Default is made in the payment of the principal amount and accrued and unpaid Interest at the Stated Maturity Date or in the payment of the Fundamental Change Repurchase Price in respect of any Note, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Notes, the whole amount then due and payable on such Notes, and, in addition thereto, such further amounts required pursuant to Section 6.08.

 

If an Event of Default occurs and is continuing, the Trustee may, but shall not be obligated to, pursue any available remedy to collect the payment of the principal amount plus accrued but unpaid Interest on the Notes or to enforce the performance of any provision of the Notes or the Indenture.  The Trustee may maintain a proceeding even if the Trustee does not possess any of the Notes or does not produce any of the Notes in the proceeding.  A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of, or acquiescence in, the Event of Default.  No remedy is exclusive of any other remedy.  All available remedies are cumulative.

 

Section 6.05.  Trustee May File Proofs of Claim.  In case of any judicial proceeding relative to the Company (or any other obligor upon the Notes), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding.  In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee under Section 607 of the Original Indenture.

 

No provision of the Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

Section 6.06.  Application of Money Collected.  Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money to Holders, upon presentation of the Notes and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

 

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FIRST:  To the payment of all amounts due the Trustee under Section 607 of the Original Indenture;

 

SECOND:  To the payment of the amounts then due and unpaid on the Notes for the principal amount, Fundamental Change Repurchase Price or Interest, as the case may be, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Notes; and

 

THIRD:  To the payment of the remainder, if any, to the Company or as a court of competent jurisdiction shall direct in writing.

 

Section 6.07.  Limitation on Suits.  No Holder of any Note shall have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder (other than in the case of an Event of Default specified in Section 6.02(a), Section 6.02(b) or Section 6.02(d)), unless:

 

(i)                                     such Holder has previously given the Trustee notice that an Event of Default is continuing;

 

(ii)                                  Holders of at least 25% in aggregate principal amount of the Outstanding Notes shall have made written request to the Trustee to pursue such remedy in its own name as Trustee hereunder;

 

(iii)                               such Holder or Holders have offered the Trustee security or indemnity reasonably satisfactory to the Trustee against any loss, liability or expense to be incurred in compliance with such request;

 

(iv)                              the Trustee has not complied with such request within 60 days after its receipt of such notice and the offer of security or indemnity; and

 

(v)                                 the Holders of a majority principal amount of the Outstanding Notes have not given the Trustee a direction that is inconsistent with such request within such 60-day period;

 

it being understood and intended that no one or more Holders shall have any right in any manner whatever by virtue of, or by availing itself of, any provision of the Indenture to affect, disturb or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under the Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders.

 

Section 6.08.  Unconditional Right of Holders To Receive Payment.  Notwithstanding any other provision of the Indenture, the right of any Holder to receive payment of the principal amount, Fundamental Change Repurchase Price or accrued and unpaid Interest in respect of the Notes held by such Holder, on or after the respective due dates expressed in the Notes or any Fundamental Change Repurchase Date, as applicable, and to convert the Notes in accordance 

 

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with Article 5, or to bring suit for the enforcement of any such payment on or after such respective dates or the right to convert, shall not be impaired or affected adversely without the consent of such Holder.

 

Section 6.09.  Restoration of Rights and Remedies.  If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under the Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

 

Section 6.10.  Rights and Remedies Cumulative.  Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in Section 306 of the Original Indenture, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 6.11.  Delay or Omission Not Waiver.  No delay or omission of the Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.  Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

Section 6.12.  Control by Holders.  The Holders of a majority in principal amount of the Outstanding Notes shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee; provided that:

 

(i)                                     such direction shall not be in conflict with any rule of law or with the Indenture; and

 

(ii)                                  the Trustee may refuse to follow any such direction that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability.

 

Section 6.13.  Waiver of Past Defaults.  The Holders of not less than a majority in principal amount of the Outstanding Notes may on behalf of the Holders of all the Notes waive any past Default hereunder and its consequences, except a Default:

 

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(i)                                     described in Section 6.02(a), Section 6.02(b), Section 6.02(c), Section 6.02(i), or Section 6.02(j); or

 

(ii)                                  in respect of a covenant or provision hereof which under Article Nine of the Original Indenture, as supplemented by Article 10, cannot be modified or amended without the consent of the Holder of each Outstanding Note affected.

 

Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of the Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

 

Section 6.14.  Undertaking for Costs.  In any suit for the enforcement of any right or remedy under the Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, in either case in respect of the Notes, a court may require any party litigant in such suit to file an undertaking to pay the costs of the suit, and the court may assess reasonable costs, including reasonable attorney’s fees and expenses, against any party litigant in the suit having due regard to the merits and good faith of the claims or defenses made by the party litigant; but the provisions of this Section 6.14 shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Notes, or to any suit instituted by any Holder for the enforcement of the payment of the principal amount on any Note on or after the Stated Maturity Date of such Note or the Fundamental Change Repurchase Price.

 

Section 6.15.  Waiver of Stay or Extension Laws.  The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or Interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of the Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

Section 6.16.  Violations of Certain Covenants.  A violation of any covenant or agreement in the Indenture that expressly provides that a violation of such covenant or agreement shall not constitute an Event of Default may only be enforced by the Trustee by instituting a legal proceeding against the Company for enforcement of such covenant or agreement.

 

Section 6.17.  Company’s Failure to Convert.  For purposes of the first proviso to Section 602 of the Original Indenture, any failure by the Company to comply with its obligation to convert the Notes into cash and, if applicable, shares of Common Stock upon exercise of a Holder’s conversion right shall be deemed to be a default in the payment of the principal of such Notes.

 

46











 

ARTICLE 7
  CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

Section 7.01.  Original Indenture.  This Article 7 replaces in its entirety the corresponding provisions set forth in Article Eight of the Original Indenture.

 

Section 7.02.  Company May Consolidate, Etc., Only on Certain Terms.  The Company shall not consolidate with or merge with or into, transfer all or substantially all its assets (excluding a pledge of securities issued by any of the Company’s Subsidiaries) to, another Person, unless:

 

(a)                        the resulting, surviving or transferee person (the “Successor Company”) assumes by supplemental indenture all of the Company’s obligations under the Notes and the Indenture; provided, however, that in the event that the Successor Company in any merger, consolidation, or transfer is not organized and existing under the laws of the United States, any state thereof or the District of Columbia (any such merger, consolidation or transfer, a “Foreign Jurisdiction Transaction”), (i) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for U.S. Federal income tax purposes as a result of such transaction and will be subject to U.S. Federal income tax on the same amounts and at the same times as would have been the case if such transaction had not occurred; and (ii) the Company shall have delivered to the Trustee an Opinion of Counsel in the jurisdiction of the Successor Company to the effect that (A) any payment of Interest, principal, or any other payment or amount delivered under the Notes under or with respect to the Notes will, after giving effect to such transaction, be exempt from any withholding or deduction for or on account of any present or future tax, duty, levy, impost, assessment or other governmental charge of whatever nature imposed or levied by or on behalf of any jurisdiction from or through which payment is made or in which the payor is organized, resident or engaged in business for tax purposes and (B) no transfer taxes, stamp taxes, or taxes on income (including capital gains) will be payable by a Holder of Notes under the laws of any jurisdiction where the Successor Company is or becomes organized, resident or engaged in business for tax purposes in respect of the acquisition, ownership or disposition of the Notes, including the receipt of Interest or principal thereon, provided that such Holder does not use or hold, and is not deemed to use or hold the Notes in carrying on a business in the jurisdiction where the Successor Company is or becomes organized, resident or engaged in business for tax purposes; provided that the Holder will not be deemed to use or hold the Notes in carrying on a business in such jurisdiction solely as a result of the Holder’s ownership of the notes. Thereafter all such obligations of the Company or such other predecessor corporation shall be terminated. Upon any such consolidation, merger or transfer, the resulting, surviving or transferee person shall succeed to, and may exercise, every right and power of the Company under the Notes and under the Indenture;

 

(b)                       immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

47












 

(c)        the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with this Article 7; and

 

(d)        other than in connection with a Foreign Jurisdiction Transaction (to which the requirements of the proviso in clause (a) above shall apply), the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders or beneficial owners of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such transaction and will be subject to U.S. federal income tax in the same amount, in substantially the same manner and at the same times as would have been the case if the transaction had not occurred.

 

For purposes of the foregoing, the transfer (by assignment, sale or otherwise) of the properties and assets of one or more Subsidiaries (other than to the Company or another Subsidiary), which, if such assets were owned by the Company, would constitute all or substantially all of the properties and assets of the Company and its Subsidiaries, taken as a whole, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

 

The Successor Company formed by such consolidation or into which the Company is merged or the Successor Company to which such conveyance, transfer, lease or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture with the same effect as if such successor had been named as the Company herein; and thereafter, except in the case of a conveyance, transfer or lease of all or substantially all the Company’s assets (in which case the Company will not be discharged from the obligation to pay the principal amount of the Notes and Interest) and except for obligations, if any, that the Company may have under a supplemental indenture, the Company shall be discharged from all obligations and covenants under the Indenture and the Notes. Subject to Section 903 of the Original Indenture, the Company, the Trustee and the Successor Company shall enter into a supplemental indenture to evidence the succession and substitution of such Successor Company and such discharge and release of the Company.

 

ARTICLE 8
  REPORTS BY COMPANY

 

Section 8.01.  Reports by Company.

 

(a)        For purposes of the Notes, the reference to 30 days in Section 704 of the Original Indenture shall be revised to be 15 days.  Any information, documents or reports that the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same are required (giving effect to any grace period provided by Rule 12b-25) to be filed with the Commission. To the extent any such information, documents and reports are filed by the Company electronically on

 

48











 

the Commission’s Electronic Data Gathering and Retrieval System (or any successor system), and an automatic e-mail notification thereof to the Trustee is generated, such information, documents and reports shall be deemed filed with the Trustee.

 

(b)        Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely exclusively on an Officers’ Certificate).  It is expressly understood that materials transmitted electronically by the Company to the Trustee shall be deemed filed with the Trustee for purposes of this Section 8.01.

 

ARTICLE 9
  SATISFACTION AND DISCHARGE

 

Section 9.01.  Original Indenture.  This Article 9 replaces in its entirety the corresponding provisions set forth in Article Four of the Original Indenture.

 

Section 9.02.  Discharge of Indenture.  When (a) the Company shall deliver to the Trustee for cancellation all Notes theretofore authenticated (other than any Notes that have been destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) and not theretofore canceled, or (b) all the Notes not theretofore canceled or delivered to the Trustee for cancellation shall have become due and payable (whether at the Stated Maturity Date, or on any Fundamental Change Repurchase Date or upon conversion or otherwise) and the Company shall deposit with the Trustee, in trust, cash funds and shares of Common Stock, as applicable, sufficient to pay all amounts due (and shares of Common Stock deliverable following conversion, if applicable) on all of such Notes (other than any Notes that shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) not theretofore canceled or delivered to the Trustee for cancellation, including principal and Interest due, accompanied, except in the event the Notes are due and payable solely in cash upon a Fundamental Change Repurchase Date, by a verification report as to the sufficiency of the deposited amount from an independent certified accountant or other financial professional satisfactory to the Trustee, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then the Indenture shall cease to be of further effect (except as to (i) remaining rights of registration of transfer, substitution and exchange and conversion of Notes, (ii) rights hereunder of Holders to receive payments of principal of and Interest on, the Notes and the other rights, duties and obligations of Holders, as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee and (iii) the rights, obligations and immunities of the Trustee hereunder), and the Trustee, on written demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel as required by Section 102 or the Original Indenture and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of the Indenture.  The Company, however, hereby agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee

 

49











 

and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with the Indenture or the Notes.

 

Section 9.03.  Deposited Monies and Shares To Be Held in Trust by Trustee.  Subject to Section 9.04, all monies and shares of Common Stock, if any, deposited with the Trustee pursuant to Section 9.02 shall be held in trust for the sole benefit of the Holders, and such monies and shares of Common Stock, if any, shall be applied by the Trustee to the payment, either directly or through any paying agent (including the Company if acting as its own paying agent), to the Holders of the particular Notes for the payment or settlement of which such monies have been deposited with the Trustee, of all sums due and to become due thereon for principal and Interest.

 

Section 9.04.  Paying Agent To Repay Monies and Shares Held.  Upon the satisfaction and discharge of the Indenture, all monies and shares of Common Stock, if any, then held by any paying agent of the Notes (other than the Trustee) shall, upon written request of the Company, be repaid to it or paid to the Trustee, and thereupon such paying agent shall be released from all further liability with respect to such monies and shares of Common Stock, if any.

 

Subject to the requirements of applicable law, any monies and shares of Common Stock deposited with or paid to the Trustee for payment of the principal of or interest on or settlement of the Notes and not applied but remaining unclaimed by the Holders of the Notes for two years after the date upon which the principal of or interest on such Notes, as the case may be, shall have become due and payable, shall be repaid to the Company by the Trustee on demand and all liability of the Trustee shall thereupon cease with respect to such monies and shares of Common Stock; and the Holder of any of the Notes shall thereafter look only to the Company for any payment that such Holder may be entitled to collect unless an applicable abandoned property law designates another Person.

 

Section 9.05.  Reinstatement.  If the Trustee or the paying agent is unable to apply any money in accordance with Section 9.03 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under the Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 9.02 until such time as the Trustee or the paying agent is permitted to apply all such money in accordance with Section 9.03; provided, however, that if the Company makes any payment of Interest on or principal of any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or paying agent.

 

ARTICLE 10
  SUPPLEMENTAL INDENTURES

 

Section 10.01.  Supplemental Indentures Without Consent of Holders.  The Company and the Trustee, at any time and from time to time, may, without the consent of any Holder, enter

 

50











 

into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes in addition to the purposes set forth in Section 901 of the Original Indenture:

 

(i)            provide for the assumption by a Successor Company of the Company’s obligations under the Indenture;

 

(ii)           to provide for the conversion of the Notes in accordance with the terms of the Indenture;

 

(iii)          to provide for the conversion rights of Holders of Notes and the Company’s repurchase obligation in connection with a Fundamental Change in accordance with the terms of the Indenture in the event of any reclassification of the Common Stock, merger or consolidation, or sale, conveyance, transfer or lease of the Company’s property and assets substantially as an entirety;

 

(iv)          to comply with any requirements of the Commission in connection with the qualification of the indenture under the Trust Indenture Act; or

 

(v)           to make any change that does not adversely affect the rights of any Holder in any material respect; provided that any amendment to conform the terms of the Indenture or the Notes to the section entitled “Description of the Notes” as set forth in the preliminary prospectus supplement dated January 10, 2012, as supplemented by the pricing term sheet dated January 10, 2012, relating to the offering and sale of the Notes, will not be deemed to be adverse to any Holder.

 

For purposes of the Notes, clause (12) of Section 901 of the Original Indenture shall be deemed to be deleted in its entirety.

 

Section 10.02.  Supplemental Indentures with Consent of Holders.  Except as provided below in this Section 10.02 and in Section 10.01 and Section 901 and Section 902 of the Original Indenture, the Indenture or the Notes may be amended with the consent of the Holders of not less than a majority in principal amount of the Notes then Outstanding, including without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes, and, subject to certain exceptions as set forth in the Indenture, any past Default or compliance with any provisions may be waived with the consent of the Holders of a majority principal amount of the Notes then Outstanding, including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes.

 

Notwithstanding the immediately preceding paragraph or Section 902 of the Original Indenture, and in addition to any restrictions set forth in the proviso in Section 902 of the Original Indenture, without the written consent of each Holder of an Outstanding Note affected thereby, no amendment, supplement or waiver under Section 902 of the Original Indenture, as supplemented by this Section 10.02, may:

 

51











 

(i)            reduce the rate, or extend the stated time for payment, of Interest on any Note or reduce the amount, or extend the stated time for payment, of the Extension Fee;

 

(ii)           make any change that adversely affects the conversion rights of any Notes;

 

(iii)          reduce the Fundamental Change Repurchase Price of any Note or amend or modify in any manner adverse to the Holders of Notes the Company’s obligation to make such payments, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;

 

(iv)          change the place or currency of payment of principal or interest or any Extension Fee in respect of any Note;

 

(v)           impair the right of any Holder to receive payment of principal of and Interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes;

 

(vi)          adversely affect the ranking of the Notes as the Company’s senior unsecured indebtedness; or

 

(vii)         make any change in the amendment provisions which require each Holder’s consent or in the waiver provisions.

 

Section 10.03.   Notice to Holders of Supplemental Indentures.  The Company shall cause notice of the execution of any supplemental indenture to be mailed to each Holder, at his address appearing on the Security Register provided for in this Supplemental Indenture, within 20 days after execution thereof. Failure to deliver such notice, or any defect in such notes, shall not affect the legality or validity of such supplemental indenture.

 

ARTICLE 11
  MISCELLANEOUS

 

Section 11.01.  Provisions of Original Indenture Not Applicable.  Notwithstanding anything to the contrary in the Indenture, Section 312, Section 1005, Article Eleven, Article Twelve and Article Thirteen of the Original Indenture shall not apply with respect to the Notes.

 

Section 11.02.  Successors.  All agreements of the Company in this Supplemental Indenture and the Notes shall bind their respective successors.  All agreements of the Trustee in the Indenture shall bind its successors.

 

Section 11.03.  Multiple Originals.  The parties may sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  One signed copy is enough to prove this Supplemental Indenture.

 

52












 

Section 11.04.  Calculations.  Except as otherwise provided herein, the Company shall be responsible for making all calculations called for under the Indenture and the Notes. These calculations include, but are not limited to, determinations of the Last Reported Sale Prices, accrued Interest payable on the Notes or in connection with a conversion of Notes under the Indenture, and none of the Trustee, the Conversion Agent, the Security Registrar or the Paying Agent (in each case, if different from the Company) shall have any responsibility for making calculations, for determining amounts to be paid or for monitoring stock price, or be charged with any knowledge of or have any duties to monitor any measurement period (except as set forth herein) and the Conversion Rate of the Notes.  The Company shall make all these calculations in good faith and, absent manifest error, its calculations will be final and binding on Holders. The Company will provide a schedule of its calculations to each of the Trustee and the Conversion Agent, and each of the Trustee and Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The Trustee will forward a copy of such schedule to any Holder upon the request of such Holder.

 

Section 11.05.  Benefits of Supplemental Indenture.  Nothing in this Supplemental Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their respective successors hereunder and the Holders of Notes, any benefit or any legal or equitable right, remedy or claim under this Supplemental Indenture.

 

Section 11.06.  Governing Law.  THIS SUPPLEMENTAL INDENTURE AND EACH NOTE (AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS SUPPLEMENTAL INDENTURE AND EACH NOTE) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAWS OF THE STATE OF NEW YORK).

 

Section 11.07.  Waiver of Jury Trial.  EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

 

Section 11.08.  Force Majeure.  In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software or hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

53











 

[Remainder of the page intentionally left blank]

 

54











 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the day and year first above written.

 

	
 
    	
PHH   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mark E. Johnson
    
	
 
    	
Name:   Mark E. Johnson
    
	
 
    	
Title:   Senior Vice President and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Richard Tarnas
    
	
 
    	
Authorized   Signatory
    


 











 

SCHEDULE A

 

Make-Whole Table

 

The following table sets forth the number of Additional Shares to be added to the Conversion Rate per $1,000 principal amount of Notes pursuant to Section 5.02 of this Supplemental Indenture:

 

	
 
    	
 
    	
Stock price
    	
 
    
	
Effective date
    	
 
    	
$10.23
    	
 
    	
$12.00
    	
 
    	
$13.00
    	
 
    	
$14.00
    	
 
    	
$15.00
    	
 
    	
$17.50
    	
 
    	
$20.00
    	
 
    	
$25.00
    	
 
    	
$30.00
    	
 
    	
$40.00
    	
 
    	
$50.00
    	
 
    	
$75.00
    	
 
    
	
January 17,   2012
    	
 
    	
19.5503
    	
 
    	
17.3218
    	
 
    	
15.2081
    	
 
    	
13.4715
    	
 
    	
12.0242
    	
 
    	
9.2941
    	
 
    	
7.3934
    	
 
    	
4.9503
    	
 
    	
3.4701
    	
 
    	
1.8155
    	
 
    	
0.9647
    	
 
    	
0.1306
    	
 
    
	
June 15, 2012
    	
 
    	
19.5503
    	
 
    	
17.0986
    	
 
    	
14.9598
    	
 
    	
13.2115
    	
 
    	
11.7611
    	
 
    	
9.0448
    	
 
    	
7.1706
    	
 
    	
4.7829
    	
 
    	
3.3470
    	
 
    	
1.7483
    	
 
    	
0.9267
    	
 
    	
0.1184
    	
 
    
	
June 15, 2013
    	
 
    	
19.5503
    	
 
    	
16.4051
    	
 
    	
14.1944
    	
 
    	
12.4145
    	
 
    	
10.9594
    	
 
    	
8.2940
    	
 
    	
6.5062
    	
 
    	
4.2931
    	
 
    	
2.9933
    	
 
    	
1.5617
    	
 
    	
0.8256
    	
 
    	
0.0970
    	
 
    
	
June 15, 2014
    	
 
    	
19.5503
    	
 
    	
15.4009
    	
 
    	
13.0833
    	
 
    	
11.2577
    	
 
    	
9.7973
    	
 
    	
7.2137
    	
 
    	
5.5596
    	
 
    	
3.6090
    	
 
    	
2.5075
    	
 
    	
1.3117
    	
 
    	
0.6926
    	
 
    	
0.0707
    	
 
    
	
June 15, 2015
    	
 
    	
19.5503
    	
 
    	
13.8543
    	
 
    	
11.3838
    	
 
    	
9.5026
    	
 
    	
8.0503
    	
 
    	
5.6294
    	
 
    	
4.2045
    	
 
    	
2.6675
    	
 
    	
1.8561
    	
 
    	
0.9849
    	
 
    	
0.5213
    	
 
    	
0.0389
    	
 
    
	
June 15, 2016
    	
 
    	
19.5503
    	
 
    	
11.3316
    	
 
    	
8.5894
    	
 
    	
6.6403
    	
 
    	
5.2487
    	
 
    	
3.2307
    	
 
    	
2.2712
    	
 
    	
1.4266
    	
 
    	
1.0223
    	
 
    	
0.5674
    	
 
    	
0.3047
    	
 
    	
0.0060
    	
 
    
	
June 15, 2017
    	
 
    	
19.5503
    	
 
    	
5.1319
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    


 












 

EXHIBIT A

 

[FORM OF FACE OF SECURITY]

 

[INCLUDE IF A GLOBAL SECURITY]

 

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO, AND IS REGISTERED IN THE NAME OF THE DEPOSITORY OR A NOMINEE OF THE DEPOSITORY.  THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]

 

A-1











 

PHH CORPORATION

 

	
No.
    	
Initially   $[          ]
    


 

6.00% Convertible Senior Note due 2017

 

	
CUSIP No.:
    	
 
    	
[              ]
    
	
ISIN Number:
    	
 
    	
[              ]
    


 

PHH CORPORATION, a Maryland corporation, promises to pay to [CEDE & CO., or its registered assigns](1), the principal sum of                  DOLLARS, [as revised by the Schedule of Increases or Decreases in Global Security attached hereto,](2) on June 15, 2017.

 

Interest Payment Dates:  June 15 and December 15.

 

Interest Record Dates:  June 1 and December 1.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, including, without limitation, provisions giving the Holder of this Note the right to convert this Note into cash and, if applicable, Common Stock, on the terms and subject to the limitations referred to on the reverse hereof and as more fully specified in the Indenture.  Such further provisions shall for all purposes have the same effect as though fully set forth at this place.

 

In the case of any conflict between this Note and the Indenture, the provisions of the Indenture shall control.

 

This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by the Trustee or a duly authorized authenticating agent under the Indenture.

 




(1)  Use bracketed language for a Global Security.

 

(2)  Use bracketed language for a Global Security.

 

A-2











 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.

 

	
 
    	
PHH CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    


 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated herein issued under the within-mentioned Indenture.

 

	
THE   BANK OF NEW YORK MELLON
    	
 
    
	
TRUST   COMPANY, N.A., as Trustee
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Authorized   Signatory
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    
				


 

A-3











 

[FORM OF REVERSE OF NOTE]

 

PHH CORPORATION
  6.00% Convertible Senior Note due 2017

 

1.             Interest

 

PHH CORPORATION, a Maryland corporation (such corporation, and its successors and assigns under the Indenture, the “Company”), promises to pay interest on the principal amount of this Note at the rate of 6.00% per annum.  The Company will pay interest semiannually on June 15 and December 15 of each year, commencing on June 15, 2012.  Interest on this Note will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from January 17, 2012.  Interest will be computed on the basis of a 360-day year of twelve 30-day months.  If a payment date is not a Business Day, payment will be made on the next succeeding Business Day, and no additional interest will accrue in respect of the delay.  The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the rate of interest then in effect; and it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful.

 

2.             Paying Agent, Security Registrar and Conversion Agent

 

Initially, The Bank of New York Mellon Trust Company, N.A., a New York banking corporation (the “Trustee”), will act as Paying Agent, Security Registrar and Conversion Agent.  The Company may appoint and change any Paying Agent, Security Registrar or co-registrar or Conversion Agent without notice.  The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Security Registrar or co-registrar, or Conversion Agent.

 

3.             Indenture

 

The Company issued the Notes under an Indenture dated as of January 17, 2012 (the “Original Indenture”) and as further supplemented by the First Supplemental Indenture dated as of January 17, 2012 (the “Supplemental Indenture” and the Original Indenture, as supplemented by the First Supplemental Indenture, the “Indenture”) between the Company and the Trustee.  Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture.  The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of those terms.

 

This Note is one of the Securities of the Company, designated as its 6.00% Convertible Senior Notes due 2017, issued pursuant to the Indenture in an initial aggregate principal amount of $250,000,000.  Additional Notes may be issued in accordance with the terms of the Indenture.  The Indenture also imposes limitations on the ability of the Company to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of the property of the Company.

 

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4.             Conversion

 

Upon the occurrence of certain events specified in the Indenture and in compliance with the provisions of the Indenture, at any time prior to the close of business on the third Scheduled Trading Day immediately preceding the Stated Maturity Date of this Note, the Holder hereof has the right, at its option, to convert each $1,000 principal amount of this Note into a cash and, if applicable, shares of Common Stock, determined as set forth in the Indenture, based on the applicable Conversion Rate, as the same may be adjusted pursuant to the terms of the Indenture.

 

5.             Denominations, Transfer, Exchange

 

The Notes are in registered form without coupons in denominations of $1,000 and whole multiples of $1,000.  A Holder may transfer or exchange Notes in accordance with the terms of the Indenture.  Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture.

 

6.             Persons Deemed Owners

 

The registered Holder of this Note may be treated as the owner of it for all purposes.

 

7.             Defaults and Remedies

 

If an Event of Default (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company or relating to the failure to file certain reports subject to the provisions of the Indenture) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Outstanding Notes may declare the principal of and accrued and unpaid Interest on all the Notes to be due and payable.  If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of and Interest on all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.  Notwithstanding the foregoing, at the election of the Company, the sole remedy for an Event of Default relating to a failure to file certain reports with the Commission and the Trustee shall for the first 180 calendar days after such Event of Default consist exclusively of the right to receive an Extension Fee.

 

8.             No Recourse Against Others

 

A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Notes or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation.  By accepting a Note, each Holder waives and releases all such liability.  The waiver and release are part of the consideration for the issue of the Notes.

 

9.             Authentication

 

This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note.

 

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10.                                 Abbreviations

 

Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

 

11.                                 GOVERNING LAW

 

THIS NOTE (AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS NOTE) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAWS OF THE STATE OF NEW YORK).

 

12.                                 CUSIP and ISIN Numbers

 

The Company has caused CUSIP and ISIN numbers to be printed on the Notes and the Trustee shall use the CUSIP number(s) and ISIN numbers in notices of redemption or exchange as a convenience to Holders, provided, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP and ISIN number(s) printed in the notice or on the Notes, and that reliance may be placed only on the other identification numbers printed on the Notes, and that any such redemption or exchange shall not be affected by any defect in or omission of any such numbers.

 

The Company will furnish to any Holder of Notes upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Note.

 

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SCHEDULE OF INCREASES AND DECREASES IN GLOBAL SECURITY(3)

 

The following increases or decreases in this Global Security have been made:

 

	
Date of
   Exchange
    	
 
    	
Amount of decrease in
   principal amount of this
   Global Security
    	
 
    	
Amount of increase in
   principal amount of this
   Global Security
    	
 
    	
Principal amount of this
   Global Security
   following such decrease
   or increase
    	
 
    	
Signature of
   authorized
   signatory of
   Trustee or
   Custodian
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    


 




(3)  For Global Securities only.

 

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[FORM OF CONVERSION NOTICE]

 

To:  PHH Corporation

 

The undersigned registered owner of this Note hereby irrevocably exercises the option to convert this Note, or the portion thereof (which is $1,000 or a multiple thereof) below designated, into, cash and shares of Common Stock of PHH Corporation, if any, in accordance with the terms of the Indenture referred to in this Note, and directs that the check in payment for cash and the shares, if any, issuable and deliverable upon such conversion, together with any check in payment for fraction shares and any Notes representing any unconverted principal amount hereof, be issued and delivered to the registered Holder hereof unless a different name has been indicated below.

 

If shares or any portion of this Note not converted are to be issued in the name of a Person other than the undersigned, the undersigned will provide the appropriate information below and pay all transfer taxes payable with respect thereto.  In addition, subject to certain exceptions in the Indenture, if this notice is being delivered on a date after the close of business on a Record Date and prior to the open of business on the related Interest Payment Date, this notice is accompanied by payment of an amount equal to the Interest payable on such Interest Payment Date of the principal of this Note to be converted.

 

Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Signature(s)
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Signature(s) must   be guaranteed by an “eligible guarantor institution” meeting the requirements   of the Registrar, which requirements include membership or participation in   the Security Transfer Agent Medallion Program (“STAMP”) or such other   “signature guarantee program” as may be determined by the Registrar in   addition to, or in substitution for, STAMP, all in accordance with the   Securities Exchange Act of 1934, as amended.

 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Signature   Guarantee
    


 

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Fill in the registration of shares of Common Stock, if any, if to be issued, and Notes, if any, to be delivered, and the person to whom cash, if any, and payment for fractional shares, if any, is to be made, if other than to and in the name of the registered Holder:

 

Please print name and address

 

 

	
 
    	
 
    
	
(Name)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(Street   Address)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
(City,   State and Zip Code)
    	
 
    


 

Principal amount to be converted
 (if less than all, must be $1,000 or whole multiples thereof):

 

$

 

Social Security or Other Taxpayer
 Identification Number:

 

NOTICE:  The signature on this Conversion Notice must correspond with the name as written upon the face of the Notes in every particular without alteration or enlargement or any change whatever.

 

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[FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]

 

To: PHH Corporation

 

The undersigned registered owner of this Note hereby acknowledges receipt of a notice from PHH Corporation (the “Company”) as to the occurrence of a Fundamental Change with respect to the Company and specifying the Fundamental Change Repurchase Date and requests and instructs the Company to repay to the registered holder hereof in accordance with the applicable provisions of the Indenture referred to in this Note (1) the entire principal amount of this Note, or the portion thereof (that is $1,000 principal amount or an integral multiple thereof) below designated, and (2) if such Fundamental Change Repurchase Date does not fall during the period after a Record Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date, accrued and unpaid Interest thereon to, but excluding, such Fundamental Change Repurchase Date.

 

In the case of Physical Securities, the certificate numbers of the Notes to be repurchased are as set forth below:

 

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Signature(s)
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Social   Security or Other Taxpayer Identification Number
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
principal   amount to be repaid (if less than all):    $            ,000

 

NOTICE:  The signature on the Fundamental Change   Repurchase Notice must correspond with the name as written upon the face of   the Note in every particular without alteration or enlargement or any change   whatever.
    
					


 

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[FORM OF ASSIGNMENT AND TRANSFER]

 

For value received                                                          hereby sell(s), assign(s) and transfer(s) unto                                    (Please insert social security or Taxpayer Identification Number of assignee) the within Note, and hereby irrevocably constitutes and appoints                                             attorney to transfer the said Note on the books of the Company, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Signature(s)
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Signature(s) must   be guaranteed by an institution which is a member of one of the following   recognized signature Guarantee Programs:

 

(i) The   Securities Transfer Agent Medallion Program (STAMP); (ii) The New York   Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange   Medallion Program (SEMP) or (iv) another guarantee program acceptable to   the Trustee.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Signature Guarantee
    


 

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