exv4w2






Exhibit 4.2




AVATAR HOLDINGS INC.,




As Issuer



WILMINGTON TRUST FSB,



As Trustee



FIRST SUPPLEMENTAL INDENTURE



Dated as of February 4, 2011



to the



INDENTURE



Dated as of February 4, 2011



7.50% SENIOR CONVERTIBLE NOTES DUE 2016


















 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE I: DEFINITIONS	 	 	2	 
	Section 1.01
	 	Relation to Base Indenture	 	 	2	 
	Section 1.02
	 	Definitions	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE II: ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES	 	 	9	 
	Section 2.01
	 	Designation and Amount	 	 	9	 
	Section 2.02
	 	Form of Notes	 	 	9	 
	Section 2.03
	 	Date and Denomination of Notes; Payments of Interest	 	 	10	 
	Section 2.04
	 	Global Notes	 	 	11	 
	Section 2.05
	 	Additional Notes; Repurchases	 	 	11	 
	Section 2.06
	 	No Sinking Fund	 	 	11	 
	Section 2.07
	 	Ranking	 	 	11	 
	Section 2.08
	 	Discharge and Defeasance	 	 	11	 
	 
	 	 	 	 	 	 
	ARTICLE III: REDEMPTION	 	 	11	 
	Section 3.01
	 	Redemption Right	 	 	11	 
	Section 3.02
	 	Redemption Price	 	 	13	 
	Section 3.03
	 	Selection of Notes to be Redeemed	 	 	13	 
	Section 3.04
	 	Redemption Notice	 	 	14	 
	Section 3.05
	 	Payment of Notes Called for Redemption	 	 	15	 
	Section 3.06
	 	Officer’s Certificate to Trustee	 	 	16	 
	 
	 	 	 	 	 	 
	ARTICLE IV: PARTICULAR COVENANTS OF THE COMPANY	 	 	16	 
	Section 4.01
	 	Payment of Principal and Interest	 	 	16	 
	Section 4.02
	 	Maintenance of Office or Agency for Conversion Agent	 	 	17	 
	Section 4.03
	 	Reports by Company	 	 	17	 
	Section 4.04
	 	Financial Covenants	 	 	18	 
	 
	 	 	 	 	 	 
	ARTICLE V: DEFAULTS AND REMEDIES	 	 	18	 
	Section 5.01
	 	Events of Default	 	 	18	 
	Section 5.02
	 	Recission of Acceleration	 	 	20	 
	Section 5.03
	 	Additional Interest	 	 	20	 
	Section 5.04
	 	Waiver of Past Defaults	 	 	20	 
	 
	 	 	 	 	 	 
	ARTICLE VI: SUPPLEMENTAL INDENTURES	 	 	21	 
	Section 6.01
	 	Supplemental Indentures Without Consent of Noteholders	 	 	21	 
	Section 6.02
	 	Modification and Amendment with Consent of Noteholders	 	 	22	 
	Section 6.03
	 	Effect of Supplemental Indentures	 	 	22	 
	Section 6.04
	 	Article Seven of the Base Indenture	 	 	22	 
	 
	 	 	 	 	 	 
	ARTICLE VII: CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE	 	 	23	 
	Section 7.01
	 	Consolidation, Merger, and Sale of Assets	 	 	23	 






i









 






	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE VIII: CONVERSION OF NOTES	 	 	23	 
	Section 8.01
	 	Conversion Rights	 	 	23	 
	Section 8.02
	 	Conversion Procedures	 	 	25	 
	Section 8.03
	 	Payments Upon Conversion	 	 	26	 
	Section 8.04
	 	Adjustment of Conversion Rate	 	 	27	 
	Section 8.05
	 	Shares to be Fully Paid	 	 	34	 
	Section 8.06
	 	Effect of Reclassification, Consolidation, Merger or Sale	 	 	34	 
	Section 8.07
	 	Voluntary Increases of Conversion Rate	 	 	35	 
	Section 8.08
	 	Notice to Holders Prior to Certain Actions	 	 	35	 
	Section 8.09
	 	Shareholder Rights Plans	 	 	36	 
	 
	 	 	 	 	 	 
	ARTICLE IX: REPURCHASE OF NOTES AT OPTION OF HOLDERS	 	 	36	 
	Section 9.01
	 	Repurchase Right of Holders Upon Breach of Certain Financial Covenants	 	 	36	 
	Section 9.02
	 	Repurchase Right of Holders On Specified Date	 	 	38	 
	Section 9.03
	 	Repurchase Right of Holders Upon a Fundamental Change	 	 	39	 
	Section 9.04
	 	Procedures Upon Exercise of a Repurchase Right	 	 	40	 
	Section 9.05
	 	No Payment Following Acceleration of the Notes	 	 	43	 
	Section 9.06
	 	Compliance with Tender Offer Rules	 	 	43	 
	 
	ARTICLE X: MISCELLANEOUS PROVISIONS
	 	 	44	 
	Section 10.01
	 	Ratification of Base Indenture	 	 	44	 
	Section 10.02
	 	Governing Law	 	 	44	 
	Section 10.03
	 	Counterparts	 	 	44	 
	Section 10.04
	 	Calculations	 	 	44	 
	Section 10.05
	 	Non-Business Day	 	 	44	 






Schedule A — Additional Shares




	 	 	 

	Exhibit A — Form of Global Note

	 	 
	Exhibit B — Form of Conversion Notice
	 	 
	Exhibit C — Form of Covenant Breach Repurchase Notice
	 	 
	Exhibit D — Form of Specified Date Repurchase Notice
	 	 
	Exhibit E — Form of Fundamental Change Repurchase Notice
	 	 
	Exhibit F — Form of Assignment and Transfer
	 	 







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FIRST SUPPLEMENTAL INDENTURE




7.50% Senior Convertible Notes due 2016



     THIS FIRST SUPPLEMENTAL INDENTURE, dated as of February 4, 2011 (this “Supplemental
Indenture”), by and between AVATAR HOLDINGS INC., a Delaware Corporation (the “Company”), and
WILMINGTON TRUST FSB, a federal savings bank, as Trustee hereunder (the “Trustee”).



RECITALS OF THE COMPANY:




     WHEREAS, the Company and the Trustee have heretofore entered into an Indenture dated as of
February 4, 2011 (the “Base Indenture” and, together with this Supplemental Indenture, the
“Indenture”) providing for the issuance by the Company from time to time of its debt securities
evidencing its unsecured indebtedness, in an unlimited aggregate principal amount, in one or more
series (collectively, the “Securities” and each, a “Security”);



     WHEREAS, Section 7.01(g) of the Base Indenture provides for the Company and the Trustee to
enter into an indenture supplemental to the Base Indenture to establish the form and terms of
Securities of any series as provided by Article 2 of the Base Indenture, without the consent of the
Holders of any Securities;



     WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issuance of
its 7.50% Senior Convertible Notes due 2016 (the “Notes”), initially in an aggregate principal
amount not to exceed $100,000,000;



     WHEREAS, in order to provide the terms and conditions upon which the Notes are to be
authenticated, issued and delivered, the Board of Directors of the Company has duly authorized the
execution and delivery of this Supplemental Indenture;



     WHEREAS, the Notes, including the certificate of authentication to be borne by the Notes, the
conversion notice, the covenant breach repurchase notice, the specified date repurchase notice, the
fundamental change repurchase notice and the certificate of assignment and transfer are to be
substantially in the forms attached as exhibits hereto;



     WHEREAS, all acts and things necessary to make this Supplemental Indenture a valid agreement
of each of the Company and the Trustee according to its terms have been done and performed; and



     WHEREAS, all acts and things necessary to make the Notes, when executed by the Company and
authenticated and delivered by the Trustee as provided in the Indenture and this Supplemental
Indenture, the valid and binding obligations of the Company have been done and performed.



NOW THEREFORE, SUPPLEMENTAL INDENTURE WITNESSETH:




     For and in consideration of the premises and of the covenants contained herein and in the Base
Indenture, the Company and the Trustee covenant and agree, for the equal and






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proportionate benefit of all Holders of the Notes issued on or after the date of this
Supplemental Indenture, as follows:




ARTICLE I:




DEFINITIONS



     Section 1.01 Relation to Base Indenture. The changes, modifications and supplements
to the Base Indenture effected by this Supplemental Indenture shall be applicable only with respect
to, and shall only govern the terms of, the Notes, which may be issued from time to time, and shall
not apply to any other Securities that may be issued under the Base 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 supersede any
corresponding or conflicting provisions and definitions in the Base Indenture.



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




     (a) Capitalized terms used but not defined herein shall have the respective meanings
assigned to them in the Base Indenture;




     (b) Terms defined both herein and in the Base Indenture shall have the meanings assigned
to them herein;




     (c) All references herein to Articles and Sections, unless otherwise specified, refer to
the corresponding Articles and Sections of this Supplemental Indenture; and




     (d) All other terms used in this Supplemental Indenture, which are defined in the Trust
Indenture Act or which are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires) shall have the
meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in
force at the date of the execution of this Supplemental Indenture. The words “herein,”
“hereof,” “hereunder,” and words of similar import refer to this Supplemental Indenture as a
whole and not to any particular Article, Section or other subdivision. The terms defined in
this Article include the plural as well as the singular.



     “4.50% Notes” shall mean the 4.50% Convertible Senior Notes due 2024 issued pursuant to the
Indenture, dated as of March 30, 2004, between the Company, as issuer, and JPMorgan Chase Bank, as
trustee.



     “Additional Interest” shall have the meaning specified in Section 5.03.



     “Additional Notes” shall have the meaning specified in Section 2.05.



     “Additional Shares” shall have the meaning specified in Section 8.01(b)(i).



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     “Base Indenture” shall have the meaning specified in the first paragraph of the recitals of
this Supplemental Indenture.



     “Cash and Cash Equivalents” means, for purposes of Section 4.04 hereof: (i) United States
dollars; (ii) securities issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities of not more than twelve
months from the date of acquisition; (iii) readily marketable direct obligations issued by any
state of the United States of America or any political subdivision thereof having one of the two
highest ratings obtainable from either Moody’s or Standard & Poor’s with maturities of 12 months or
less from the date of acquisition; (iv) certificates of deposit and Eurodollar time deposits with
maturities of twelve months or less from the date of acquisition, bankers’ acceptances with
maturities not exceeding one year and overnight bank deposits, in each case, with any domestic
commercial bank having combined capital and surplus in excess of $500 million and a Thomson Bank
Watch Rating at the time of acquisition of “B” or better; (v) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in clauses (ii) and (iv)
above entered into with any financial institution meeting the qualifications specified in clause
(iv) above; (vi) commercial paper having one of the two highest ratings obtainable from Moody’s
Investors Service, Inc. or Standard & Poor’s Rating Services and in each case maturing within six
months after the date of acquisition; and (vii) money market or mutual funds at least 90% of the
assets of which constitute cash equivalents of the kinds described in clauses (i) through (vi) of
this definition.



     “Close of Business” means 5:00 p.m. (New York City time).



     “Common Stock” means, subject to Section 8.06, shares of common stock of the Company, par
value $1.00 per share, at the date of this Supplemental Indenture or shares of any class or classes
resulting from any reclassification or reclassifications thereof and that have no preference in
respect of dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and that are not subject to redemption by the
Company; provided that if at any time there shall be more than one such resulting class, the shares
of each such class then so issuable shall be substantially in the proportion which the total number
of shares of such class resulting from all such reclassifications bears to the total number of
shares of all such classes resulting from all such reclassifications.



     “Company” means Avatar Holdings Inc., a Delaware corporation, unless and until a successor
corporation shall have become such pursuant to the applicable provisions of this Indenture, and
thereafter “Company” shall mean such successor corporation.



     “Continuing Directors” means, as of any date of determination, any member of the Board of
Directors who:




     (a) was a member of the Board of Directors on the date of this Supplemental Indenture;
or



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     (b) was nominated for election or elected to the Board of Directors with the approval
of a majority of the Continuing Directors who were members of the Board of Directors at the
time of the new director’s nomination or election.



     “Conversion Agent” shall mean the Trustee or any successor office or agency where the Notes
may be surrendered for conversion.



     “Conversion Date” shall have the meaning specified in Section 8.02(b).



     “Conversion Notice” shall have the meaning specified in Section 8.02(b).



     “Conversion Obligation” shall have the meaning specified in Section 8.01(a).



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



     “Conversion Rate” shall have the meaning specified in Section 8.01(a).



     “Corporate Trust Office” means an office of the Trustee at which at any time its corporate
trust business shall be administered, which office at the date hereof is located at Guilford,
Connecticut, 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).



     “Covenant Breach Company Notice” shall have the meaning specified in Section 9.01(b).



     “Covenant Breach Repurchase Date” shall have the meaning specified in Section 9.01(a).



     “Covenant Breach Repurchase Price” shall have the meaning specified in Section 9.01(a).



     “Depositary” means, with respect to the Notes issuable or issued in whole or in part in global
form, the Person specified in the Base Indenture as the Depositary with respect to such Notes,
until a successor shall have been appointed and become such pursuant to the applicable provisions
of this Supplemental Indenture, and thereafter, “Depositary” shall mean or include such successor.



     “Distributed Property” shall have the meaning specified in Section 8.04(c).



     “Effective Date” shall have the meaning specified in Section 8.01(b)(ii).



     “Eligible Market” shall have the meaning specified in Section 3.01(b).



     “Equity Conditions” shall have the meaning specified in Section 3.01(b).



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     “Equity Conditions Measuring Period” shall have the meaning specified in Section 3.01(b).



     “Event of Default” means, with respect to the Notes, any event specified in Section 5.01,
continued for the period of time, if any, and after the giving of notice, if any, therein
designated.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.



     “Filing Failure” shall have the meaning specified in Section 5.03.



     “Fundamental Change” will be deemed to have occurred when any of the following has occurred:




     (a) the consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any “person” becomes the “beneficial owner” (as
these terms are defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly, of more than 50% of the Capital Stock of the Company that is at that time
entitled to vote by the holder thereof in the election of the Board of Directors (or
comparable body); or




     (b) the first day on which a majority of the members of the Board of Directors are not
Continuing Directors; or




     (c) the adoption of a plan relating to the liquidation or dissolution of the Company;
or




     (d) the consolidation or merger of the Company with or into any other Person, or the
sale, lease, transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all of the assets of the Company and those of its
Subsidiaries taken as a whole to any “person” (as this term is used in Section 13(d)(3) of
the Exchange Act), other than:




     (i) any transaction (x) that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Capital Stock of the
Company; and (y) pursuant to which the holders of 50% or more of the total voting
power of all shares of Capital Stock of the Company entitled to vote generally in
elections of directors immediately prior to such transaction have the right to
exercise, directly or indirectly, 50% or more of the total voting
power of all shares of Capital Stock of the Company entitled to vote generally in elections of
directors of the continuing or surviving Person immediately after giving effect to
such transaction; or




     (ii) any merger primarily for the purpose of changing the jurisdiction of
incorporation of the Company and resulting in a reclassification, conversion or
exchange of outstanding shares of Common Stock solely into shares of common stock of
the surviving entity.



5









 






     (e) the termination of trading of the Company’s Common Stock, which will be deemed to
have occurred if the Common Stock or other common stock into which the Notes are convertible
is neither listed for trading on a United States national securities exchange nor approved
for listing on any United States system of automated dissemination of quotations of
securities prices.



     Notwithstanding the foregoing, any transaction or event described above will not constitute a
Fundamental Change if, in connection with such transaction or event, or as a result therefrom, a
transaction described in clauses (a), (d) or (e) above occurs (without regard to any exclusion in
clause (d) thereunder) and at least 90% of the consideration paid for Common Stock (excluding cash
payments for fractional shares, cash payments made pursuant to dissenters’ appraisal rights and
cash dividends) consists of shares of common stock (or depositary receipts in respect thereof)
traded on any of the New York Stock Exchange, the Nasdaq Global Market or the Nasdaq Global Select
Market (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 such transaction, the Notes become convertible into Reference Property in accordance with
Section 8.04 and Section 8.06 hereof.



     “Fundamental Change Company Notice” shall have the meaning specified in Section 9.03(b).



     “Fundamental Change Repurchase Date” shall have the meaning specified in Section 9.03(a).



     “Fundamental Change Repurchase Price” shall have the meaning specified in Section 9.03(a).



     “GAAP” means United States generally accepted accounting principles, consistently applied.



     “Global Note” shall have the meaning specified in Section 2.04.



     “Indebtedness” of any Person means, without duplication, for purposes of Section 4.04 hereof,
(i) all indebtedness for borrowed money, secured or unsecured, (ii) all obligations issued,
undertaken or assumed as the deferred purchase price of property or services, including (without
limitation) capital leases in accordance with GAAP (other than accrued expenses, trade payables,
customer deposits and deferred revenues, in each case, entered into in the ordinary course of
business and earn-out obligations owed to sellers in connection with the acquisition of
properties), (iii) all reimbursement or payment obligations with respect to letters of credit,
surety bonds and other similar instruments (other than reimbursement or payment obligations with
respect to letters of credit, surety bonds and other similar instruments that are secured by a cash
escrow or that are made in the ordinary course of the development business, in each case only to
the extent such payment obligations would not appear as a liability on a balance sheet of such
Person in accordance with GAAP), (iv) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (v) all indebtedness created or arising under any conditional
sale or other title retention agreement, or incurred as financing, in either case with



6









 




respect to any property or assets acquired with the proceeds of such indebtedness (other than
estimated development liability for sold land), (vi) all indebtedness referred to in clauses (i)
through (v) above secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest or
other encumbrance upon or in any property or assets (including accounts and contract rights) owned
by such Person, even though the Person that owns such assets or property has not assumed or become
liable for the payment of such indebtedness, (vii) all contingent obligations (whether as obligor,
guarantor or otherwise) in respect of indebtedness of others of the kinds referred to in clauses
(i) through (vi) above; provided, however, that the following shall not be deemed
to constitute Indebtedness for purposes of this definition: (a) the accrual of interest, the
accretion of original issue discount (in each case, whether as the issuance of pay-in-kind
securities or otherwise) and imputed interest, cost or premiums and (b) any non-recourse
indebtedness.




     “Indenture” shall have the meaning specified in the first paragraph of the recitals of this
Supplemental Indenture.



     “Initial Notes” means the Notes issued on the date of this Supplemental Indenture.



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



     “Interest Payment Date” means February 15 and August 15 of each year, beginning on August 15,
2011.



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



     “Maturity Date” means February 15, 2016.



     “Merger Event” shall have the meaning specified in Section 8.06(a).



7









 





     “Non-Recourse Indebtedness” means, for purposes of Sectin 4.04 hereof, Indebtedness with
respect to which recourse for payment is limited to specific assets related to a particular
property or group of properties encumbered by a lien securing such Indebtedness; provided, however,
that personal recourse of borrower for any such Indebtedness for customary non-recourse carve-outs
in non-recourse financing of real estate shall not, by itself, prevent such Indebtedness from being
characterized as Non-Recourse Indebtedness. “Customary non-recourse carve-outs” means fraud,
misrepresentation, misapplication of cash, waste, environmental claims and liabilities and other
circumstances customarily excluded by institutional lenders from exculpation provisions and/or
included in separate indemnification agreements.



     “Non-Stock Change of Control” shall have the meaning specified in Section 8.01(b)(i).



     “Note” or “Notes” shall have the meaning specified in the third paragraph of the recitals of
this Supplemental Indenture, and shall include any Additional Notes issued pursuant to Section
2.05.



     “Noteholder” or “Holder” or “holder,” as applied to any Note, or other similar terms (but
excluding the term “beneficial holder”), means any Person in whose name at the time a particular
Note is registered on the Security Register.



     “Opening of Business” means 9:00 a.m. (New York City time).



     “Record Date,” with respect to the payment of interest on any Interest Payment Date, shall
have the meaning specified in Section 2.03.



     “Redemption Date” means the date fixed for redemption of Notes by the Company.



     “Redemption Price” shall have the meaning specified in Section 3.02(a).



     “Reference Property” shall have the meaning specified in Section 8.06(a).



     “Repurchase Notice” shall have the meaning specified in Section 9.04(a).



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



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



     “Security” or “Securities” shall have the meaning specified in the first paragraph of the
recitals of this Supplemental Indenture.



     “Significant Subsidiaries” shall have the meaning specified in Rule 1-02(w) of Regulation S-X
of the Securities Act.



     “Specified Date Company Notice” shall have the meaning specified in Section 9.02(b).



     “Specified Date Repurchase Date” shall have the meaning specified in Section 9.02(a).



8









 





     “Specified Date Repurchase Price” shall have the meaning specified in Section 9.02(a).



     “Spin-Off” shall have the meaning specified in Section 8.04(c).



     “Stock Price” means the price paid per share of Common Stock in connection with a Fundamental
Change pursuant to which Additional Shares shall be added to the Conversion Rate as set forth in
Section 8.01(b) hereof. If holders of Common Stock receive only cash in such Fundamental Change
transaction, then the Stock Price shall be the cash amount paid per share. Otherwise, the Stock
Price shall be equal to the average of the Last Reported Sale Prices of the Common Stock over the
five consecutive Trading Day period ending on the Trading Day immediately preceding the Effective
Date of the Fundamental Change.



     “Supplemental Indenture” shall have the meaning specified in the preamble of this Supplemental
Indenture.



     “Trading Day” means a day during which (i) trading in Common Stock generally occurs and (ii) a
Last Reported Sale Price for Common Stock (other than a Last Reported Sale Price referred to in the
next to last sentence of such definition) is available for such day; provided that if shares of
Common Stock are not admitted for trading or quotation on or by any United States national
exchange, bureau or other organization referred to in the definition of Last Reported Sale Price
(excluding the next to last sentence of that definition), Trading Day shall mean any Business Day.



     “Trigger Event” shall have the meaning specified in Section 8.04(c).



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



ARTICLE II:




ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES



     Section 2.01 Designation and Amount. The Notes shall be designated as the “7.50%
Senior Convertible Notes due 2016.” The aggregate principal amount of Notes that may be
authenticated and delivered under this Supplemental Indenture is initially limited to $100,000,000,
subject to Section 2.05 and except for Notes authenticated and delivered upon registration or
transfer of, or in exchange for, or in lieu of other Notes pursuant to Section 8.02 hereof and
Section 2.08, Section 2.09 and Section 2.10 of the Base Indenture. Each Initial Note is being
issued at a price of 100% of its principal amount, plus accrued interest, if any, from February 4,
2011.



     Section 2.02 Form of 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.



          Any of the Notes may have such letters, numbers or other marks of identification and such
notations, legends or endorsements as the officers executing the same may approve (execution
thereof to be conclusive evidence of such approval) and as are not inconsistent with






9









 







the provisions of this Supplemental Indenture, or as may be required by the Depositary, as may
be required to comply with any 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 designated for issuance, or to conform to usage or to indicate any special limitations
or restrictions to which any particular Notes are subject.




          A Global Note shall represent such principal amount of the Outstanding Notes as shall be
specified therein and shall provide that it shall represent the aggregate principal amount of
Outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of
Outstanding Notes represented thereby may from time to time be increased or reduced to reflect
repurchases, conversions, transfers or exchanges permitted hereby. Any endorsement of a Global Note
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, at the direction of the Trustee, in such
manner and upon instructions given by the Holder of such Notes in accordance with this Supplemental
Indenture. Payment of principal and accrued and unpaid interest on a Global Note shall be made to
the Holder of such Note on the date of payment, unless a Record Date or other means of determining
Holders eligible to receive payment is provided for herein.




          The terms and provisions contained in the form of Note attached as Exhibit A hereto
are incorporated herein and 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.




     Section 2.03 Date and Denomination of Notes; Payments of Interest. The Notes shall be
issuable in registered form, without interest coupons, and 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 Note 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. If an Interest Payment Date is not a Business Day, payment will be made on
the next succeeding Business Day, and no additional interest will accrue thereon.



          The Person in whose name any Note (or its Predecessor Security) 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 accrued and unpaid interest payable on such Interest Payment Date,
subject to Section 4.01(b) hereof. Interest shall be payable at the office or agency maintained by
the Company for such purpose, which shall initially be the Corporate Trust Office. The Company
shall make payments of accrued and unpaid interest on (i) any Global Note, in immediately available
funds in accordance with the procedures required by the Depositary; (ii) any certificated Notes
having a principal amount of less than $2,000,000 by check mailed to the address of the Holder of
such Note as such address shall appear in the Security Register or (iii) any certificated Notes
having a principal amount of $2,000,000 or more, by wire transfer in immediately available funds at
the request of the Holder of such Notes duly delivered in writing to the Trustee and the Paying
Agent (if different from the Trustee) at least five Business Days prior to the relevant Interest
Payment Date; provided, however, at maturity, interest will be payable as set forth in Section
4.01. The term “Record Date” with respect to any






10









 







Interest Payment Date shall mean the February 1 or August 1 preceding the applicable February
15 or August 15 Interest Payment Date, respectively.




     Section 2.04 Global Notes. So long as the Notes are eligible for book-entry
settlement with the Depositary, unless otherwise required by law, all Notes shall be represented by
one or more Notes in global form, as attached hereto as Exhibit A (each, a “Global Note”)
registered in the name of the Depositary or the nominee of the Depositary. The transfer and
exchange of beneficial interests in a Global Note, which does not involve the issuance of a
definitive Note, shall be effected through the Depositary in accordance with this Supplemental
Indenture (including the restrictions on transfer set forth herein) and the procedures of the
Depositary therefor.



     Section 2.05 Additional Notes; Repurchases. The Company may, without the consent of
the Noteholders and notwithstanding Section 2.01, increase the principal amount of the Notes by
issuing additional Notes (“Additional Notes”) of the same series as the Initial Notes in the future
in an unlimited aggregate principal amount on the same terms and conditions, except for any
differences in the issue price and interest accrued prior to the issue date of the Additional
Notes; provided that such differences do not cause the Additional Notes to constitute a different
class of securities than the Notes for U.S. federal income tax purposes; provided further, that the
Additional Notes have the same CUSIP number as the Initial Notes. The Notes and any Additional
Notes shall rank equally and ratably and shall be treated as a single class for all purposes under
the Base Indenture and this Supplemental Indenture including, without limitation, for purposes of
any waivers, supplements or amendments to the Indenture requiring the approval of Holders of the
Notes and any offers to purchase the Notes. All provisions of the Indenture shall be construed and
interpreted to permit the issuance of such Additional Notes and to allow such Additional Notes to
become fungible and interchangeable with the Initial Notes issued under the Indenture. No
Additional Notes may be issued if an Event of Default has occurred with respect to the Notes and is
continuing.



     Any
Notes repurchased by the Company may, at the Company’s option,
be surrendered to the Trustee for cancellation, but may not be
reissued or resold by the Company. Any Notes surrendered for
cancellation may not be reissued or resold and will be promptly
cancelled.


     Section 2.06 No Sinking Fund. No sinking fund is provided for the Notes.



     Section 2.07 Ranking. The Notes constitute a senior general unsecured obligation of
the Company, ranking equally in right of payment with all of the existing and future unsecured
senior indebtedness of the Company and ranking senior in right of payment to any future
indebtedness of the Company that is expressly made subordinate to the Notes by the terms of such
indebtedness.



     Section 2.08 Discharge and Defeasance. The discharge provisions of the Base Indenture
related to Notes that will become due and payable within one year in Section 3.01(a)(ii)(B) shall
be deleted for purposes of the Notes and not apply to the Notes. The Notes will not be subject to
defeasance.



ARTICLE III:




REDEMPTION



     Section 3.01 Redemption Right.



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          (a) The Notes shall be redeemable at the Company’s option in accordance with this Article III,
in whole or in part, at any time on or after February 15, 2014 if the Last Reported Sale Price of
the Common Stock for 20 or more Trading Days in a period of 30 consecutive Trading Days ending on
the Trading Day prior to the date the Company provides a Redemption Notice in accordance with this
Article III exceeds 130% of the Conversion Price in effect on each such Trading Day.




          (b) Notwithstanding the foregoing, the Company may only exercise its redemption rights
pursuant to clause (a) of this Section 3.01 if, as evidenced by an Officer’s Certificate, all of
the conditions listed below (the “Equity Conditions”) are satisfied on each day during the period
(x) commencing ten days prior to the date a Redemption Notice is delivered to the Trustee and (y)
ending on the Redemption Date (the “Equity Conditions Measuring Period”). The Equity Conditions are
as follows:





     (i) all shares of Common Stock issuable upon conversion of the Notes and held
by a non-affiliate of the Company shall be eligible for sale without the need for
registration under any applicable federal or state securities laws;




     (ii) the Company shall have no knowledge of any fact that would cause any
shares of Common Stock issuable upon conversion of the Notes not to be eligible for
sale without restriction pursuant to Rule 144 and any applicable state securities
laws (other than restrictions due to the Holder of such Common Stock being an
Affiliate of the Company);




     (iii) during the Equity Conditions Measuring Period, the Common Stock is listed
or traded on The Nasdaq Global Market, The Nasdaq Global Select Market, The Nasdaq
Capital Market or the New York Stock Exchange, or any of their respective successors
(each, an “Eligible Market”) and shall not have been suspended from trading on such
exchange or market (other than suspensions of not more than two trading days and
occurring prior to the applicable date of determination due to business
announcements by the Company) nor shall delisting or suspension by such exchange or
market been threatened or pending either (A) in writing by such exchange or market
or (B) by falling below the then effective minimum listing maintenance requirements
of such exchange or market;




     (iv) during the Equity Conditions Measuring Period, to the extent any Notes
have been delivered to the Company for conversion in accordance with the terms of
the Notes, the Company shall have delivered shares of Common Stock upon conversion
of the Notes to the Holders on a timely basis as set forth in Section 8.03;




     (v) any applicable shares of Common Stock to be issued upon conversion may be
issued in full without violating the rules or regulations of The Nasdaq Global
Market or any applicable Eligible Market on which the Common Stock delivered upon
conversion are then listed or trading;



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     (vi) during the Equity Conditions Measuring Period, the Company shall not have
failed to make any payments within five Business Days of when such payment is due
pursuant to the Notes, this Indenture or related documents;




     (vii) during the Equity Conditions Measuring Period, there shall not have
occurred the public announcement of a pending, proposed or intended transaction or
event that will constitute a Fundamental Change, pursuant to clause (a) or (d) of
the definition thereof (other than, for the avoidance of doubt, any such transaction
or event that is not a Fundamental Change as a result of the last paragraph of the
definition thereof), which has not been abandoned, terminated or consummated; and




     (viii) no Default or Event of Default under the Indenture shall have occurred
and be continuing.



          (c) The Company may elect to redeem any Notes pursuant to this Section 3.01 by providing
notice to each Holder of such Notes in accordance with Section 3.04 not less than 25 nor more than
60 calendar days prior to the Redemption Date for such Notes.




          (d) The Trustee has no duty to verify whether the Equity Conditions have been satisfied and
may conclusively rely on the Officer’s Certificate delivered in connection therewith.




     Section 3.02 Redemption Price.



          (a) The “Redemption Price” (as determined by the Company) for any Notes redeemed pursuant to
Section 3.01 shall be an amount in cash equal to 100% of the aggregate principal amount of the
Notes being redeemed, plus any accrued and unpaid interest (including Additional Interest, if any)
to, but excluding, the Redemption Date.




          (b) If the Redemption Date falls after a Record Date for the payment of interest and on or
prior to the corresponding Interest Payment Date, the Company shall pay the full amount of accrued
and unpaid interest payable on such Interest Payment Date to the holder of record at 5:00 p.m., New
York City time, on such Record Date and the cash portion of the Redemption Price shall not include
such accrued and unpaid interest.




     Section 3.03 Selection of Notes to be Redeemed.



          (a) If less than all the Outstanding Notes are to be redeemed, the particular Notes to be
redeemed shall be selected not more than 60 calendar days prior to the Redemption Date by the
Trustee, from the Outstanding Notes not previously called for redemption in integral multiples of
$1,000 principal amount by lot, on a pro rata basis or in accordance with such other method as the
Trustee reasonably considers fair and appropriate; provided that the unredeemed portion of the
principal amount of any Security shall be in a denomination not less than the minimum authorized
denomination for such Security.







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          (b) The Trustee shall promptly notify the Company in writing of the Notes selected for partial
redemption and the principal amount thereof to be redeemed. For all purposes of this Indenture,
unless the context otherwise requires, all provisions relating to the redemption of Notes shall
relate, in the event the Notes are redeemed or to be redeemed only in part, to the portion of the
principal amount of such Notes that has been or is to be redeemed.




          (c) If the Trustee selects a portion of a Holder’s Notes for partial redemption and such
Holder converts a portion of the same Notes, the converted portion shall be deemed to be from the
portion selected for redemption.




     Section 3.04 Redemption Notice.



          (a) Notice of redemption (a “Redemption Notice”) shall be given by first-class mail, postage
prepaid, to each Holder of Notes to be redeemed, at the address of such Holder as it appears in the
Securities Register.




          (b) The Redemption Notice for any Notes to be redeemed shall state:





     (i) the Redemption Date;




     (ii) the Redemption Price or, if the Redemption Price cannot be calculated
prior to the time the Redemption Notice is required to be sent, a statement of how
the Redemption Price will be calculated;




     (iii) if less than all Outstanding Notes are to be redeemed, the identification
(and, in the case of partial redemption, the respective principal amounts) of the
particular Notes to be redeemed;




     (iv) that on the Redemption Date, the Redemption Price will become due and
payable upon each Note or portion thereof, and that interest thereon, if any, shall
cease to accrue on and after said date;




     (v) the place or places where such Notes are to be surrendered for payment of
the Redemption Price; and




     (vi) the CUSIP number for the Notes redeemed; provided that such notice may
state that no representation is made as to the correctness or accuracy of the CUSIP
number, if any, listed in such notice or printed on the Notes.



          (c) At the Company’s request, the Trustee shall give the Redemption Notice in the Company’s
name and at the Company’s expense; provided that the Company make such request at least three
Business Days prior to the date by which such Redemption Notice is to be given to the Holders of
the Notes (it being understood that the Company will prepare such notice).




          (d) A Redemption Notice shall be irrevocable.







14









 








          (e) A Redemption Notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the Holder receives such notice.




     Section 3.05 Payment of Notes Called for Redemption.



          (a) If any Redemption Notice has been given in respect of any Notes in accordance with Section
3.04, such Notes or portion of such Notes shall become due and payable on the Redemption Date at
the place or places stated in the Redemption Notice and at the applicable Redemption Price. On
presentation and surrender of such Notes at the place or places stated in the Redemption Notice,
such Notes or the portions thereof specified in the Redemption Notice shall be paid and redeemed by
the Company at the applicable Redemption Price.




          (b) On or prior to 11:00 a.m., New York City time, on the Redemption Date, the Company shall
deposit with the Paying Agent (or, if the Company is acting as its own Paying Agent, set aside,
segregate and hold in trust) an amount of money sufficient to pay the Redemption Price of all of
the Notes to be redeemed on such Redemption Date. Subject to receipt of funds by the Paying Agent,
payment for the Notes to be redeemed shall be made promptly after the later of:





     (i) the Redemption Date for such Notes; and




     (ii) the time of presentation of such Notes to the Trustee (or other Paying
Agent appointed by the Company) by the Holder thereof in the manner required by this
Section 3.05.


The Paying Agent shall, promptly after such payment and upon written demand by the Company, return
to the Company any funds in excess of the Redemption Price.




          (c) Subject to a Holder’s right to receive interest on the related Interest Payment Date where
the Redemption Date falls between a Record Date and the Interest Payment Date to which it relates
as set forth in Section 3.02(b), if the Paying Agent holds money sufficient to pay the Redemption
Price for all the Notes or portions thereof that are to be redeemed as of the Business Day
immediately following the Redemption Date, then on and after the Redemption Date:





     (i) such Notes shall cease to be outstanding as of the Redemption Date and
interest, if any, will cease to accrue, whether or not book-entry transfer of the
Notes is made or whether or not the Notes are delivered to the Paying Agent,




     (ii) all other rights of the Holder will terminate as of the Redemption Date,
other than the right to receive the Redemption Price and previously accrued and
unpaid interest, if any, upon delivery or transfer of the Notes, and



15









 






     (iii) the Holder will be deemed to be a holder of record of any shares of
Common Stock issuable in connection with such redemption as of the date of delivery
or transfer of the Notes by such Holder.



          (d) Cash amounts due upon redemption in respect of Notes presented for redemption shall be
paid by the Company to such Holder, or such Holder’s nominee or nominees.




          (e) Upon presentation of any Notes redeemed in part only, the Company shall not be required to
issue, register the transfer of or exchange any certificated Notes.




     Section 3.06 Officer’s Certificate to Trustee. In connection with any redemption of
Notes effected pursuant to this Article III, the Company shall deliver to the Trustee an Officer’s
Certificate dated as of the Redemption Date to the effect that all conditions precedent to the
redemption of such Notes have been satisfied.



ARTICLE IV:




PARTICULAR COVENANTS OF THE COMPANY



     Section 4.01 Payment of Principal and Interest.



          (a) Section 2.11, Section 8.01 and Section 8.03 of the Base Indenture shall apply to the
Notes, subject to Section 8.03 hereof; provided, however, that, the Company shall make payments of
accrued and unpaid interest on (i) any Global Note, in immediately available funds in accordance
with the procedures required by the Depositary; (ii) any certificated Notes having a principal
amount of less than $2,000,000 by check mailed to the address of the Holder of such Note as such
address shall appear in the Security Register or (iii) any certificated Notes having a principal
amount of $2,000,000 or more, by wire transfer in immediately available funds at the request of the
Holder of such Notes duly delivered in writing to the Trustee and the Paying Agent (if different
from the Trustee) at least five Business Days prior to the relevant Interest Payment Date.




          (b) Except as otherwise provided in this Section 4.01, a Holder of any Notes at 5:00 p.m., New
York City time, on a Record Date shall be entitled to receive interest on such Notes on the
corresponding Interest Payment Date. A Holder of any Notes as of a Record Date that are converted
after 5:00 p.m., New York City time on such Record Date and prior to the Opening of Business on the
corresponding Interest Payment Date shall be entitled to receive accrued and unpaid interest
(including Additional Interest, if any) on the principal amount of such Notes, notwithstanding the
conversion of such Notes prior to such Interest Payment Date. However, a Holder that surrenders any
Notes for conversion after 5:00 p.m., New York City time on a Record Date and prior to the Opening
of Business on the corresponding Interest Payment Date shall be required to pay the Company an
amount equal to the accrued and unpaid interest payable by the Company with respect to such Notes
on such Interest Payment Date at the time such Holder surrenders such Notes for conversion,
provided, however, that this sentence shall not apply to a Holder that converts Notes:







16









 









     (i) after 5:00 p.m., New York City time on the Record Date immediately
preceding the Maturity Date;




     (ii) in connection with a redemption by the Company pursuant to Article III, if
the Company has specified a Redemption Date that is after a Record Date and on or
prior to the next Interest Payment Date;




     (iii) in connection with a Fundamental Change in which the Company has
specified a Fundamental Change Repurchase Date that is after a Record Date and on or
prior to the next Interest Payment Date; or




     (iv) to the extent of any overdue interest (including overdue Additional
Interest, if any), if any overdue interest (including overdue Additional Interest,
if any) exists at the time of conversion with respect to such Notes;


Accordingly, a Holder that converts Notes under any of the circumstances described in clauses (i),
(ii), (iii) or (iv) above will not be required to pay to the Company an amount equal to the accrued
and unpaid interest payable by the Company with respect to such Notes on the relevant Interest
Payment Date.




          (c) Notwithstanding anything to the contrary in the Indenture, the Company may pay accrued and
unpaid interest (including Additional Interest, if any) to a Person other than the Holder of record
on the Record Date immediately prior to the Maturity Date on the Maturity Date. On the Maturity
Date, the Company shall pay accrued and unpaid interest only to the Person to whom the Company pays
the principal amount of the Notes.




     Section 4.02 Maintenance of Office or Agency for Conversion Agent. If at any time the
Conversion Agent is not the Trustee or an office or agency designated or appointed by the Trustee,
the Company will give prompt written notice to the Trustee of the location of such Conversion
Agent, and any change in the location of the office or agency of the Conversion Agent. If at any
time the Company shall fail to maintain an office or agency for the Conversion Agent or shall fail
to furnish the Trustee with the address thereof, presentations, surrenders, notices and demands
related to conversions of Notes may be made or served at the Corporate Trust Office or the office
or agency of the Trustee. The Company hereby appoints the Trustee its agent to receive all such
presentations, surrenders, notices, and demands.




	 	 	Section 4.03 Reports by Company.





          (a) The Company shall deliver to the Trustee copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of the foregoing as the
Commission may by rules and regulations prescribe) that it is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act within 15 days after the Company is required to
file such reports, information and documents with the Commission. All required reports, information
and documents referred to in this Section 4.03(a) shall be deemed to be delivered to the Trustee at
the time such reports, information and documents are publicly filed with the Commission via the
Commission’s EDGAR and/or IDEA filing system (or any successor system).







17









 








          (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 Officer’s Certificate). Notwithstanding anything to the
contrary in this Section 4.03, the Company, to the extent permitted under the Trust Indenture Act,
shall not be required to deliver to the Trustee or the Holders any material for which the Company
has sought and received confidential treatment by the Commission.




     Section 4.04 Financial Covenants.



          (a) Until February 15, 2014, the Company will maintain, at all times, Cash and Cash
Equivalents of not less than $20 million;




          (b) Until February 4, 2013, the Company’s total consolidated Indebtedness shall not exceed
$150 million at any time, excluding, for purposes of this clause (b), until April 5, 2011, the
Company’s outstanding 4.50% Notes; and




          (c) Until February 4, 2013, the Company’s total consolidated Indebtedness shall not exceed $50
million at any time, excluding for purposes of this clause (c): (i) the Notes, (ii) any
Indebtedness with a maturity date after February 15, 2014, which Indebtedness does not provide the
holder with a unilateral put right prior to February 15, 2014 and (iii) until April 5, 2011, the
Company’s outstanding 4.50% Notes.




ARTICLE V:




DEFAULTS AND REMEDIES



     Section 5.01 Events of Default. The provisions of Section 4.01(a), Section 4.01(b),
Section 4.01(c) and the last paragraph under Section 4.01 of the Base Indenture shall not be
applicable to the Notes. As contemplated under Section 2.05 and Section 4.01(g) of the Base
Indenture, the following events, in addition to the events described in clauses (e) and (f) of the
Base Indenture, shall be Events of Default with respect to the Notes:




     (a) failure by the Company to pay any interest (including Additional Interest, if any) on
the Notes when due and payable and such failure continues for a period of 30 calendar days;




     (b) failure by the Company to pay principal of the Notes when due at the Maturity Date,
or failure by the Company to pay the Covenant Breach Repurchase Price, the Specified Date
Repurchase Price, the Fundamental Change Repurchase Price or the Redemption Price payable, in
respect of any Notes when due;




     (c) failure by the Company to deliver shares of Common Stock (and cash in lieu of
fractional shares) upon the conversion of any Notes and such failure continues for five
calendar days following the scheduled settlement date for such conversion;



18









 






     (d) failure by the Company to comply with the covenants set forth under Article VII
hereof;




     (e) failure by the Company to provide the Fundamental Change Company Notice of the
anticipated Effective Date or actual Effective Date of a Fundamental Change on a timely basis
as herein required;




     (f) failure by the Company to perform or observe any other term, covenant, or agreement
in the Notes or the Indenture (other than the financial covenants set forth in Section 4.04)
for a period of 90 calendar days after written notice of such failure is given to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding;




     (g) failure by the Company to pay when due (whether at maturity or otherwise), or a
default that results in the acceleration of maturity, of any indebtedness for borrowed money
of the Company or any of its Significant Subsidiaries in an aggregate amount in excess of
$20,000,000 (or its foreign currency equivalent), unless such indebtedness is discharged, or
such acceleration is rescinded, stayed or annulled, within a period of 30 calendar days after
written notice of such failure is given to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes then
outstanding; or




     (h) any final judgment or judgments for the payment of money in excess of $20,000,000 is
rendered against the Company or any of its Subsidiaries and is not discharged for any period
of 30 consecutive days during which a stay of enforcement is not in effect and the aggregate
amount thereof not covered by insurance is in excess of $20,000,000.



          Notwithstanding anything to the contrary, the failure to perform or observe any of the
covenants set forth under Section 4.04 shall not be deemed to constitute an Event of Default so
long as the Company satisfies its obligation to provide timely notice of such breach and repurchase
all Notes it is required to purchase and for which Holders have properly delivered and not
withdrawn a written Repurchase Notice as set forth under Section 9.01 and Section 9.04. In the
event the Company fails to provide notice of such breach or fails to repurchase Notes in accordance
with Section 9.01, such failure shall constitute an Event of Default. Following such Event of
Default, 100% of the aggregate principal amount of the Notes shall become due and payable at the
Covenant Breach Repurchase Price.




          The Company shall be required to notify the Trustee in writing promptly upon becoming aware of
the occurrence of any default (including any breach of a financial covenant set forth in Section
4.04) under the Indenture with respect to the Notes. The Trustee is then required within 90
calendar days of a Responsible Officer becoming aware of the occurrence of any default to give to
the registered Holders of the Notes notice of all uncured defaults known to it. However, the
Trustee may withhold notice to the Holders of the Notes of any default, except defaults in payment
of principal of or interest (including Additional Interest, if any) on the Notes, if the Trustee,
in good faith, determines that the withholding of such notice is in the interests of the Holders.
The Company is also required to deliver to the Trustee, on or before a date not more






19









 







than 120 calendar days after the end of each fiscal year and 40 calendar days after the end of
each fiscal quarter, an Officer’s Certificate as to compliance with the Indenture, including
whether or not any default (including the breach of any financial covenant set forth in Section
4.04 hereof) has occurred.





	 	 	Section 5.02 Recission of Acceleration.





          After any declaration of acceleration in accordance with Section 4.02 of the Base Indenture,
but before a judgment or decree for payment of the money due has been obtained by the Trustee, the
Holders of a majority in aggregate principal amount of the Notes outstanding, by written notice to
the Company and the Trustee, may rescind and annul such declaration if:





     (a) the Company has paid (or deposited with the Trustee a sum sufficient to pay) (1) all
overdue interest (including Additional Interest, if any) on all Notes; (2) the principal
amount of any Notes that have become due otherwise than by such declaration of acceleration;
(3) to the extent that payment of such interest is lawful, interest upon overdue interest
(including Additional Interest, if any); and (4) all sums paid or advanced by the Trustee
under the Indenture and the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel; and




     (b) all Events of Default, other than the non-payment of the principal amount and any
accrued and unpaid interest (including Additional Interest, if any) that have become due
solely by such declaration of acceleration have been cured or waived.



     Section 5.03 Additional Interest.



          (a) Notwithstanding anything to the contrary in the Indenture, the failure by the Company to
comply with Section 4.03, and any failure to comply with the requirements of Section 314(a)(1) of
the Trust Indenture Act (each, a “Filing Failure”), at the Company’s option will not constitute an
Event of Default for the 365 days after the occurrence of such Filing Failure provided the Company
pays additional interest on the Notes (“Additional Interest”) at an annual rate equal to 0.50% of
the principal amount of the Notes. In the event the Company does not elect to pay the Additional
Interest upon a Filing Failure in accordance with this Section 5.03, such Filing Failure will
constitute an Event of Default under the Indenture and the Notes will be subject to acceleration in
accordance with Section 4.02 of the Base Indenture. The Additional Interest will accrue on all
Outstanding Notes from and including the date on which a Filing Failure first occurs to but not
including the 365th day thereafter (or such earlier date on which the Filing Failure shall have
been cured or waived). On such 365th day (or such earlier date on which the Filing Failure shall
have been cured or waived), the Notes will be subject to acceleration in accordance with Section
4.02 of the Base Indenture if the Filing Failure is continuing.




          (b) For the avoidance of doubt, this Section 5.03 will not affect the rights of Holders of
Notes in the event of the occurrence of any other Event of Default.




     Section 5.04 Waiver of Past Defaults. Section 4.13 of the Base Indenture is deleted
in its entirety and replaced with the following:



20









 





          “Section 4.13 Waiver of Past Defaults. The Holders of not less than a majority in principal
amount of the Notes outstanding may, on behalf of the Holders of all the Notes, waive any past
default or Event of Default under the Indenture and its consequences, except:





     (a) failure by the Company to pay principal of (or the Covenant Breach Repurchase
Price, the Specified Date Repurchase Price, the Fundamental Change Repurchase Price or
Redemption Price, as applicable) or interest (including Additional Interest, if any) on the
Notes when due;




     (b) failure by the Company to convert any Notes into Common Stock as provided in this
Indenture; or




     (c) failure of the Company to comply with any provision of the Indenture that would
require 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 this Indenture and the Notes; but no such
waiver shall extend to any subsequent or other default or Event of Default or impair any right
consequent thereon.”




     Except as amended, supplemented or modified by Sections 5.01 through 5.04 hereof, all of the
provisions of Article Four of the Base Indenture shall be applicable to the Notes.



ARTICLE VI:




SUPPLEMENTAL INDENTURES



     Section 6.01 Supplemental Indentures Without Consent of Noteholders. Without the
consent of any Holders of the Notes, the Company, when authorized by or pursuant to a Board
Resolution, and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental to the Indenture, for any of the following purposes:




     (a) the purposes set forth in Clauses (a), (b) and (d) through (j) of Section 7.01 of
the Base Indenture (but not including clause (c) thereof);




     (b) to provide for conversion rights of Holders of Notes and the Company’s repurchase
obligations in connection with a Fundamental Change 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;




     (c) to conform the provisions of the Indenture to the “Description of Notes” section
contained in the Company’s final prospectus supplement related to the Notes dated February
4, 2011;




     (d) to increase the Conversion Rate; provided, that the increase will not adversely
affect the interests of the Holders of the Notes;



21









 






     (e) to cure any ambiguity or correct or supplement any inconsistent provision contained
in the Indenture or to make any other provisions with respect to matters or questions
arising under the Indenture that do not adversely affect the interest of the Holders in any
material respect;




     (f) to make any provision with respect to matters or questions arising under the
Indenture that the Company may deem necessary or desirable and that shall not be
inconsistent with provisions of the Indenture; provided that such change or modification
does not, in the good faith opinion of the Company’s board of directors, adversely affect
the interests of the Holders of the Notes in any material respect; and




     (g) to surrender any right or power conferred upon the Company.



     Section 6.02 Modification and Amendment with Consent of Noteholders. Section 7.02 of
the Base Indenture shall be applicable to the Notes. In addition, as contemplated by Sections 2.05
and 7.02 of the Base Indenture, no supplemental indenture shall, without the consent of the Holder
of each Outstanding Note affected thereby:




     (a) make any change that affects the right of any Holder to convert Notes into shares
of the Company’s Common Stock or reduce the number of shares of Common Stock receivable, or
any other property, including cash, receivable upon conversion pursuant to the terms of the
Indenture;




     (b) change the Company’s obligation to repurchase any Notes upon breach of the
financial covenants set forth in Section 4.04, on a specified date and upon a Fundamental
Change in a manner materially adverse to the Holders;




     (c) reduce any amount payable upon repurchase of the Notes on the Covenant Breach
Repurchase Date, the Specified Date Repurchase Date or the Fundamental Change Repurchase
Date;




     (d) change the Company’s obligation to maintain an office or agency in a Place of
Payment; or




     (e) modify the redemption provisions set forth in Article III in a manner adverse to
the Holders of the Notes.



     Section 6.03 Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, the Base Indenture and this Supplemental Indenture shall
be modified and amended in accordance therewith, and such supplemental indenture shall form a part
of the Indenture for all purposes; and the respective rights, limitation of rights, duties, powers,
trusts and immunities under the Indenture of the Trustee, the Company, and every Holder of Notes
theretofore or thereafter authenticated and delivered hereunder shall be determined, exercised and
enforced thereunder to the extent provided therein. After a
modification or amendment under the Indenture becomes effective, the
Company shall mail to the Holders a notice briefly describing such
modification or amendment. However, the failure to give such notice
to all the Holders, or any defect in the notice, will not impair or
affect the validity of the modification or amendment.



     Section 6.04 Article Seven of the Base Indenture.
Except as amended by this Article VI, all of the provisions of Article 7 of the Base Indenture
shall be applicable to the Notes.




22











 





ARTICLE VII:




CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE



     Section 7.01 Consolidation, Merger, and Sale of Assets. Section 6.01 of the Base
Indenture is deleted in its entirety and replaced with the following:



     “Section 6.01. Company May Consolidate, Etc., Only on Certain Terms. The Company will not, in
a single transaction or a series of related transactions, consolidate with or merge with or into
any other Person, or sell, convey, transfer or lease its property and assets substantially as an
entirety to another Person, or permit any Person to consolidate with or merge into the Company or
convey, transfer, sell or lease such Person’s properties and assets substantially as an entity to
the Company, unless:




     (a) either (i) the Company shall be the continuing corporation or (ii) the resulting,
surviving or transferee Person (if other than the Company) shall be a corporation, limited
liability company, partnership or trust organized and validly existing under the laws of the
United States of America, any State thereof or the District of Columbia (the “Successor
Company”), and such Successor Company shall expressly assume, by an indenture supplemental to
the Indenture, executed and delivered to the Trustee, the due and punctual payment of
principal of, premium, if any, and interest on the Notes, and all the obligations of the
Company under the Notes and the Indenture;




     (b) immediately after giving effect to such transaction, no default or Event of Default
has occurred and is continuing;




     (c) if as a result of such transaction the Notes become convertible into common stock or
other securities issued by a third party, such third party fully and unconditionally
guarantees all obligations of the Company or the Successor Company, as the case may be, under
the Notes and the Indenture; and




     (d) the Company shall have delivered to the Trustee an Officer’s Certificate and Opinion
of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and,
if a supplemental indenture is required in connection with such transaction, such supplemental
indenture, comply with this Section 7.01 and that all conditions precedent herein provided for
relating to such transaction have been complied with, together with any documents required
under Section 7.03 of the Base Indenture.”



ARTICLE VIII:




CONVERSION OF NOTES



     Section 8.01 Conversion Rights.


          (a) Upon compliance with the provisions of this Article VIII, a Holder of Notes shall have the
right, at any time, 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 Business Day immediately preceding the Maturity Date at a



23









 








rate (the “Conversion Rate”) of 33.3333 shares of Common Stock (subject to adjustment by the
Company as provided in Section 8.04) per $1,000 principal amount of Notes (the “Conversion
Obligation”), equivalent to an initial conversion price of approximately $30.00 per share.



          (b) (i) If and only to the extent a Noteholder elects to convert Notes prior to the Maturity
Date in connection with a transaction described in clause (a), (d), or (e) of the definition of
Fundamental Change pursuant to which 10% or more of the consideration for the Common Stock (other
than cash payments for fractional shares and cash payments made in respect of dissenters’ appraisal
rights) in such transaction consists of cash or securities (or other property) that are not shares
of common stock traded or scheduled to be traded immediately following such transaction on a U.S.
national securities exchange, then 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. Such transaction shall be referred to herein as a
“Non-Stock Change of Control.” The Company shall notify in writing the Trustee and Holders of the
anticipated effective date of a Non-Stock Change of Control at least 20 calendar days prior to the
anticipated effective date of such Non-Stock Change of Control. Settlement of Notes tendered for
conversion to which Additional Shares shall be added to the Conversion Rate as provided in this
subsection shall be settled pursuant to Section 8.02 below, as applicable. A conversion of the
Notes by a holder will be deemed for these purposes to be “in connection with” a Non-Stock Change
of Control if the conversion notice is received by the Conversion Agent following the effective
date of the Non-Stock Change of Control but before the Close of Business on the Business Day
immediately preceding the related repurchase date. Such conversion notice shall indicate that the
Holder of Notes has elected to convert Notes in connection with a Non-Stock Change of Control;
provided, however, that the failure to so indicate shall not in any way affect the Conversion
Obligation or the right of such Holder to receive Additional Shares in connection with such
conversion.



               (ii) The number of Additional Shares by which the Conversion Rate will be increased shall be
determined by reference to the table attached as Schedule A hereto, based on the date on
which the Non-Stock Change of Control occurs or becomes effective (the “Effective Date”), and the
Stock Price paid per share for Common Stock in such Non-Stock Change of Control; provided, that if
the Stock Price is between two Stock Price amounts in the table attached as Schedule A
hereto or the Effective Date is between two Effective Dates in the table attached as Schedule
A hereto, the number of Additional Shares shall be determined by a straight-line interpolation
between the number of Additional Shares set forth for the higher and lower Stock Price amounts and
the two dates, as applicable, based on a 360-day year; provided further that if (x) the Stock Price
is in excess of $70.00 per share of Common Stock (subject to adjustment in the same manner as set
forth in Section 8.04), no Additional Shares will be added to the Conversion Rate, and (y) the
Stock Price is less than $19.97 per share of Common Stock (subject to adjustment in the same manner
as set forth in Section 8.04), no Additional Shares will be added to the Conversion Rate.
Notwithstanding the foregoing, in no event will the total number of shares of Common Stock issuable
upon conversion exceed 50.0751 per $1,000 principal amount of Notes (subject to adjustment in the
same manner as set forth in Section 8.04).


          The number of Additional Shares within the table in Schedule A hereto shall be
adjusted in the same manner and as of any date on which the Conversion Rate of the Notes is
adjusted as set forth in Section 8.04. The Stock Prices set forth in the first row of the table



24









 








attached as Schedule A hereto (i.e., the column headers) shall be simultaneously
adjusted. The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to
such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate in effect
immediately prior to the adjustment giving rise to the Stock Price adjustment and the denominator
of which is the Conversion Rate as so adjusted.




     Section 8.02 Conversion Procedures.


          (a) Each Security shall be convertible at the office of the Conversion Agent and, if
applicable, in accordance with the procedures of the Depositary.


          (b) In order to exercise the conversion privilege with respect to any interest in a Global
Note, the Holder must deliver the appropriate instruction form for conversion pursuant to the
Depositary’s book-entry conversion program, furnish appropriate endorsements and transfer documents
if required by the Company or the Conversion Agent, pay the funds, if any, required by Section
4.01(b) and, if required, all taxes or duties. In order to exercise the conversion rights with
respect to any certificated Notes, the Holder of any such Notes to be converted, in whole or in
part, shall:




     (i) complete and manually sign the conversion notice provided on the back of
the Note and attached hereto as Exhibit B (the “Conversion Notice”) or a
facsimile of the Conversion Notice;




     (ii) deliver the completed Conversion Notice, which is irrevocable, and the
Note to be converted to the Conversion Agent;




     (iii) if required, furnish appropriate endorsements and transfer documents;




     (iv) if required, pay the funds required by Section 4.01(b); and




     (v) if required, pay all transfer or similar taxes, if any.



The date on which the Holder satisfies all of the applicable requirements set forth in this Section
8.02(b) is the “Conversion Date.” The Notes will be deemed to have been converted immediately prior
to 5:00 p.m., New York City time, on the Conversion Date. The Holder will not be required to pay
any taxes or duties relating to the issuance or delivery of Common Stock if the Holder exercises
the conversion rights, but the Holder will be required to pay any tax or duty that may be payable
relating to any transfer involved in the issuance or delivery of Common Stock in a name other than
that of the Holder of the Note. Certificates representing Common Stock will be issued and delivered
only after all applicable taxes and duties, if any, payable by the Holder have been paid in full.



          (c) Each Conversion Notice shall state the name or names (with address or addresses) in which
any certificate or certificates for shares of Common Stock which shall be issuable upon such
conversion shall be issued. All such Notes surrendered for conversion shall, unless the shares of
Common Stock issuable upon conversion are to be issued in the same name as the registration of such
Notes, be duly endorsed by, or be accompanied by instruments of



25









 








transfer in form satisfactory to the Company duly executed by, the Holder or his duly
authorized attorney.



          (d) In case any Notes of a denomination greater than $1,000 shall be surrendered for partial
conversion, the Company shall execute and the Trustee shall authenticate and deliver to the Holder
of the Notes so surrendered, without charge, new Notes in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Notes.


          Each conversion shall be deemed to have been effected as to any such Notes (or portion
thereof) surrendered for conversion immediately prior to the Close of Business on the relevant
Conversion Date. The Person in whose name the certificate or certificates for the number of shares
of Common Stock that shall be issuable upon such conversion shall become the holder of record of
such shares of Common Stock as of the Close of Business on such Conversion Date. Notwithstanding
the foregoing and anything contained in this Supplemental Indenture to the contrary, in no event
shall a Holder be entitled to the benefit of a Conversion Rate adjustment pursuant to the
provisions of Article VIII hereof in respect of Notes surrendered for conversion if, by virtue of
being deemed the record holder of the shares of Common Stock issuable upon such conversion pursuant
to the foregoing sentence, such Holder participates, as a result of being such holder of record, in
the transaction or event that would otherwise give rise to such Conversion Rate adjustment to the
same extent and in the same manner as holders of shares of Common Stock generally.


          (e) Upon the conversion of an interest in Global Notes, the Trustee (or other Conversion Agent
appointed by the Company) shall make a notation on such Global Notes as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in writing of any
conversions of Notes effected through any Conversion Agent other than the Trustee.


          (f) Notwithstanding the foregoing, a Note in respect of which a Holder has delivered a
Repurchase Notice exercising such Holder’s option to require the Company to purchase such Note may
be converted only if such applicable Repurchase Notice is withdrawn in accordance with Article IX
hereof prior to the Close of Business on the Covenant Breach Repurchase Date, Specified Date
Repurchase Date or Fundamental Change Repurchase Date, as applicable.



     Section 8.03 Payments Upon Conversion.


          (a) Upon any conversion of any Notes, on the third Business Day immediately following the
Conversion Date, the Company shall deliver to the converting Holder a number of shares of Common
Stock equal to (i) the aggregate principal amount of such Notes to be converted divided by $1,000,
multiplied by (ii) the Conversion Rate in effect as of such Conversion Date, together with any cash
payment for any fractional share of Common Stock as described in this Section 8.03.


          (b) Notwithstanding anything to the contrary in the Indenture, upon the conversion of any
Notes, the Holder will not be entitled to receive any separate cash payment for



26









 








accrued and unpaid interest (including Additional Interest), if any, except to the extent
specified in Section 4.01. The Company’s delivery to the Holder of Common Stock together with any
cash payment for any fractional share of Common Stock into which a Note is convertible will be
deemed to satisfy in full the Company’s obligation to pay the principal amount of the Notes so
converted and accrued and unpaid interest (including Additional Interest), if any, to, but not
including, the Conversion Date. As a result, accrued and unpaid interest (including Additional
Interest), if any, to, but not including, the Conversion Date will be deemed to be paid in full
rather than cancelled, extinguished or forfeited.



          (c) The Company shall not issue fractional shares of Common Stock upon conversion of Notes.
If any fractional share of Common Stock would be issuable upon the conversion of any Notes, the
Company shall make payment therefor in cash in lieu of fractional shares of Common Stock based on
the Last Reported Sale Price preceding the Conversion Date.



     Section 8.04 Adjustment of Conversion Rate. The Conversion Rate shall be adjusted
from time to time by the Company as follows:




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



	 	 	 	 	 	 	 	 	 	 	 

	CR1

	 	=
	 	CR0
	 	x
	 	OS1
	 	 
	 	 	 	 	 	 	 
	 	 	 	 	OS0	 	 






     where



	 	 	 	 	 

	CR1

	 	=
	 	the Conversion Rate in effect immediately prior to
the Opening of Business on the record 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 at 5:00 p.m., New
York City time, on the Trading Day immediately
preceding the record date for such dividend or
distribution or the effective date of such share
split or combination, as the case may be;
	 
	 	 	 	 
	OS0

	 	=
	 	the number of shares of Common Stock outstanding
at 5:00 p.m., New York City time, on the Trading
Day immediately preceding the record date for such
dividend or distribution or the effective date of
such share split or combination; and
	 
	 	 	 	 
	OS1

	 	=
	 	the number of shares of Common Stock that would be
outstanding immediately after giving effect to
such dividend, distribution, share split or
combination, as the case may be.






          Such adjustment shall become effective immediately prior to the Opening of Business on the
record date for such dividend or distribution or the effective date of such share



27









 





split or combination, as the case may be. If any dividend or distribution of the type
described in this Section 8.04(a) is declared but not so paid or made, or the outstanding shares of
Common Stock are not subdivided or combined, as the case may be, the Conversion Rate shall be
immediately readjusted, effective as of the date the Board of Directors determines not to pay such
dividend or distribution, or subdivide 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,
subdivision or combination had not been declared.



          (b) In case the Company shall issue to all or substantially all holders of its Common Stock
any rights, warrants, or convertible securities (other than rights issued pursuant to a
shareholders’ rights plan) entitling them for a period of not more than 45 days from the issuance
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, then the Conversion Rate shall be adjusted
based on the following formula; provided that the Conversion Rate will be readjusted to the extent
that such rights, warrants, or convertible securities are not exercised or converted prior to the
expiration.



	 	 	 	 	 	 	 	 	 	 	 

	CR1

	 	=
	 	CR0
	 	x
	 	OS0 + X

	 	 
	 	 	 	 	 	 	 
	 	 	 	 	OS0 + Y	 	 









     where



	 	 	 	 	 

	CR1

	 	=
	 	the Conversion Rate in effect immediately prior to
the Opening of Business on the record date for
such distribution;
	 
	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect at 5:00 p.m., New
York City time, on the Trading Day immediately
preceding the record date for such distribution;
	 
	 	 	 	 
	OS0

	 	=
	 	the number of shares of Common Stock outstanding
at 5:00 p.m., New York City time, on the Trading
Day immediately preceding the record for such
distribution;
	 
	 	 	 	 
	X

	 	=
	 	the total number of shares of Common Stock
issuable pursuant to such rights, warrants or
convertible securities; and
	 
	 	 	 	 
	Y

	 	=
	 	the number of shares of Common Stock equal to the
aggregate price payable to exercise such rights,
warrants, or convertible securities, 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 record date for such distribution.





          Such adjustment shall be successively made whenever any such rights, warrants, or convertible
securities are issued and shall become effective immediately prior to the Opening of Business on
the record date for such distribution.



28









 







          In determining whether any rights, warrants, or convertible securities entitle the holder
thereof 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, and in determining the aggregate offering price of such Common Stock,
there shall be taken into account any consideration received by the Company for such rights,
warrants, or convertible securities and any amount payable on exercise or conversion thereof, where
the value of such consideration, if other than cash, shall be determined by the Board of Directors.


          (c) In case the Company shall distribute shares of Capital Stock, evidences of indebtedness or
other assets or property to all or substantially all holders of its Common Stock (excluding
dividends and distributions covered by Section 8.04(a), Section 8.04(b), Section 8.04(d), and
distributions described below in this Section 8.04(c) with respect to Spin-Offs (as defined below))
(any of such shares of Capital Stock, evidences of indebtedness or other asset or property
hereinafter in this Section 8.04(c) called the “Distributed Property”), then, in each such case the
Conversion Rate shall be adjusted based on the following formula:




	 	 	 	 	 	 	 	 	 	 	 

	CR1

	 	=
	 	CR0
	 	x
	 	SP0

	 	 
	 	 	 	 	 	 	 
	 	 	 	 	SP0  – FMV	 	 








     where



	 	 	 	 	 

	CR1

	 	=
	 	the Conversion Rate in effect immediately prior to
the Opening of Business on the record date for
such distribution;
	 
	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect at 5:00 p.m., New
York City time, on the Trading Day immediately
preceding the record date for such distribution;
	 
	 	 	 	 
	SP0

	 	=
	 	the average of the Last Reported Sale Prices of
the Common Stock over the ten consecutive Trading
Day period ending on the Trading Day immediately
preceding the record date for such distribution;
and
	 
	 	 	 	 
	FMV

	 	=
	 	the fair market value (as determined by the Board
of Directors or a committee thereof) of the
Distributed Property distributed with respect to
each outstanding share of Common Stock as of the
Opening of Business on the record date for such
distribution.





          If the Board of Directors determines the fair market value of any distribution for purposes of
this Section 8.04(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 determining
SP0 above.


          With respect to an adjustment pursuant to this Section 8.04(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



29









 








business unit of the Company listed on a national or regional securities exchange (a
“Spin-Off”), then the Conversion Rate will be increased based on the following formula:





	 	 	 	 	 	 	 	 	 	 	 

	CR1

	 	=
	 	CR0
	 	x
	 	FMV + MP0

	 	 
	 	 	 	 	 	 	 
	 	 	 	 	MP0	 	 







     where



	 	 	 	 	 

	CR1

	 	=
	 	the Conversion Rate in effect immediately prior to
the Opening of Business on the record date for the
Spin-Off;
	 
	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect at 5:00 p.m., New
York City time, on the Trading Day immediately
preceding the record date for the Spin-Off;
	 
	 	 	 	 
	FMV

	 	=
	 	the average of the Last Reported Sale Prices of
the Capital Stock or other similar equity interest
distributed to holders of Common Stock applicable
to one share of Common Stock over the first ten
consecutive Trading Day period immediately
following, and including, the third Trading Day
after the record date for such Spin-Off (such
period, the “Valuation Period”); and
	 
	 	 	 	 
	MP0

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





          Such adjustment shall occur immediately after the Opening of Business on the day after the
last day of the Valuation Period; provided that in respect of any conversion within the ten Trading
Days following the commencement of the Valuation Period, references within this Section 8.04(c) to
ten Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed
during such Valuation Period in determining the applicable Conversion Rate.


          If any such dividend or distribution described in this Section 8.04(c) is declared but not
paid or made, the adjusted Conversion Rate shall be readjusted to be the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared.


          Rights, warrants, or convertible securities distributed by the Company to all holders of
Common Stock, entitling the holders thereof to subscribe for or purchase Capital Stock (either
initially or under certain circumstances), which rights, warrants, or convertible securities, until
the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred
with such 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
Section 8.04(c) (and no adjustment to the Conversion Rate under this Section 8.04(c) will be
required) until the occurrence of the earliest Trigger Event, whereupon such rights, warrants, or
convertible securities shall be deemed to have been distributed and an appropriate adjustment (if
any is required) to the Conversion Rate shall be made under this Section 8.04(c). If any such
rights, warrants, or convertible securities, including any such



30









 








existing rights, warrants, or convertible securities distributed prior to the date of this
Supplemental Indenture, are subject to events, upon the occurrence of which such rights, warrants,
or convertible securities 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 record date with respect to new rights, warrants, or
convertible securities with such rights (and a termination or expiration of the existing rights,
warrants, or convertible securities without exercise by any of the holders thereof). In addition,
in the event of any distribution (or deemed distribution) of rights, warrants, or convertible
securities, 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 Section 8.04 was made, (1) in the case of any such
rights, warrants, or convertible securities 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, warrants, or
convertible securities (assuming such holder had retained such rights, warrants, or convertible
securities), made to all holders of Common Stock as of the date of such redemption or repurchase,
and (2) in the case of such rights, warrants, or convertible securities 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 Section 8.04(c) and Section 8.04(a) and Section 8.04(b), any dividend or
distribution to which this Section 8.04(c) is applicable that also includes a dividend or
distribution of Common Stock to which Section 8.04(a) applies or a dividend or distribution of
rights, warrants, or convertible securities to subscribe for or purchase Common Stock to which
Section 8.04(a) or Section 8.04(b) applies (or both), shall be deemed instead to be (1) a dividend
or distribution of the evidences of indebtedness, assets or shares of Capital Stock other than such
Common Stock or rights, warrants, or convertible securities to which this Section 8.04(c) applies,
and any Conversion Rate adjustment required by this Section 8.04(c) with respect to such dividend
or distribution shall then be made, immediately followed by (2) a dividend or distribution of such
Common Stock or such rights, warrants, or convertible securities (and any further Conversion Rate
adjustment required by Section 8.04(a) and Section 8.04(b) with respect to such dividend or
distribution shall then be made), except (A) the record date of such dividend or distribution shall
be substituted as “the record date” and “the date fixed for such determination” within the meaning
of Section 8.04(a) and Section 8.04(b) and (B) any Common Stock included in such dividend or
distribution shall not be deemed outstanding “at 5:00 p.m., New York City time, on the Trading Day
immediately preceding the record for such dividend or distribution or the effective date of such
share split or combination” within the meaning of Section 8.04(a) or “at 5:00 p.m., New York City
time, on the Trading Day immediately preceding the record date for such distribution” within the
meaning of Section 8.04(b).


          (d) In case the Company shall pay any cash dividends or distributions to all or substantially
all holders of Common Stock (other than dividends or distributions made in connection with the
Company’s liquidation, dissolution or winding-up or in respect of events to which Section 8.06
applies), then the Conversion Rate will be increased based on the following formula:





31









 







	 	 	 	 	 	 	 	 	 	 	 

	CR1

	 	=
	 	CR0
	 	x
	 	SP0	 	 
	 	 	 	 	 	 	 
	 	 	 	 	SP0 – C	 	 






     where



	 	 	 	 	 

	CR1

	 	=
	 	the Conversion Rate in effect immediately prior to
the Opening of Business on the record date for
such dividend or distribution;
	 
	 	 	 	 
	CR0

	 	=
	 	the Conversion Rate in effect at 5:00 p.m., New
York City time, on the Trading Day immediately
preceding the record date for such distribution;
	 
	 	 	 	 
	SP0

	 	=
	 	the average of the Last Reported Sale Prices of
the Common Stock over the ten consecutive Trading
Day period ending on the Trading Day immediately
preceding the record date for such distribution;
and
	 
	 	 	 	 
	C

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





          Such adjustment shall become effective immediately prior to the Opening of Business on the
record date for such dividend or distribution.


          If any such dividend or distribution described in this Section 8.04(d) is declared but not
paid or made, the adjusted Conversion Rate shall be readjusted to be the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared.


          For the avoidance of doubt, for purposes of this Section 8.04(d), 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
this Section 8.04(d), references in this Section 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 number 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.


          (e) In case the Company or any of its Subsidiaries makes a payment in respect of a tender
offer or exchange offer for 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, then the Conversion Rate shall be
increased based on the following formula:




	 	 	 	 	 	 	 	 	 	 	 

	CR1

	 	=
	 	CR0
	 	x
	 	AC + ( SP1 x OS1 )
	 	 
	 	 	 	 	 	 	 
	 	 	 	 	OS0 × SP1	 	 






32









 






     where



	 	 	 	 	 

	CR1

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

	 	=
	 	the Conversion Rate in effect at 5:00 p.m., New
York City time, on the day such tender offer or
exchange offer expires;
	 
	 	 	 	 
	AC

	 	=
	 	the aggregate value of all cash and any other
consideration (as determined by the Board of
Directors or a committee thereof) paid or payable
for shares purchased in such tender or exchange
offer;
	 
	 	 	 	 
	SP1

	 	=
	 	the average of the Last Reported Sale Prices of
Common Stock over the ten consecutive Trading Day
period commencing on, and including, the Trading
Day next succeeding the date such tender or
exchange offer expires (the “Averaging Period”);
	 
	 	 	 	 
	OS1

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





          Such adjustment shall become effective immediately prior to the Opening of Business on the day
following the last day of the Averaging Period; provided that in respect of any conversion within
the ten trading days following the commencement of the Averaging Period, references within this
Section 8.04(e) to ten days shall be deemed replaced with such lesser number of trading days as
have elapsed during such Averaging Period in determining the applicable Conversion Rate.


          (f) For purposes of this Section 8.04, the term “record date” shall mean, with respect to any
dividend, distribution or other transaction or event in which the holders of shares of Common Stock
have the right to receive any cash, securities or other property or in which the shares of Common
Stock (or other applicable security) are exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of shareholders of the Company
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).


          (g) All calculations and other determinations under this Article VIII shall be made by the
Company in accordance with Section 10.04 hereof 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. No adjustment
shall be made for the Company’s issuance of Common Stock or any securities convertible into or
exchangeable for Common Stock, or the right to purchase Common Stock or such convertible or
exchangeable securities, other than as provided in this Section 8.04. No



33









 








adjustment shall be made to the Conversion Rate unless such adjustment would require a change
of at least 1% in the Conversion Rate then in effect at such time. The Company shall carry-forward
any adjustments that are less than 1% of the Conversion Rate, take such carried-forward adjustments
into account in any subsequent adjustment, and make such carried forward adjustments, regardless of
whether the aggregate adjustment is less than 1%, (i) annually on the anniversary of the first date
of issue of the Notes and otherwise (ii)(1) upon a conversion of the Notes by a Holder or (2) prior
to any Covenant Breach Repurchase Date, Specified Date Repurchase Date or Fundamental Change
Repurchase Date, unless such adjustment has already been made.



          (h) Whenever the Company adjusts the Conversion Rate as herein provided, the Company shall
issue a press release through Business Wire containing the relevant information and make this
information available on the Company’s website or through another public medium as the Company may
use at that time.



     Section 8.05 Shares to be Fully Paid. Subject to Section 8.03(c), the Company shall
provide, free from preemptive rights, sufficient Common Stock to provide for conversion of the
Notes from time to time as such Notes are presented for conversion.



     Section 8.06 Effect of Reclassification, Consolidation, Merger or Sale.


          (a) If the Company:




     (i) reclassifies or changes its Common Stock (other than changes resulting from
a subdivision or combination); or




     (ii) consolidates or merges with or into any Person or sells, leases,
transfers, conveys or otherwise disposes of all or substantially all of its assets
and those of its Subsidiaries taken as a whole to another Person;



and in either case holders of Common Stock receive stock, other securities or other property or
assets (including cash or any combination thereof) with respect to or in exchange for their Common
Stock (any such event, a “Merger Event”), then from and after the effective date of such Merger
Event, the Company or the successor or purchasing Person, as the case may be, shall execute with
the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force
at the date of execution of such supplemental indenture) providing that at and after the effective
time of such Merger Event, each outstanding Note will, without the consent of Holders of the Notes,
become convertible in accordance with the Indenture into the consideration the holders of Common
Stock received in such reclassification, change, consolidation, merger, sale, lease, transfer,
conveyance or other disposition (such consideration, the “Reference Property”). If the transaction
causes 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 shareholder election), the Reference
Property into which the Notes will become convertible will be deemed to be the kind and amount of
consideration elected to be received by a majority of Common Stock which voted for such an election
(if electing between two types of consideration) or a plurality of Common Stock that voted for such
an election (if electing between more than two types of consideration), as the case may be. The
Company shall not




34









 








become a party to any such Merger Event unless its terms are consistent with this Section 8.06 in
all material respects.



          (b) The Company shall cause notice of the execution of such supplemental indenture to be
mailed to each Holder, at the address of such Holder as it appears on the register of the Notes
maintained by the Security Registrar, within 20 calendar days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of such supplemental indenture. The
above provisions of this Section 8.06 shall similarly apply to successive reclassifications,
changes, consolidations, mergers, combinations, sales and conveyances. If this Section 8.06 applies
to any Merger Event, Section 8.04 shall not apply.


          This Section 8.06 shall not affect the right of a Holder of Notes to convert its Notes prior
to the Merging Event.



     Section 8.07 Voluntary Increases of Conversion Rate. The Company shall, to the extent
permitted by law and subject to the applicable rules of the Nasdaq, increase the Conversion Rate of
the Notes by any amount for a period of at least 20 calendar days if the Board of Directors of the
Company determine that such increase would be in the Company’s best interest. The Company may also
(but is not required to) increase the Conversion Rate to avoid or diminish income tax to Holders of
Common Stock or rights to purchase the Company’s Common Stock in connection with a dividend or
distribution of shares (or rights to acquire shares) or similar event.



     Section 8.08 Notice to Holders Prior to Certain Actions.



     In case:




     (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 8.04; or




     (b) the Company shall authorize the granting to all of the holders of its Common Stock
of rights, warrants, or convertible securities to subscribe for or purchase any share of any
class or any other rights, warrants, or convertible securities;




     (c) of any reclassification of Common Stock (other than a subdivision or combination of
the 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 shareholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company for which approval
of any shareholders of the Company is required; or




     (d) of the voluntary or involuntary dissolution, liquidation or winding-up of the
Company,




the Company shall cause to be filed with the Trustee and to be mailed to each Noteholder at
its address appearing on the Security Register as promptly as possible but in any event at
least fifteen (15) days prior to the applicable date specified in clause (x) or (y) below,



35









 







as the case may be, a notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution or rights, warrants, or convertible securities, or,
if a record is not to be taken, the date as of which the holders of Common Stock of record
to be entitled to such dividend, distribution or rights are to be determined, or (y) the
date on which such reclassification, consolidation, merger, sale, 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 convert 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 8.09 Shareholder Rights Plans.


          (a) To the extent that any future shareholders’ rights plan adopted by the Company is in
effect upon conversion of the Notes into Common Stock, Holders shall receive, in addition to any
Common Stock issuable upon such conversion, the rights under the applicable rights agreement unless
the rights have separated from the Common Stock at the time of conversion of the Notes, in which
case, the Conversion Rate will be adjusted as if the Company distributed to all holders of its
Common Stock shares of its Capital Stock, evidences of indebtedness or assets as described in
Section 8.04(c), subject to readjustment in the event of the expiration, termination or redemption
of such rights.


          (b) Except in the case of Spin-Offs, in cases where the then fair market value (as so
determined) of the portion of the Distributed Property so distributed applicable to one share of
Common Stock is equal to or greater than SP0 as set forth above or if SP0
exceeds the fair market value of the Distributed Property by less than $1.00, rather than being
entitled to an adjustment in the conversion price, the Holder of Notes will be entitled to receive
upon conversion, in addition to Common Stock, the kind and amount of Distributed Property
comprising the distribution that such Holder would have received if such Holder had converted such
Notes immediately prior to the record date for determining the stockholders entitled to receive the
distribution.



ARTICLE IX:




REPURCHASE OF NOTES AT OPTION OF HOLDERS



     Section 9.01 Repurchase Right of Holders Upon Breach of Certain Financial Covenants.


          (a) If the Company breaches any of the covenants set forth in Section 4.04, then each
Noteholder shall have the right, at such Holder’s option, to require the Company to repurchase up
to 50% in aggregate principal amount of such Holder’s Notes or any portion thereof that is a
multiple of $1,000 principal amount, for cash on the Business Day after the Close of Business on
the date (the “Covenant Breach Repurchase Date”) specified by the Company that is not less than
twenty (20) Business Days and not more than thirty-five



36









 








(35) Business Days after the date of the Covenant Breach Company Notice (as defined below) at a
repurchase price equal to 110% of the principal amount thereof, together with accrued and unpaid
interest thereon (including Additional Interest, if any) to, but excluding, the Covenant Breach
Repurchase Date (the “Covenant Breach Repurchase Price”); provided, however, if the Covenant Breach
Repurchase Date is after a Record Date and on or prior to the corresponding Interest Payment Date,
the accrued and unpaid interest (including Additional Interest, if any) will be paid on the
Covenant Breach Repurchase Date to the Holder of record on the Record Date.



          (b) On or before the twentieth (20th) calendar day after any breach by the Company
of the financial covenants set forth in Section 4.04, the Company shall provide to all Holders of
record of the Notes as of the date of the breach at their addresses shown in the Security Register
(and to beneficial owners to the extent required by applicable law) and the Trustee and Paying
Agent a written notice (the “Covenant Breach Company Notice”) of the occurrence of such breach and
of the repurchase right at the option of the Holders arising as a result thereof. Such mailing
shall be by first-class mail. Simultaneously with providing such Covenant Breach Company Notice,
the Company shall publish a notice containing the information included therein once in a newspaper
of general circulation in New York City or publish such information on the Company’s website or
through such other public medium as the Company may use at such time. Each Covenant Breach Company
Notice shall specify:




     (i) the financial covenant that has been breached;




     (ii) the date of the breach;




     (iii) that the Holder must exercise the repurchase right prior to the Close of
Business on the Covenant Breach Repurchase Date;




     (iv) the Covenant Breach Repurchase Price;




     (v) the Covenant Breach Repurchase Date;




     (vi) the name and address of the Paying Agent;




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




     (viii) 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
Noteholders’ repurchase rights or affect the validity of the proceedings for the repurchase of the
Notes pursuant to this Section 9.01.


          At the Company’s request, the Trustee shall give the Covenant Breach Company Notice in the
Company’s name and at the Company’s expense; provided that the Company make such request at least
three Business Days prior to the date by which such Covenant Breach



37









 








Company Notice is to be given to the Holders of the Notes (it being understood that the
Company will prepare such notice).




     Section 9.02 Repurchase Right of Holders On Specified Date.


          (a) On February 15, 2014, each Noteholder 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 a
multiple of $1,000 principal amount, for cash on such date (the “Specified Date Repurchase Date”)
at a repurchase price equal to 100% of the principal amount thereof, together with accrued and
unpaid interest thereon (including Additional Interest, if any) to, but excluding, the Specified
Date Repurchase Date (the “Specified Date Repurchase Price”); provided, however, the accrued and
unpaid interest (including Additional Interest, if any) will be paid on the Specified Date
Repurchase Date to the Holder of record on the Record Date.


          (b) On or before the twentieth (20th) Business Day before the Specified Date
Repurchase Date, the Company shall provide to all Holders of record of the Notes at their addresses
shown in the Security Register (and to beneficial owners to the extent required by applicable law)
and the Trustee and Paying Agent a written notice (the “Specified Date Company Notice”) of the
repurchase right at the option of the Holders. Such mailing shall be by first-class mail.
Simultaneously with providing such Specified Date Company Notice, the Company shall publish a
notice containing the information included therein once in a newspaper of general circulation in
New York City or publish such information on the Company’s website or through such other public
medium as the Company may use at such time. Each Specified Date Company Notice shall specify:




     (i) that the Holder must exercise the repurchase right prior to the Close of
Business on the Specified Date Repurchase Date;




     (ii) the Specified Date Repurchase Price;




     (iii) the Specified Date Repurchase Date;




     (iv) the name and address of the Paying Agent;




     (v) that the Notes with respect to which a Repurchase Notice has been delivered
by a Holder may be converted only if the Holder withdraws the applicable Repurchase
Notice in accordance with the terms of the Indenture; and




     (vi) 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
Noteholders’ repurchase rights or affect the validity of the proceedings for the repurchase of the
Notes pursuant to this Section 9.02.


          At the Company’s request, the Trustee shall give the Specified Date Company Notice in the
Company’s name and at the Company’s expense; provided that the Company make such request at least
three Business Days prior to the date by which such Specified Date



38









 








Company Notice is to be given to the Holders of the Notes (it being understood that the
Company will prepare such notice).




     Section 9.03 Repurchase Right of Holders Upon a Fundamental Change.


          (a) If a Fundamental Change occurs at any time prior to the Maturity Date, then each
Noteholder 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 a multiple of $1,000 principal amount, for
cash on the Business Day following the Close of Business on the date (the “Fundamental Change
Repurchase Date”) specified by the Company that is not less than twenty (20) Business Days and not
more than thirty-five (35) Business Days after the date of the Fundamental Change Company Notice
(as defined below) at a repurchase price equal to 100% of the principal amount thereof, together
with accrued and unpaid interest thereon (including Additional Interest, if any) to, but excluding,
the Fundamental Change Repurchase Date (the “Fundamental Change Repurchase Price”); provided,
however, if the Fundamental Change Repurchase Date is after a Record Date and on or prior to the
corresponding Interest Payment Date, the accrued and unpaid interest (including Additional
Interest, if any) will be paid on the Fundamental Change Repurchase Date to the Holder of record on
the Record Date.


          (b) Not later than the fifth (5th) calendar day after the occurrence of a
Fundamental Change, the Company shall provide to all Holders of record of the Notes as of the date
of the Fundamental Change at their addresses shown in the Security Register (and to beneficial
owners to the extent required by applicable law) and the Trustee and Paying Agent a written notice
(the “Fundamental Change Company Notice”) of the occurrence of such Fundamental Change and of the
repurchase right 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 Company Notice, the Company
shall publish a notice containing the information included therein once in a newspaper of general
circulation in New York City or publish such information on the Company’s website or through such
other public medium as the Company may use at such time. Each Fundamental Change Company Notice
shall specify:




     (i) the events causing the Fundamental Change;




     (ii) the date of the Fundamental Change;




     (iii) if such Fundamental Change Company Notice is delivered prior to the
occurrence of a Fundamental Change pursuant to a definitive agreement giving rise to
a Fundamental Change, that the offer is conditioned on the occurrence of such
Fundamental Change;




     (iv) that the Holder must exercise the repurchase right prior to the Close of
Business on the Fundamental Change Repurchase Date;




     (v) the Fundamental Change Repurchase Price;




     (vi) the Fundamental Change Repurchase Date;




39











 






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




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




     (ix) that the Notes with respect to which a Repurchase Notice has been
delivered by a Holder may be converted only if the Holder withdraws the applicable
Repurchase Notice in accordance with the terms of the Indenture; and




     (x) 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
Noteholders’ repurchase rights or affect the validity of the proceedings for the repurchase of the
Notes pursuant to this Section 9.03.



          At the Company’s request, the Trustee shall give the Fundamental Change Company Notice in the
Company’s name and at the Company’s expense; provided that the Company make such request at least
three Business Days prior to the date by which such Fundamental Change Company Notice is to be
given to the Holders of the Notes (it being understood that the Company will prepare such notice).




	 	 	Section 9.04 Procedures Upon Exercise of a Repurchase Right.





          (a) Repurchases of Notes under this Article IX shall be made, at the option of the Holder
thereof, upon delivery to the Trustee (or other Paying Agent appointed by the Company) by a Holder
of a duly completed notice in one of the forms, as applicable, attached hereto as Exhibit
C, Exhibit D and Exhibit E (each, a “Repurchase Notice”) at any time after the
date of the Covenant Breach Company Notice, the Specified Date Company Notice or the Fundamental
Change Company Notice, as applicable, until 5:00 p.m., New York City Time, on the Covenant Breach
Repurchase Date, the Specified Date Repurchase Date or the Fundamental Change Repurchase Date, as
applicable (together with the Notes to be repurchased, if certificated Notes have been issued).



          (b) The Repurchase Notice shall state:




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




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




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




     (iv) in the case of a Repurchase Notice delivered in connection with the
Covenant Breach Repurchase Date, the aggregate amount of Notes held by such



40









 







Holder and a certification that the Notes tendered for repurchase do not exceed
50% in the aggregate principal amount of such Holder’s Notes.


provided, however, that if the Notes are not in certificated form, the Repurchase Notice must
comply with appropriate procedures of the Depositary. The Trustee shall have no duty to verify the
accuracy of any information contained in a Repurchase Notice, including without limitation, any
certification from a Holder regarding their aggregate holdings provided in connection with a
Covenant Breach Repurchase Date.




          Any repurchase by the Company contemplated pursuant to the provisions of this Article IX shall
be consummated by the delivery of the consideration to be received by the Holder promptly following
the later of (i) the Covenant Breach Repurchase Date, the Specified Date Repurchase Date or the
Fundamental Change Repurchase Date, as applicable, and (ii) the time of the book-entry transfer or
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 Repurchase Notice or written notice of withdrawal thereof in accordance
with the provisions of Section 9.04(c).



          Any Note that is to be repurchased only in part shall be surrendered to the Trustee (with, if
the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in
a 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.



          (c) A Repurchase Notice may be withdrawn by delivering a written notice of withdrawal to the
Trustee (or other Paying Agent appointed by the Company) at any time prior to 5:00 p.m., New York
City time, on the Covenant Breach Repurchase Date, the Specified Date Repurchase Date or the
Fundamental Change Repurchase Date, as applicable, specifying:




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




     (ii) the principal amount, if any, of such Notes that remains subject to the
original Repurchase Notice; and




     (iii) if certificated Notes have been issued, the certificate numbers of the
withdrawn Notes; and


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




          The Paying Agent will promptly return to the respective Holders thereof any certificated Notes
with respect to which a Repurchase Notice has been withdrawn in compliance with the provisions of
this Section 9.04(c). If the Notes are not in certificated form, such return



41









 







must comply with the appropriate procedures of the Depositary. If a Repurchase Notice is given
and then subsequently withdrawn in accordance with this Section 9.04(c), then the Company shall not
be obligated to repurchase any Notes listed in such Repurchase Notice.



          (d) On or prior to 11:00 a.m. (local time in the City of New York) on the Business Day
following the Covenant Breach Repurchase Date, the Specified Date Repurchase Date or the
Fundamental Change Repurchase Date, as applicable, the Company will 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 in accordance with the Indenture an amount of money or
securities sufficient to repurchase as of the Covenant Breach Repurchase Date, the Specified Date
Repurchase Date or the Fundamental Change Repurchase Date, as applicable, all of the Notes to be
repurchased as of such date at the Covenant Breach Repurchase Price, the Specified Date Repurchase
Price or the Fundamental Change Repurchase Price, as applicable. 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 Close of Business on the Covenant
Breach Repurchase Date, the Specified Date Repurchase Date or the Fundamental Change Repurchase
Date, as applicable, will be made promptly after the later of (x) the Covenant Breach Repurchase
Date, the Specified Date Repurchase Date or the Fundamental Change Repurchase Date, as applicable,
with respect to such Note (provided the Holder has satisfied the conditions to the payment of the
Covenant Breach Repurchase Price, the Specified Date Repurchase Price or the Fundamental Change
Repurchase Price, as applicable, in this Article IX), 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 Article IX by mailing checks for the amount payable
to the Holders of such Notes entitled thereto as they shall appear in the Security Register (in the
case of certificated Notes) or by wire transfer of immediately available funds to the account of
the Depositary or its nominee (if the Notes are not in certificated form). The Trustee shall,
promptly after such payment return to the Company any funds in excess of the Covenant Breach
Repurchase Price, the Specified Date Repurchase Price or the Fundamental Change Repurchase Price,
as applicable.



          (e) If the Trustee (or other Paying Agent appointed by the Company) holds cash sufficient to
repurchase immediately following the Covenant Breach Repurchase Date, the Specified Date Repurchase
Date and Fundamental Change Repurchase Date all the Notes or portions thereof that are to be
purchased as of the Business Day following such date, as applicable, then as of such repurchase
date:




     (i) such Notes will cease to be Outstanding,




     (ii) interest (including Additional Interest, if any) will cease to accrue on
such Notes, whether or not a book-entry transfer of the Notes has been made or the
Notes have been delivered to the Trustee or Paying Agent, as the case may be, and




     (iii) all other rights of the Holders of such Notes will terminate other than
the right to receive the Covenant Breach Repurchase Price, the Specified



42









 







Date Repurchase Price or the Fundamental Change Repurchase Price, as
applicable, upon delivery or transfer of such Notes.



          (f) In connection with any repurchase, the Company shall, to the extent applicable:




     (i) comply with the provisions of Rule 13e-4 of the Exchange Act and any other
tender offer rules under the Exchange Act that may be applicable at the time of the
offer to repurchase the Notes;




     (ii) file a Schedule TO or any other schedule required in connection with any
offer by the Company to repurchase the Notes; and




     (iii) comply with all other federal and state securities laws in connection
with any offer by the Company to repurchase the Notes.



          (g) The Company may arrange for a third party to purchase any Notes for which it receives a
valid Repurchase Notice that is not withdrawn, in the manner and otherwise in compliance with the
requirements set forth in the terms of the Notes applicable to the repurchase right with respect to
the Notes. If a third party purchases any Notes under these circumstances, then interest will
continue to accrue on those Notes and those Notes will continue to be outstanding after the
repurchase date and will be fungible with all other Notes then outstanding. The third party
subsequently may resell those purchased Notes to other investors. The Company shall provide
written notice to the Trustee if a third party purchases the Notes under these circumstances.



     Section 9.05 No Payment Following Acceleration of the Notes. There shall be no
purchase of any Notes pursuant to this Article IX if the principal amount of the Notes has been
accelerated, and such acceleration has not been rescinded on or prior to the Covenant Breach
Repurchase Date, the Specified Date Repurchase Date or the Fundamental Change Repurchase Date, as
applicable. The Trustee (or other Paying Agent appointed by the Company) will promptly return to
the respective Holders thereof any certificated Notes held by it following acceleration of the
Notes and shall deem canceled any instructions for book-entry transfer of the Notes in compliance
with the procedures of the Depositary, in which case, upon such return and cancellation, the
Repurchase Notice with respect thereto shall be deemed to have been withdrawn.



     Section 9.06 Compliance with Tender Offer Rules. In connection with any offer to
purchase Notes under Article IX hereof, the Company shall, in each case if required, (a) comply
with Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act that may then
be applicable, (b) file a Schedule TO or any other required schedule under the Exchange Act and (c)
otherwise comply with all federal and state securities laws so as to permit the rights and
obligations under Article IX to be exercised in the time and in the manner specified in Article IX.



43









 





ARTICLE X:




MISCELLANEOUS PROVISIONS



     Section 10.01 Ratification of Base Indenture. Except as expressly modified or amended
hereby, the Base Indenture continues in full force and effect and is in all respects confirmed,
ratified and preserved and the provisions thereof shall be applicable to the Notes and this
Supplemental Indenture.



     Section 10.02 Governing Law. The Indenture, including the Supplemental Indenture, and
the Notes issued hereunder shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the principles of conflict of laws.


Section 10.03 Counterparts. This instrument may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original, but a complete set of which, when
taken together, shall together constitute but one and the same instrument, and shall become
effective when one or more counterparts have been signed by each party hereto and delivered to the
other parties. Facsimile and pdf signature shall be deemed original signatures.




     Section 10.04 Calculations. Except as otherwise provided in this Supplemental
Indenture, the Company shall be responsible for making all calculations called for under the Notes.
These calculations include, but are not limited to, determinations of the Last Reported Sale Price
of Common Stock, accrued interest payable on the Notes and the Conversion Rate and Conversion
Price. The Company or its agents shall make all these calculations in good faith and, absent
manifest error, such calculations will be final and binding on Holders of the Notes. The Company
shall provide a schedule of these calculations to each of the Trustee and the Conversion Agent, and
each of the Trustee and Conversion Agent is entitled to rely upon the accuracy of the Company’s
calculations without independent verification. The Trustee will forward these calculations to any
Holder of the Notes upon the written request of that Holder.



     Section 10.05 Non-Business Day. Section 1.15 of the Base Indenture shall also apply
to any Covenant Breach Repurchase Date, Specified Date Repurchase Date, Fundamental Change Purchase
Date, Redemption Date or Conversion Date in respect of the Notes.



44









 





     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed by their respective officers hereunto duly authorized, all as of the day and year first
above written.



	 	 	 	 	 
	 	AVATAR HOLDINGS INC.

 	 
	 	By:  	/s/
Patricia K. Fletcher 	 
	 	 	Name:  	Patricia K. Fletcher 	 
	 	 	Title:  	Executive Vice President 	 
	 
	 	WILMINGTON TRUST FSB,

as Trustee

 	 
	 	By:  	/s/
Joseph P O’Donnell 	 
	 	 	Name:  	Joseph P O’Donnell 	 
	 	 	Title:  	Vice President 	 
	 








45









 








Schedule A




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Effective Date	 	Stock Price
	 
	 
	 	$	19.97	 	 	$	25.00	 	 	$	30.00	 	 	$	35.00	 	 	$	40.00	 	 	$	45.00	 	 	$	50.00	 	 	$	55.00	 	 	$	60.00	 	 	$	65.00	 	 	$	70.00	 
	February 4, 2011
	 	 	16.7418	 	 	 	11.2630	 	 	 	7.8820	 	 	 	5.9145	 	 	 	4.6855	 	 	 	3.8651	 	 	 	3.2837	 	 	 	2.8494	 	 	 	2.5105	 	 	 	2.2370	 	 	 	2.0103	 
	February 15, 2012
	 	 	16.7418	 	 	 	9.8082	 	 	 	6.3612	 	 	 	4.4839	 	 	 	3.4005	 	 	 	2.7322	 	 	 	2.2894	 	 	 	1.9746	 	 	 	1.7370	 	 	 	1.5488	 	 	 	1.3941	 
	February 15, 2013
	 	 	16.7418	 	 	 	8.5068	 	 	 	4.7897	 	 	 	2.9189	 	 	 	1.9731	 	 	 	1.4816	 	 	 	1.2061	 	 	 	1.0329	 	 	 	0.9102	 	 	 	0.8150	 	 	 	0.7367	 
	February 15, 2014
	 	 	16.7418	 	 	 	7.2019	 	 	 	3.4392	 	 	 	1.1152	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 
	February 15, 2015
	 	 	16.7418	 	 	 	6.6667	 	 	 	2.6633	 	 	 	0.7801	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 
	February 15, 2016
	 	 	16.7418	 	 	 	6.6667	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 	 	 	0.0000	 






46









 





EXHIBIT A




[FORM OF FACE OF NOTE]



[Include only for Global Notes]




     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.



A-1









 





AVATAR HOLDINGS INC.




7.50% Senior Convertible Notes due 2016



			
	 	 	 
	No. _______
	 	$100,000,000






CUSIP No. 053494 AG5




     Avatar Holdings Inc., a Delaware corporation (herein called the “Company,” which term includes
any successor corporation under the Indenture referred to on the reverse hereof), for value
received hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of One
Hundred Million Dollars ($100,000,000) or such other principal amount as shall be set forth on the
Schedule I hereto on February 15, 2016, unless earlier converted, repurchased or redeemed.



     This Note shall bear interest at the rate of 7.50% per year from February 4, 2011, or from the
most recent date to which interest had been paid or provided. Except as otherwise provided in the
Indenture, interest is payable semi-annually in arrears on each February 15 and August 15,
commencing August 15, 2011, to Holders of record at the Close of Business on the preceding February
1 and August 1, respectively. Interest payable on each Interest Payment Date shall equal the amount
of interest accrued from and including the immediately preceding Interest Payment Date (or from and
including February 4, 2011, if no interest has been paid hereon) to but excluding such Interest
Payment Date. To the extent lawful, payments of principal or interest (including Additional
Interest, if any) on the Notes that are not made when due will accrue interest at the annual rate
of 1% above the then applicable interest rate borne by the Notes from the required payment date in
accordance with the provisions of the Indenture.



     Payment of the principal and interest on, or Repurchase Price or Redemption Price of, this
Note will be made at the office or agency of the Company maintained for that purpose, which shall
initially be the Corporate Trust Office, or elsewhere as provided in the Indenture, in such coin or
currency of the United States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that the Company shall make payments of accrued and
unpaid interest on (i) any Note in global form, in immediately available funds in accordance with
the procedures required by the Depositary; (ii) any certificated Note having a principal amount of
less than $2,000,000 by check mailed to the address of the Holder of such Note as such address
shall appear in the Security Register or (iii) any certificated Note having a principal amount of
$2,000,000 or more, by wire transfer in immediately available funds at the written request of the
Holder of such Note duly delivered in writing to the Trustee and the Paying Agent (if different
from the Trustee) at least five Business Days prior to the relevant Interest Payment Date.



     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 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.



A-2









 





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



     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.



[Remainder of page intentionally left blank]








A-3









 








     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by the
undersigned officer.



	 	 	 	 	 
	 	AVATAR HOLDINGS INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



A-4









 






TRUSTEE’S CERTIFICATE OF AUTHENTICATION:





     This is one of the Notes of the series designated therein referred to in the within-mentioned
Indenture.



	 	 	 	 	 
	WILMINGTON TRUST FSB,

as trustee

 	 	 
	BY:  	 	 	 
	 	Authorized Officer 	 	 
	 	 	 	 



A-5









 






	 	 	 	 	 



[FORM OF REVERSE OF NOTE]




Avatar Holdings Inc.



7.50% Senior Convertible Notes due 2016




     This Note is one of a duly authorized issue of Securities of the Company, designated as its
7.50% Senior Convertible Notes due 2016 (herein called the “Notes”), issued under and pursuant to
an Indenture dated as of February 4, 2011 (herein called the “Base Indenture”), as supplemented by
the First Supplemental Indenture, dated as of February 4, 2011 (herein called the “Supplemental
Indenture” and collectively with the Base Indenture, the “Indenture”), between the Company and
Wilmington Trust FSB (herein called the “Trustee”), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the Company, and the Holders
of the Notes. Additional Notes may be issued in an unlimited aggregate principal amount, subject to
certain conditions specified in the Indenture. Capitalized terms used but not defined in this Note
shall have the meanings ascribed to them in the Indenture.



     In case an Event of Default, as defined in the Indenture, shall have occurred and be
continuing, the principal of and interest (or the repurchase price, as applicable), on all Notes
may be declared, and upon said declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.



     Subject to the terms and conditions of the Indenture, the Company will make all payments and
deliveries in respect of the Covenant Breach Repurchase Price, Fundamental Change Repurchase Price,
Specified Date Repurchase Price, Redemption Price and the principal amount on the Maturity Date, as
the case may be, to the Holder who surrenders a Note to a Paying Agent to collect such payments in
respect of the Note. The Company will pay cash amounts in money of the United States that at the
time of payment is legal tender for payment of public and private debts.



     The Indenture contains provisions permitting the Company and the Trustee in certain
circumstances, without the consent of the Holders of the Notes, and in other circumstances, with
the consent of the Holders of not less than a majority in principal amount of the Notes at the time
Outstanding, evidenced as in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of
any supplemental indenture or modifying in any manner the rights of the Holders of the Notes;
provided, however, that no such supplemental indenture shall make any of the changes set forth in
Section 6.02 of the Supplemental Indenture and Section 7.02 of the Base Indenture, without the
consent of each Holder of an Outstanding Note affected thereby. It is also provided in the
Indenture that, prior to any declaration accelerating the maturity of the Notes, the Holders of a
majority in principal amount of the Notes at the time Outstanding may on behalf of the Holders of
all of the Notes waive any past default or Event of Default under the Indenture and its
consequences except as provided in the Indenture. Any such consent or waiver by the Holder of this
Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder
and upon all future Holders and owners of this Note and any Notes which may



A-6









 




be issued in exchange or substitution hereof, irrespective of whether or not any notation
thereof is made upon this Note or such other Notes.




     No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay the
principal of and accrued and unpaid interest on or the Repurchase Price or Redemption Price of, as
applicable, this Note at the place, at the respective times, at the rate and in the lawful money
herein prescribed.



     The Notes are issuable in registered form without coupons in denominations of $1,000 principal
amount and integral multiples thereof. At the office or agency of the Company referred to on the
face hereof, and in the manner and subject to the limitations provided in the Indenture, without
payment of any service charge but with payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of transfer or exchange
of Notes (except as otherwise provided in the Base Indenture), Notes may be exchanged for a like
aggregate principal amount of Notes of other authorized denominations.



     Subject to and upon compliance with the provisions of the Indenture, the Holder may surrender
for conversion all or any portion of this Note that is in an integral multiple of $1,000. Upon
conversion, the Holder shall be entitled to receive the consideration specified in the Indenture.
No fractional share of Common Stock shall be issued upon conversion of a Note. Instead, the Company
shall pay cash in lieu of such fractional share of Common Stock as provided in the Indenture. The
initial Conversion Rate shall be 33.3333 shares of Common Stock per $1,000 principal amount of
Notes, subject to adjustment in accordance with the provisions of the Indenture. If a Holder
converts all or a part of this Note in connection with the occurrence of certain Fundamental Change
transactions, the Conversion Rate shall be increased in the manner and to the extent described in
the Indenture.



     The Company must comply with certain financial maintenance covenants as set forth in Section
4.04 of the Supplemental Indenture.



     Upon a breach by the Company of any of the financial covenants set forth in Section 4.04 of
the Supplemental Indenture, the Holder has the right, at such Holder’s option, to require the
Company to repurchase up to 50% in aggregate principal amount of such Holder’s Notes or any portion
thereof (in principal amounts of $1,000 or integral multiples thereof) in accordance with the
provisions of the Indenture on the Business Day following the Covenant Breach Repurchase Date at a
price equal to 110% of the principal amount of the Notes such holder elects to require the Company
to repurchase, together with accrued and unpaid interest (including Additional Interest, if any) to
but excluding the Covenant Breach Repurchase Date, except as otherwise provided in the Indenture.
The Company shall mail to all Holders of record of the Notes a notice of the occurrence of a breach
of a covenant and of the repurchase right arising as a result thereof on or before the
20th calendar day after such breach in accordance with the procedures set forth in the
Indenture.



     On February 15, 2014, the Holder has the right, at such Holder’s option, to require the
Company to repurchase all of such Holder’s Notes or any portion thereof (in principal amounts of
$1,000 or integral multiples thereof) in accordance with the provisions of the Indenture on the



A-7









 




Business Day following the Specified Date Repurchase Date at a price equal to 100% of the principal
amount of the Notes such holder elects to require the Company to repurchase, together with accrued
and unpaid interest (including Additional Interest, if any) to but excluding the Specified Date
Repurchase Date, except as otherwise provided in the Indenture. The Company shall mail to all
Holders of record of the Notes a notice of the occurrence of the Specified Date Repurchase Date and
of the repurchase right arising as a result thereof not less than 20 Business Days prior to the
Specified Date Repurchase Date in accordance with the procedures set forth in the Indenture.




     Upon the occurrence of a Fundamental Change, the Holder has the right, at such Holder’s
option, to require the Company to repurchase all of such Holder’s Notes or any portion thereof (in
principal amounts of $1,000 or integral multiples thereof) in accordance with the provisions of the
Indenture on the Business Day following the Fundamental Change Repurchase Date at a price equal to
100% of the principal amount of the Notes such holder elects to require the Company to repurchase,
together with accrued and unpaid interest (including Additional Interest, if any) to but excluding
the Fundamental Change Repurchase Date, except as otherwise provided in the Indenture. The Company
shall mail to all Holders of record of the Notes a notice of the occurrence of a Fundamental Change
and of the repurchase right arising as a result thereof at any time following the Company entering
into a definitive agreement that, if consummated, would give rise to a Fundamental Change, but in
any event not later than the fifth (5th) calendar day after the occurrence of a Fundamental Change.



     The Company may, at any time on or after February 15, 2014, at its option, redeem for cash all
or any portion of the Outstanding Notes, but only if the last reported sale price of the Common
Stock of the Company for 20 or more Trading Days in a period of 30 consecutive Trading Days ending
on the Trading Day prior to the date the Company provides the Redemption Notice exceeds 130% of the
Conversion Price in effect on each such Trading Day and certain other conditions set forth in
Section 3.01 of the Supplemental Indenture are met. The Redemption Price will be payable in cash
and will equal 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid
interest (including Additional Interest, if any) to, but excluding, the Redemption Date.



     The Notes will not be entitled to the benefit of any sinking fund.



     Upon due presentment for registration of transfer of this Note at the office or agency of the
Company, which shall initially be the Corporate Trust Office, a new Note or Notes of authorized
denominations for an equal aggregate principal amount will be issued to the transferee in exchange
thereof, subject to the limitations provided in the Indenture, without charge except for any tax,
assessments or other governmental charge imposed in connection with any registration of transfer or
exchange of Notes (except as otherwise set forth in the Base Indenture).



     The Company, the Trustee, any authenticating agent, any Paying Agent, any Conversion Agent and
any Security Registrar may deem and treat the registered Holder hereof as the absolute owner of
this Note (whether or not this Note shall be overdue and notwithstanding any notation of ownership
or other writing hereon), for the purpose of receiving payment hereof, or on account hereof, for
the conversion hereof and for all other purposes, and neither the Company



A-8









 




nor the Trustee nor any other authenticating agent nor any Paying Agent nor any other
Conversion Agent nor any Security Registrar shall be affected by any notice to the contrary. All
payments made to or upon the order of such registered Holder shall, to the extent of the sum or
sums paid, satisfy and discharge liability for monies payable on this Note.




     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 right of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).




A-9











 





Schedule I




Avatar Holdings, Inc.




7.50% Senior Convertible Notes due 2016



     No. ______



Schedule of Exchanges of Interests in the Global Note 




     The following exchanges of a part of this Global Note for an interest in another Global Note
for a Definitive Note or in connection with a Conversion, or exchanges of a part of another Global
Note or Definitive Note for an interest in this Global Note, have been made:



	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Principal Amount	 	 
	 	 	 	 	 	 	of this Global Note	 	 
	 	 	Amount of decrease in	 	Amount of increase in	 	following such	 	Signature of authorized
	Date of Exchange or	 	Principal Amount of	 	Principal Amount	 	decrease	 	officer of Trustee or
	Conversion	 	this Global Note	 	of this Global Note	 	(or increase)	 	Custodian
	 
	 	 
	 	 
	 	 
	 	 
	 
	 	 
	 	 
	 	 
	 	 





A-10









 






Exhibit B




FORM OF CONVERSION NOTICE



To: Avatar Holdings Inc. and Paying Agent




     The undersigned registered owner of this Note hereby exercises the option to convert this
Note, or the portion hereof (which is $1,000 principal amount or an integral multiple thereof)
below designated into shares of Common Stock in accordance with the terms of the Indenture referred
to in this Note, and directs that the shares of Common Stock issuable and deliverable upon such
conversion, together with any check in payment for fractional shares of Common Stock, 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 pay all transfer taxes and duties payable with respect thereto. Any amount
required to be paid to the undersigned on account of interest accompanies this Note.



Dated: ___________




	 	 	 	 	 
	 	 	 
	 	                             
 	 
	 	Signature(s) 	 



	 	 	 	 	 
	 	 
 	 
	 	Signature Guarantee 	 



	 	 	 	 	 
	Signature(s) must be guaranteed by an eligible Guarantor Institution (banks,
stock brokers, savings and loan associations and credit unions) with membership
in an approved signature guarantee medallion program pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended, if shares of Common
Stock is to be issued, or Notes to be delivered, other than to and in the name
of the registered holder.
 	 	 
	 	 	 
	 	 	 
	 	 	 



B-1









 






	 	 	 	 	 
	Fill in for registration of shares of Common Stock if to be issued, and Notes
if to be delivered, other than to and in the name of the registered holder:
 	 	 
	 


(Name)



(Street Address)



(City, State and Zip Code)



Please print name and address




	 	 	 	 	 
	 	Principal amount to be converted (if less
than all): $          ,000



Social Security or Other Taxpayer
Identification Number
 	 



B-2









 






	 	 	 	 	 



Exhibit C




FORM OF COVENANT BREACH REPURCHASE NOTICE





     To: Avatar Holdings Inc. and Paying Agent



     The undersigned registered owner of this Note hereby acknowledges receipt of a notice from
Avatar Holdings Inc. (the “Company”) as to the occurrence of a breach of covenant with respect to
the Company and requests and instructs the Company to repay the portion of the Note up to 50% in
aggregate principal amount (which is $1,000 principal amount or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this Note, to the
registered holder hereof.



Dated: ___________




	 	 	 	 	 
	 	             
 	 
	 	Signature(s) 	 
	 
	 	Social Security or Other Taxpayer
Identification Number:



Principal amount to be repaid: $        ,000.

Total Principal Amount Owned by such Holder: $_______________



NOTICE:



The above signatures of the holder(s) hereof must correspond with
the name as written upon the face of the Note in every particular
without alteration or enlargement or any change whatever.
 	 
	 	 	 



C-1









 






	 	 	 	 	 



Exhibit D




FORM OF SPECIFIED DATE REPURCHASE NOTICE





     To: Avatar Holdings Inc. and Paying Agent



     The undersigned registered owner of this Note hereby acknowledges receipt of a notice from
Avatar Holdings Inc. (the “Company”) as to the repurchase right associated with the Specified Date
and requests and instructs the Company to repay the entire principal amount of this Note, or the
portion thereof (which is $1,000 principal amount or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this Note, to the
registered holder hereof.



Dated: ___________




	 	 	 	 	 
	 	             
 	 
	 	Signature(s):__________________ 	 
	 	 	 
	 	Social Security or Other Taxpayer Identification Number:



Principal amount to be repaid (if less than all): $         ,000



NOTICE:



The above signatures of the holder(s) hereof must correspond with
the name as written upon the face of the Note in every particular
without alteration or enlargement or any change whatever.
 	 
	 	 	 



D-1









 






	 	 	 	 	 



Exhibit E




FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE





     To: Avatar Holdings Inc. and Paying Agent



     The undersigned registered owner of this Note hereby acknowledges receipt of a notice from
Avatar Holdings Inc. (the “Company”) as to the occurrence of a Fundamental Change with respect to
the Company and requests and instructs the Company to repay the entire principal amount of this
Note, or the portion thereof (which is $1,000 principal amount or an integral multiple thereof)
below designated, in accordance with the terms of the Indenture referred to in this Note, to the
registered holder hereof.



Dated: ___________




	 	 	 	 	 
	 	             
 	 
	 	Signature(s) 	 
	 	 	 
	 	Social Security or Other Taxpayer Identification Number:



Principal amount to be repaid (if less than all): $         ,000



NOTICE:



The above signatures of the holder(s) hereof must correspond with
the name as written upon the face of the Note in every particular
without alteration or enlargement or any change whatever.
 	 
	 	 	 
	 	 	 
	 	 	 



E-1









 







Exhibit F




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 Guarantee 	 
	 


Signature(s) must be guaranteed by an eligible Guarantor Institution (banks,
stock brokers, savings and loan associations and credit unions) with membership
in an approved signature guarantee medallion program pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended, if Common Stock is to be
issued, or Notes to be delivered, other than to and in the name of the
registered holder.



NOTICE: The signature on the conversion notice, the option to elect repurchase upon a Fundamental
Change, or the assignment must correspond with the name as written upon the face of the Note in
every particular without alteration or enlargement or any change whatever.





F-1