First Supplemental Indenture

Exhibit 4.2

 

PHOTRONICS, INC.

as Issuer

and

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

as Trustee

 

First Supplemental Indenture

Dated as of September 16, 2009

 

Supplemental to Indenture

Dated as of September 16, 2009

 

5.50% Convertible Senior Notes due 2014

 

TABLE OF CONTENTS

 

 

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FIRST SUPPLEMENTAL INDENTURE, dated as of September 16, 2009, between Photronics, Inc., a Connecticut corporation (the “ Company ”), having its principal office at 15 Secor Road, Brookfield, CT 06804 and The Bank of New York Mellon Trust Company, N.A a national banking association, as Trustee (the “ Trustee ”), having its Corporate Trust Office at 222 Berkeley Street, 2 ^nd Floor, Boston, MA 02116.

RECITALS OF THE COMPANY

WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture, dated as of September 16, 2009 (the “ Base Indenture ”), providing for the issuance from time to time of its debt securities in one or more series;

WHEREAS, Section 901(6) of the Base Indenture provides that the Company and the Trustee may from time to time enter into one or more indentures supplemental thereto to establish the form or terms of Securities of any series as permitted by Sections 201 and 301 thereof;

WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issuance of its 5.50% Convertible Senior Notes due 2014, in an initial aggregate principal amount of $57,500,000;

WHEREAS, the Company proposes by this First Supplemental Indenture to supplement and amend the Base Indenture to provide for the form, terms and other provisions of the Notes as a separate series of Securities to be issued under the Indenture, and to supplement and amend the Base Indenture to provide for provisions that apply only to the Notes (and not to any other series of Securities);

WHEREAS, all acts and things necessary to duly authorize and reserve for issuance shares of Common Stock issuable upon the conversion of the Notes 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, the valid, binding and legal obligations of the Company, and to constitute this First Supplemental Indenture a valid and legally binding agreement of the Company, have been done and performed, and the execution of this First Supplemental Indenture and the issuance of the Notes have in all respects been duly authorized;

NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:

Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Notes:

ARTICLE 1

D EFINITIONS AND O THER P ROVISIONS OF G ENERAL A PPLICATION

Section 1.01 . Definitions. For all purposes of the Base Indenture and this First Supplemental Indenture, except as otherwise expressly provided or unless the context otherwise requires:

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

(ii) any term that is defined in both the Base Indenture and this First Supplemental Indenture shall have the meanings assigned to such term in this First Supplemental Indenture except that the term “ Stated Maturity ” shall have the meaning assigned to it in this Article 1 for purposes of this First Supplemental Indenture, but for purposes of the Base Indenture shall have the meaning assigned to it therein;

(iii) any capitalized term that is used in this First Supplemental Indenture but not defined herein shall have the meaning specified in the Base Indenture;

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

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

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

“ Additional Interest ” means all amounts of additional interest, if any, payable pursuant to Section 3.07(a).

“ Additional Notes ” has the meaning specified in Section 2.03.

“ Additional Shares ” has the meaning specified in Section 4.07.

“ Common Stock ” means the shares of common stock, par value $0.01 per share, of the Company as they exist on the date of this First Supplemental Indenture or any other shares of Capital Stock of the Company into which the Common Stock shall be reclassified or changed, or, in the event of a merger, consolidation or other similar transaction involving the Company that is otherwise permitted hereunder in which the Company is not the surviving corporation, the common stock, common equity interests or depositary shares or other certificates representing common equity interests of such surviving corporation or its direct or indirect parent corporation.

 

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“ Conversion Agent ” means the Trustee or such other office or agency designated by the Company where Notes may be presented for conversion.

“ Conversion Date ” has the meaning specified in Section 4.02(a).

“ Conversion Notice ” has the meaning specified in Section 4.02(a).

“ Conversion Price ” means $1,000 divided by the Conversion Rate, subject to adjustment as set forth herein.

“ Conversion Rate ” means initially 196.7052 shares of Common Stock per $1,000 principal amount of Notes, subject to adjustment as set forth herein.

“ Custodian ” means The Bank of New York Mellon Trust Company, N.A., as custodian with respect to the Notes in global form, or any successor entity.

“ Depositary ” means DTC until a successor Depositary shall have become such pursuant to the applicable provisions of this First Supplemental Indenture, and thereafter “Depositary” shall mean such successor Depositary.

“ DTC ” means The Depository Trust Company.

“ effective date ” has the meaning specified in Section 4.04.

“ Effective Date ” has the meaning specified in Section 4.07(b).

“ Ex-Dividend Date ” means, for the purposes of Section 4.04, the first date on which the shares of Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance or distribution in question.

“ Expiration Date ” has the meaning specified in Section 4.04(e).

“ Expiration Time ” has the meaning specified in Section 4.04(e).

“ Final Prospectus Supplement ” means the final prospectus supplement dated September 10, 2009 relating to the Notes.

“ Fundamental Change ” means the occurrence of any of the following events at any time after the first time that Notes are originally issued under the Indenture:

(1) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act other than the Company, the Subsidiaries of the Company or the employee benefit plans of the Company or its Subsidiaries files a Schedule 13D or Schedule TO (or any successor schedule, form or report) pursuant to the Exchange Act accurately disclosing that such person has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s Capital Stock representing more than 50% of the voting power of all outstanding classes of the Company’s Capital Stock entitled to vote generally in the election of the Company’s directors;

 

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(2) the consummation of any share exchange, consolidation or merger of the Company with or into any other Person pursuant to which Common Stock will be converted into cash, securities, or other property, or the sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions, of the consolidated assets of the Company and its Subsidiaries substantially as an entirety to any “person” (as this term is used in Section 13(d)(3) of the Exchange Act), other than:

(a) any transaction pursuant to which the holders of 50% or more of the total voting power of all shares of the Company’s Capital Stock entitled to vote generally in elections of the Company’s 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 entitled to vote generally in elections of directors of the continuing or surviving person or transferee or the parent thereof immediately after giving effect to such transaction; or

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

(3) the Company’s stockholders approve any plan or proposal for the liquidation or dissolution of the Company; or

(4) the Common Stock (or other common stock into which the Notes are then convertible pursuant to the terms of this First Supplemental Indenture) ceases to be listed on The NASDAQ Global Select Market, The NASDAQ Global Market, The NASDAQ Capital Market or the New York Stock Exchange (or any of their respective successors).

Notwithstanding the foregoing, it shall not be a Fundamental Change and the Holders will not have the right to require the Company to purchase any Notes under Section 5.01 upon the occurrence of any transaction described in clauses (1) or (2) above if at least 90% of the consideration received or to be received by holders of Common Stock (excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights) in connection with the transaction or transactions constituting the Fundamental Change consists of Publicly Traded Securities and, as a result of this transaction or transactions, the Notes become convertible into such Publicly Traded Securities and any other consideration received in connection with such transaction, excluding cash payments for fractional shares.

“ Fundamental Change Company Notice ” has the meaning specified in Section 5.01(b).

“ Fundamental Change Purchase Date ” has the meaning specified in Section 5.01(a).

“ Fundamental Change Purchase Notice ” has the meaning specified in Section 5.01(a).

 

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“ Fundamental Change Purchase Price ” has the meaning specified in Section 5.01(a).

“ GAAP ” means generally accepted accounting principles set forth in FASB Accounting Standards Certification and rules and interpretive releases of the Securities and Exchange Commission under authority of federal securities laws.

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

“ Indenture ” means the Base Indenture, as amended and supplemented by this First Supplemental Indenture and, if further amended or supplemented as herein provided, as so amended and supplemented.

“ Initial Notes ” has the meaning specified in Section 2.03.

“ interest ” means, when used with reference to the Notes, any interest payable under the terms of the Notes, including Additional Interest, if any, payable pursuant to Section 3.07.

“ Interest Payment Date ” means each April 1 and October 1 of each year, beginning April 1, 2010.

“ Last Reported Sale Price ” means, on any Trading Day, the closing sale price per share of the Common Stock (or if no closing sale price is reported, the average of the bid and ask prices of the Common Stock, or, if more than one in either case, the average of the average bid and the average ask prices of the Common Stock) on that Trading Day as reported in composite transactions for the principal United States national or regional securities exchange on which the Common Stock is traded. If the Common Stock is not listed for trading on a United States national or regional securities exchange on the relevant Trading Day, the “Last Reported Sale Price” will be the last quoted bid price per share of Common Stock in the over-the-counter market on the relevant Trading Day as reported by Pink Sheets LLC or a similar organization selected by the Company for this purpose. If the Common Stock is not so quoted, the “Last Reported Sale Price” will be the average of the mid-point of the last bid and ask prices per share for the Common Stock on the relevant date from one nationally recognized independent investment banking firm selected by the Company for this purpose.

“ Make-Whole Fundamental Change ” means any transaction or event that constitutes a Fundamental Change pursuant to clause (1) or (2) of the definition of Fundamental Change (determined after giving effect to any exceptions or exclusions to such definition, but without regard to the exception in subclause 2(a) of the definition of Fundamental Change).

“ Merger Event ” has the meaning specified in Section 4.05.

“ Notes ” has the meaning specified in Section 2.01 hereof and includes any Note or Notes, as the case may be, authenticated and delivered under this First Supplemental Indenture, including any Global Note.

 

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

“ Paying Agent ” means any Person (including the Company) authorized by the Company to pay the principal amount of, and interest on, or the Fundamental Change Purchase Price of any Notes on behalf of the Company. The Bank of New York Mellon Trust Company, N.A., shall initially be the Paying Agent.

“ Publicly Traded Securities ” means shares of common stock which are traded on a United States national securities exchange, or, with respect to a transaction that otherwise would be a Fundamental Change, which will be so traded when issued or exchanged in connection with such transaction.

“ Record Date ” means, for the purposes of Section 4.04, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of stockholders 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), whether or not a Business Day.

“ Reference Property ” has the meaning specified in Section 4.05.

“ Regular Record Date ” means, with respect to the payment of interest on the Notes, the Close of Business on the March 15 or September 15, as the case may be, immediately preceding the relevant Interest Payment Date.

“ Significant Subsidiary ” has the meaning given to such term in Rule 1-02(w) of Regulation S-X under the Securities Act as in effect on the first date that Notes are originally issued under the Indenture.

“ Spin-Off ” has the meaning specified in Section 4.04(c).

“ Stated Maturity ” has the meaning specified in Section 2.04.

“ Stock Price ” has the meaning specified in Section 4.07(b).

“ Trading Day ” means a day during which (i) trading in securities generally occurs on The Nasdaq Global Select Market or, if the Common Stock is not then listed on The Nasdaq Global Select Market, the principal United States national or regional securities exchange on which the Common Stock is then listed or admitted for trading or, if the Common Stock is not then listed or admitted for trading on a United States national or regional securities exchange, on the principal other market on which the Common Stock is then traded, and (ii) a Last Reported Sale Price is available on such securities exchange or market. If the Common Stock is not so listed or traded, “Trading Day” means a Business Day.

“ Valuation Period ” has the meaning set forth in Section 4.04(c).

 

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ARTICLE 2

T HE N OTES

Section 2.01 . Designation of Notes; Establishment of Form. This First Supplemental Indenture provides for a series of Securities titled “ 5.50% Convertible Senior Notes due 2014 ” of the Company (referred to herein as the “ Notes ”), and the form thereof shall be substantially as set forth in Annex A hereto, which is incorporated into and shall be deemed a part of the Indenture, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined by the officers of the Company executing such Notes, as evidenced by their execution of the Notes.

Section 2.02 . Ranking; Senior Securities. The Notes shall be senior Securities, and Article Sixteen of the Base Indenture shall not apply to the Notes.

Section 2.03 . Amount. The Trustee shall initially authenticate and deliver $57,500,000 aggregate principal amount of Notes upon a Company Order for the authentication and delivery of Notes, without any further action by the Company. The Company may, without the consent of the Holders of the Notes, issue additional Notes (“ Additional Notes ”) under the Indenture with the same terms as the Notes initially issued as of the date of this First Supplemental Indenture (the “ Initial Notes ”) in an unlimited principal amount, provided that no Additional Notes shall be issued unless such Additional Notes are fungible with the Notes initially issued under the Indenture for U.S. federal income tax purposes. The Initial Notes and any Additional Notes will be treated as a single series of Securities for all purposes under the Indenture.

Section 2.04 . Stated Maturity. The date on which the principal of the Notes is due and payable, unless earlier converted, accelerated or purchased pursuant to the Indenture, shall be October 1, 2014 (the “ Stated Maturity ”).

Section 2.05 . Interest. The Notes shall bear interest in accordance with the provisions set forth in the form of Note attached as Annex A.

Section 2.06. Redemption; Sinking Fund.

(a) The Notes are not redeemable by the Company prior to Stated Maturity.

(b) There shall be no sinking fund for the retirement of the Notes.

Section 2.07. Form and Denomination; Currency.

(a) The Notes shall be Registered Securities and initially be issued in global form as Global Notes without interest coupons.

(b) Each Note shall be in the denomination of $2,000 and multiples of $1,000 in excess thereof.

 

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(c) All obligations of the Company in respect of principal, interest or any other amount owing shall be payable in United States dollars.

Section 2.08 . Conversion. The Notes shall be convertible in accordance with the provisions set forth in the Notes and this First Supplemental Indenture, including, without limitation, Article 4 hereof.

Section 2.09 . No Defeasance. Article Fourteen of the Base Indenture shall not apply to the Notes.

Section 2.10 . Paying Agent; Conversion Agent. The Company initially appoints the Trustee as Paying Agent and Conversion Agent. The Company may appoint one or more additional Paying Agents and one or more additional Conversion Agents in accordance with the Indenture. The Company shall maintain an office or agency where Notes may be presented for purchase or payment (which shall be the office of the Paying Agent) and an office or agency where Notes may be presented for conversion (which shall be the office of the Conversion Agent).

Section 2.11 . Global Notes; Book Entry Form. So long as the Notes are eligible for book-entry settlement with the Depositary, or unless otherwise required by law, and except as set forth in Section 305 of the Base Indenture, all of the Notes will be represented by one or more Global Notes. A Global Note may not be transferred as a whole or in part except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. Except as provided in Section 305 of the Base Indenture, beneficial owners of a Global Note shall not be entitled to have certificates registered in their names, will not receive or be entitled to receive physical delivery of certificates in definitive form and will not be considered holders of such Global Note. The transfer and exchange of beneficial interests in any such Global Note shall be effected through the Depositary in accordance with the procedures of the Depositary therefor.

ARTICLE 3

A MENDMENTS TO THE B ASE I NDENTURE

Section 3.01 . Provisions Applicable Only to Notes. The provisions contained in this First Supplemental Indenture shall apply to the Notes only and not to any other series of Security issued under the Base Indenture and any covenants provided herein are expressly being included solely for the benefit of the Notes and not for the benefit of any other series of Securities issued under the Base Indenture. These amendments shall be effective for so long as there remain any Notes Outstanding. Any provisions contained in the Base Indenture relating to any Bearer Security, insofar as such provisions pertain to the Notes, shall for purposes of the Indenture be deleted from the Indenture and have no force or effect herein.

 

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Section 3.02 . Additional Events of Default. In addition to the Events of Default set forth in Section 501 of the Base Indenture an Event of Default with respect to the Notes shall also mean any of the following:

(a) failure by the Company to pay the Fundamental Change Purchase Price, when such payment becomes due and payable;

(b) failure by the Company to pay Additional Interest and the continuance of such failure for a period of 30 days;

(c) failure by the Company to comply with its obligation to convert the Notes upon the exercise of a Holder’s conversion right and the continuance of such failure for a period of five days following the scheduled settlement date for such conversion;

(d) failure by the Company to perform or observe any of the covenants or agreements in the First Supplemental Indenture with respect to the Notes (other than a covenant or agreement a default in whose performance is specifically dealt with in Section 3.02(a), Section 3.02(b), Section 3.02(c), Section 3.02(e) or Section 3.02(f)) and such failure continues for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Notes a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” under the Indenture;

(e) failure by the Company to provide a Fundamental Change Company Notice when due;

(f) failure by the Company to provide notice of the Effective Date of the Make-Whole Fundamental Change when due;

(g) default by the Company or any of its Significant Subsidiaries that results in the acceleration of maturity with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed having a principal amount in excess of $10,000,000 in the aggregate of the Company and/or any Significant Subsidiary of the Company, whether such indebtedness now exists or shall hereafter be created; provided that any such event of default shall be deemed cured and not continuing upon payment of such indebtedness or rescission of such declaration;

(h) a final judgment for the payment of $10,000,000 or more (excluding any amounts covered by insurance) rendered against the Company or any Significant Subsidiary of the Company, which judgment is not discharged or stayed within 60 days after (i) the date on which the right to appeal thereof has expired if no such appeal has commenced, or (ii) the date on which all rights to appeal have been extinguished;

 

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(i) the entry by a court having jurisdiction in the premises of (i) a decree or order for relief in respect of a Significant Subsidiary of the Company in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law, (ii) a decree or order adjudging a Significant Subsidiary of the Company as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Significant Subsidiary of the Company under any applicable federal, state or foreign law or (iii) an appointment of a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of a Significant Subsidiary of the Company or any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; and

(j) the commencement by a Significant Subsidiary of the Company of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of a Significant Subsidiary of the Company in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of a Significant Subsidiary of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by a Significant Subsidiary of the Company in furtherance of any such action.

Section 3.03 . Automatic Acceleration on Bankruptcy. If an Event of Default specified in Section 3.02(i) or Section 3.02(j) occurs or an Event of Default specified in Section 501(5) or 501(6) of the Base Indenture occurs, the principal amount and accrued interest on all the Notes shall be due and payable immediately without the need for any action or notice by the Trustee or the Holders of the Outstanding Notes under Section 502 of the Base Indenture.

Section 3.04 . The Trustee. In addition to those matters set forth in Section 602 of the Base Indenture, with respect to the Notes only, the following additional provisions shall apply to the Trustee:

 

(i)

The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.

 

(ii)

The Trustee may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to

 

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take specified actions pursuant to this First Supplemental Indenture, which Officers’ Certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.

 

(iii)

Any permissive right or authority granted to the Trustee shall not be construed as a mandatory duty.

 

(iv)

Neither the Trustee nor any clearing system through which the Notes are traded shall have any obligation or duty to monitor, determine or inquire as to compliance, and shall not be responsible or liable for compliance, with restrictions on transfer, exchange or purchase, as applicable, or minimum denominations imposed hereunder or under applicable law or regulation with respect to any transfer, exchange or purchase, as applicable, of any interest in any Note.

 

(v)

The Trustee may refrain from taking any action in any jurisdiction if the taking of such action in that jurisdiction would, in its opinion based upon legal advice in the relevant jurisdiction, be contrary to any law of that jurisdiction or, to the extent applicable, of the State of New York. Furthermore, the Trustee may also refrain from taking such action if it would otherwise render it liable to any person in that jurisdiction or the State of New York or if, in its opinion based upon such legal advice, it would not have the power to do the relevant thing in that jurisdiction by virtue of any applicable law in that jurisdiction or in the State of New York or if it is determined by any court or other competent authority in that jurisdiction or in the State of New York that it does not have such power.

 

(vi)

The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under the Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications service; accidents; labor disputes; acts of civil or military authority or governmental actions; it being understood that the Trustee shall use its best efforts to resume performance as soon as practicable under the circumstances.

 

(vii)

In no event shall the Trustee be liable for any special, indirect or consequential loss or damage of any kind whatsoever (including, but not limited to, lost profits), even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

Section 3.05 . Amendments; Waiver. (a) In addition to those matters set forth in Section 902 of the Base Indenture, with respect to the Notes, no amendment or supplemental indenture shall without the consent of the Holders of each Outstanding Note affected thereby:

 

(i)

reduce the Fundamental Change Purchase Price; or

 

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(ii)

modify the ranking of the Notes in a manner adverse to the Holders of the Notes.

(b) In addition to the past defaults or Events of Default that may not be waived under Section 513 of the Base Indenture, in connection with the Notes, the Holders of at least a majority in aggregate principal amount of Outstanding Notes may not waive under Section 513

 

(i)

any default or Event of Default arising or resulting from failure by the Company to pay the Fundamental Change Purchase Price; or

 

(ii)

any default or Event of Default arising or resulting from the failure by the Company to comply with its obligation to convert the Notes upon the exercise of a Holder’s conversion right.

Section 3.06 . Modification and Waiver. In addition to those matters set forth in Section 901 of the Base Indenture, with respect to the Notes, without prior notice to, or consent of, any Holder of Notes, the Company, when authorized by or pursuant to a Board Resolution, and the Trustee, at any time and from time to time, may, pursuant to Section 901 of the Base Indenture as modified hereby, enter into one or more supplemental indentures, in form satisfactory to the Trustee, for any one of the following purposes:

 

(i)

to cure any ambiguity or correct any inconsistent or otherwise defective provision contained in the Indenture, so long as such action will not materially adversely affect the interests of Holders of the Notes;

 

(ii)

to provide for the assumption by a successor corporation of the obligations of the Company under the Indenture to evidence and provide for the acceptance of appointment of a successor trustee pursuant to the Indenture (to the extent not already addressed in Section 901 of the Base Indenture);

 

(iii)

to add guarantees with respect to the Notes;

 

(iv)

to secure the Notes;

 

(v)

to increase the Conversion Rate in accordance with the terms of the Notes;

 

(vi)

to give effect to conversion rights of Holders in accordance with Section 4.05.

 

(vii)

to make any change that does not materially adversely affect the rights of any Holder of the Notes;

 

(viii)

to comply with any requirement of the Commission in connection with the qualification of the Indenture under the Trust Indenture Act;

 

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(ix)

to comply with the provisions of any clearing agency, clearing corporation or clearing system, the Trustee or the Registrar with respect to the provisions of the Indenture or the Notes relating to transfers and exchanges of Notes; or

 

(x)

to conform the provisions of the Indenture to the “Description of Notes” section in the Final Prospectus Supplement.

Section 3.07 . Additional Interest . (a) Notwithstanding anything to the contrary in the Base Indenture, if so elected by the Company, the sole remedy for an Event of Default relating to the failure to comply with Section 703 of the Base Indenture and for any failure to comply with the requirements of Section 314(a)(1) of the Trust Indenture Act shall (i) for the first 90 days after the occurrence of such an Event of Default or failure consist exclusively of the right to receive additional interest on the Notes at an annual rate equal to 0.25% of the principal amount of outstanding Notes and (ii) from the 91st day until the 180th day following the occurrence of such an Event of Default or failure consist exclusively of the right to receive additional interest on the Notes at an annual rate equal to 0.50% of the principal amount of outstanding Notes. If the Company so elects, the additional interest payable under this Section 3.07 shall be payable on all Outstanding Notes from and including the date on which such Event of Default or failure first occurs to, but excluding, the 180th day thereafter, or such earlier date on which such Event of Default or failure has been cured or waived or ceases to exist. On the 181st day after such Event of Default, or failure if such Event of Default or failure has not been cured or waived prior to such 181st day, additional interest payable pursuant to this Section 3.07 will cease to accrue and the Notes will be subject to acceleration as provided in Section 502 of the Base Indenture. If the Company does not elect to pay the additional interest payable pursuant to this Section 3.07 upon an Event of Default or failure in accordance with this paragraph, the Notes will be subject to acceleration as provided in Section 502 of the Base Indenture. Any additional interest payable pursuant to this Section 3.07 will be payable at the same time, in the same manner and to the same persons as regular interest is payable pursuant to Section 2.05.

(b) In order to elect to pay the Additional Interest payable pursuant to Section 3.07(a) as the sole remedy during the first 180 days after the occurrence of an Event of Default relating to the failure to comply with Section 703 of the Base Indenture or the requirements of Section 314(a)(1) of the Trust Indenture Act, the Company must (i) notify all record Holders, the Trustee and Paying Agent of such election before the Close of Business on the date on which such Event of Default or failure first occurs and on or before the Close of Business on the 91st day after the date on which such Event of Default or failure first occurs, as applicable. Upon the failure to timely give all Holders, the Trustee and Paying Agent such notice, the Notes will be immediately subject to acceleration as provided in Section 502 of the Base Indenture.

Section 3.08 . Satisfaction and Discharge of Indenture. Section 401 of the Base Indenture shall not apply to the Notes. At any time after all Outstanding Notes have become due and payable, whether at Stated Maturity or upon a purchase following a Fundamental Change pursuant to Article 5, and any pending conversions have been completed (including delivery of all shares of Common Stock or Reference Property, if any, deliverable pursuant to such conversions in accordance with Section 4.03), then the Indenture shall cease to be of further

 

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effect with respect to the Notes when (a) the Company delivers to the Trustee all Outstanding Notes theretofore authenticated (other than any Notes that have been destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) for cancellation, or (b) the Company irrevocably deposits with the Trustee money sufficient to pay at Stated Maturity or upon purchase following a Fundamental Change of all Outstanding Notes, including interest thereon to but excluding, the Stated Maturity or Fundamental Change Purchase Date (other than any Notes that have been destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered), and in each such case the Company pays all other sums payable hereunder by the Company. The Trustee, on written demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel as required by Section 102 of the Base Indenture and at the reasonable cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of and discharging the Indenture with respect to the Notes; the Company, however, hereby agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with the Indenture or the Notes.

Notwithstanding the satisfaction and discharge of the Indenture with respect to the Notes, the obligations of the Company to the Trustee and any predecessor Trustee under Section 606 of the Base Indenture, the obligations of the Company to any Authenticating Agent under Section 615 of the Base Indenture and, if money shall have been deposited with the Trustee, the obligations of the Trustee under Section 402 of the Base Indenture and the second paragraph of Section 605 of the Base Indenture shall survive with the respect to the Notes.

Section 3.09 . Unconditional Right of Holders to Enforce Conversion Rights. Notwithstanding any other provision in the Indenture, the Holder of any Note shall have the right which is absolute and unconditional to enforce, and institute and maintain any proceeding to enforce, its rights of conversion provided in this First Supplemental Indenture and the Notes.

ARTICLE 4

C ONVERSION

Section 4.01 . Right to Convert.

(a) Subject to and upon compliance with the provisions of this First Supplemental Indenture, each Holder shall have the right, at such Holder’s option, at any time prior to the Close of Business on the Business Day immediately preceding the Stated Maturity, to convert the principal amount of any Notes, or any portion of such principal amount which is $1,000 or a multiple thereof, into Common Stock, at the Conversion Rate; provided that the amount not so converted is in a minimum principal amount of $2,000. The Conversion Rate is subject to adjustment by the Company as provided in Section 4.04.

 

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(b) If a Holder of Notes has submitted Notes for purchase under Section 5.01, the Holder may convert such Notes only if the Holder first withdraws its Fundamental Change Purchase Notice pursuant to Section 5.02.

Section 4.02 . Conversion Procedure.

(a) In order to exercise the conversion right with respect to any Note, the Holder of any such Note to be converted, in whole or in part, shall:

(i) complete and manually sign the conversion notice provided on the back of the Note (the “ Conversion Notice ”) or a facsimile of the Conversion Notice and deliver such notice, which is irrevocable, to the Conversion Agent;

(ii) surrender the Note to the Conversion Agent;

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

(iv) if required, pay any transfer or similar tax; and

(v) if required, pay funds equal to interest payable on the next Interest Payment Date to the extent required by Section 4.03(a).

The date on which the Holder satisfies all of the applicable requirements set forth above is the “ Conversion Date .”

In order to exercise the conversion right with respect to a beneficial interest in a Global Note held through the facilities of the Depositary, the owner of the beneficial interest must comply with the requirements of Section 4.02(a)(iv) and (v) and comply with the applicable procedures of the Depositary for converting a beneficial interest in a Global Note.

(b) Each conversion shall be deemed to have been effected as to any Note (or portion thereof) on the date on which the requirements set forth above in Section 4.01(a) have been satisfied as to such Note (or portion thereof); and the Person in whose name any certificate or certificates for shares of Common Stock shall be issuable upon such conversion shall be deemed to have become as of the relevant Conversion Date the holder of record of the shares of Common Stock represented thereby.

(c) No later than on the third Business Day immediately following the Conversion Date, the Company shall deliver to the Holder at the office of the Conversion Agent, a certificate or certificates representing the shares of Common Stock issuable in respect of such conversion in accordance with the provisions of this Article 4. In case any Note that is not a Global Note shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of the Note so surrendered, without charge to the Holder, a new Note in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Note. Upon partial conversion of a Global Note, the Trustee (or other Conversion Agent appointed by the Company) shall make a notation on such Global Note as to the reduction in the principal amount represented thereby.

 

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(d) The Company shall notify the Trustee in writing of any conversions of Notes effected through any Conversion Agent other than the Trustee.

Section 4.03. Accrued Interest and Fractional Shares upon Conversion .

(a) Upon conversion, Holders shall not receive any separate cash payment for accrued and unpaid interest, except as described in this Section 4.03(a). If Notes are converted after the Close of Business on a Regular Record Date for the payment of interest, Holders of such Notes at the Close of Business on such Regular Record Date will receive the interest payable on such Notes on the corresponding Interest Payment Date notwithstanding the conversion. Notes surrendered for conversion during the period from the Close of Business on any Regular Record Date to the open of business on the immediately following Interest Payment Date must be accompanied by funds equal to the amount of interest payable on such Interest Payment Date for the Notes so converted; provided that no such payment need be made (i) for conversions following the Regular Record Date immediately preceding the Stated Maturity; (ii) if the Company has specified a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the corresponding Interest Payment Date; or (iii) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such Note.

(b) The Company shall not issue fractional shares upon conversion of the Notes. Instead, the Company will increase the number of shares of Common Stock issuable upon conversion to the next whole share. If multiple Notes shall be surrendered for conversion at one time by the same Holder, the number of full shares which shall be issuable upon conversion shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof to the extent permitted hereby) so surrendered.

(c) By delivery to the Holder of the full number of shares of Common Stock issuable upon conversion, the Company will be deemed to satisfy in full its obligation to pay the principal amount of the Notes and all accrued and unpaid interest to, but not including, the Conversion Date. Upon conversion of the Notes, all accrued and unpaid interest to, but not including, the Conversion Date will be deemed to be paid in full rather than canceled, extinguished or forfeited, unless such conversion occurs between a Regular Record Date and the Interest Payment Date to which it relates, in which case such payment shall be made to the Holder of the converted Notes as of the Close of Business on the Regular Record Date.

Section 4.04 . Adjustment of Conversion Rate. The Conversion Rate shall be adjusted from time to time by the Company if any of the following events occurs as described below, except that the Company will not make any adjustment to the Conversion Rate if Holders of Notes participate, at the same time as holders of the Common Stock, as a result of holding the Notes, in any of the transactions described in this Section 4.04 without having to convert their Notes as if such Holders held the number of shares of Common Stock issuable upon conversion

 

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of their Notes. For the purpose of this Section 4.04, “ effective date ” means the first date on which the shares trade on the applicable exchange or in the applicable market, regular way, reflecting the transaction.

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