Document:

Exhibit 10.1

 

	
 
    

 

SALLY HOLDINGS LLC

SALLY CAPITAL INC.

 

$200,000,000

 

5.50% Senior Notes due 2023

 

UNDERWRITING AGREEMENT

 

Dated October 24, 2013

 

	
 
    

 

 

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

One Bryant Park

New York, New York 10036

 

As Representative of the several underwriters named in Schedule I hereto

 

Ladies and Gentlemen:

 

Sally Holdings LLC, a Delaware limited liability company (the “Company”), and Sally Capital Inc., a Delaware corporation (the “Co-Issuer” and, together with the Company, the “Issuers”), propose, subject to the terms and conditions stated herein, to issue and sell to the underwriters named in Schedule I hereto (the “Underwriters”), acting severally and not jointly, the respective amounts set forth in such Schedule I of $200,000,000 aggregate principal amount of the Issuers’ 5.50% Senior Notes due 2023 (the “Notes”).  Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”) has agreed to act as the representative of the several Underwriters (the “Representative”) in connection with the offering and sale of the Notes.

 

The Securities (as defined below) will be issued pursuant to an indenture, dated as of May 18, 2012 (the “Base Indenture”), among the Issuers, the Guarantors (as defined below) and Wells Fargo Bank, National Association, as trustee (the “Trustee”), as supplemented by a supplemental indenture, to be dated as of the Closing Date (as defined in Section 2 hereof) (the “Supplemental Indenture” and together with the Base Indenture, the “Indenture”).  The Notes will be issued only in book-entry form in the name of Cede & Co., as nominee of The Depository Trust Company (the “Depository”), pursuant to a blanket letter of representations, dated as of November 15, 2006 (as modified, the “DTC Agreement”), between the Issuers and the Depository.

 

The payment of principal of, premium, if any, and interest on the Notes will be fully and unconditionally guaranteed on a senior unsecured basis, jointly and severally, by (i) the entities listed on the signature pages hereof as “Guarantors” and (ii) any subsidiary of the Guarantors and/or the Issuers formed or acquired after the Closing Date that executes an additional guarantee in accordance with the terms of the Indenture, and their respective successors and assigns (collectively, the “Guarantors”), pursuant to their guarantees (the “Guarantees”).  The Notes and the Guarantees attached thereto are herein collectively referred to as the “Securities.”

 

This Agreement, the DTC Agreement, the Securities and the Indenture are referred to herein as the “Transaction Documents.”

 

1.                                      Each of the Issuers and the Guarantors, jointly and severally, represents and warrants to, and agrees with, each of the Underwriters that:

 

(a)                                 An automatic shelf registration statement on Form S-3 (File No. 333-181351) covering the public offering and sale by the Issuers from time to time of debt securities, including the Securities, has been filed with the Securities and Exchange Commission (the “Commission”), which automatic shelf registration statement became effective pursuant to Rule 462(e) under the Securities Act of 1933, as amended (the “Act”); and no stop order suspending

 

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the effectiveness of the Registration Statement or any post-effective amendment thereto, or preventing or suspending the use of any Preliminary Prospectus or the Prospectus, has been issued pursuant to Rule 401(g)(2) or otherwise and no proceeding for that purpose has been initiated or, to the knowledge of the Issuers and the Guarantors, threatened by the Commission pursuant to Section 8A of the Act or otherwise (any preliminary prospectus included in the Registration Statement or filed with the Commission pursuant to Rule 424(b) of the rules and regulations of the Commission under the Act (“Rule 424(b)”), including the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, are collectively referred to herein as a “Preliminary Prospectus”); the various parts of the Registration Statement, including (i) any post-effective amendment thereto, each in the form heretofore delivered to the Underwriters, (ii) the exhibits and any schedules thereto at such time, (iii) the documents incorporated or deemed to be incorporated by reference therein at such time pursuant to Item 12 of Form S-3 under the Act and (iv) the documents otherwise deemed to be a part thereof as of such time pursuant to Rule 430B under the Act (“Rule 430B”), are hereinafter collectively called the “Registration Statement” (provided, however, that the “Registration Statement” without reference to a time means such registration statement as amended by any post-effective amendments thereto as of the time of the first contract of sale for the Securities, which time shall be considered the “new effective date” of such registration statement with respect to the Securities within the meaning of paragraph (f)(2) of Rule 430B, including the exhibits and schedules thereto as of such time, the documents incorporated or deemed incorporated by reference therein at such time pursuant to Item 12 of Form S-3 under the Act and the documents otherwise deemed to be a part thereof as of such time pursuant to the Rule 430B); the Preliminary Prospectus dated October 24, 2013, relating to the Securities (including any documents incorporated by reference therein) in the form first filed pursuant to the provisions of Rule 424(b) is hereinafter called the “Pricing Prospectus”; the final prospectus relating to the Securities (to be prepared and filed by the Company in accordance with the provisions of Rule 424(b)) in the form first furnished or made available to the Underwriters for use in connection with the offering of the Securities, including the documents incorporated or deemed to be incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, are collectively referred to herein as the “Prospectus”; and any “issuer free writing prospectus” as defined in Rule 433 under the Act relating to the Securities is hereinafter called an “Issuer Free Writing Prospectus”);

 

(b)                                 Sally Beauty Holdings, Inc. (the “Parent”) and the Issuers meet the requirements for use of Form S-3 under the Act.  The Registration Statement is an “automatic shelf registration statement” (as defined in Rule 405 under the Act (“Rule 405”)) that has been filed with the Commission not earlier than three years prior to the date hereof; no notice of objection of the Commission to the use of such Registration Statement has been issued by the Commission and no proceeding for that purpose or pursuant to Section 8A of the Act against the Parent or either of the Issuers or related to the offering has been initiated or threatened by the Commission; and the Securities have been and remain eligible for registration by the Issuers on such automatic shelf registration statement; the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended, and the rules and regulations promulgated thereunder (the “Trust Indenture Act”);

 

(c)                                  No order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission, and each Preliminary

 

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Prospectus dated on or after October 24, 2013, at the time of filing thereof, conformed in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Issuers by any Underwriter through the Representative expressly for use therein;

 

(d)                                 The documents incorporated or deemed to be incorporated by reference in the Registration Statement, the Pricing Prospectus and the Prospectus, when they became effective or at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the Act, the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (the “Exchange Act”) and, when taken together with the Pricing Disclosure Package (as defined below), did not as of the Applicable Time, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;

 

(e)                                  For the purposes of this Agreement, the “Applicable Time” is 2:20 p.m. (New York City time) on the date of this Agreement.  The Pricing Prospectus, as supplemented by the Issuer Free Writing Prospectuses, including the Final Term Sheet (as defined herein), and other information listed on Schedule II(a) (collectively, the “Pricing Disclosure Package”), as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; no Issuer Free Writing Prospectus listed on Schedule II(b) hereto conflicts with the information contained in the Registration Statement, the Pricing Prospectus or the Prospectus; and each Issuer Free Writing Prospectus, to the extent not superseded or modified by any subsequent Issuer Free Writing Prospectus, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions made in an Issuer Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Issuers by any Underwriter through the Representative expressly for use therein;

 

(f)                                   The Registration Statement conforms, and the Prospectus and any further amendments or supplements to the Registration Statement and the Prospectus will conform, in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder and do not and will not, (i) as to each part of the Registration Statement, as of its effectiveness and at each deemed effective date with respect to the Underwriters pursuant to Rule 430(B)(f)(2) under the Act, and (ii) as to the Prospectus and any amendment or supplement thereto, as of its date and at the Closing Date, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of the Prospectus, in light of the circumstances under which they were made); provided, however, that this representation and warranty shall not apply to any

 

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statements or omissions made in reliance upon and in conformity with information furnished in writing to the Issuers by any Underwriter through the Representative expressly for use therein;

 

(g)                                  (A) At the original effectiveness of the Registration Statement, (B) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Act or form of prospectus), (C) at the time the Issuers or any person acting on their behalf (within the meaning, for this clause only, of Rule 163(c) under the Act) made any offer relating to the Securities in reliance on the exemption of Rule 163 under the Act, and (D) as of the Applicable Time, the Parent and the Issuers were and are “well-known seasoned issuers” (as defined in Rule 405);

 

(h)                                 The Parent, the Issuers and their consolidated subsidiaries, taken together as a whole, have not sustained since the date of the latest audited financial statements included in the Pricing Prospectus any material loss or material interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in the Pricing Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Pricing Prospectus, there has not been any material change in the capital stock or long-term debt of the Parent and its consolidated subsidiaries, taken together as a whole, or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of the Parent, the Issuers and their subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Pricing Prospectus;

 

(i)                                     The Parent, the Issuers and their subsidiaries collectively have good title in fee simple to, or have valid rights to lease or otherwise use, all items of real property, and title to, or valid rights to lease or otherwise use, all personal property, which are material to the business of the Parent, the Issuers and their subsidiaries, taken as a whole (collectively, the “Business”), free and clear of all liens, encumbrances, claims and title defects (collectively, “Liens”) that would reasonably be expected to have a material adverse effect on the financial position, stockholders’ equity or results of operations of the Parent, the Issuers and their subsidiaries, taken as a whole (a “Material Adverse Effect”), other than Liens securing or otherwise permitted by indebtedness described in the Pricing Prospectus, and except as do not materially interfere with the use of such properties;

 

(j)                                    Each of the Parent, the Issuers and the Guarantors has been duly incorporated or formed, as applicable, and is validly existing as a corporation, limited partnership or limited liability company, as applicable, in good standing under the laws of the jurisdiction of its incorporation or organization, and has corporate, partnership or limited liability company, as applicable, power and authority to own its properties and conduct its business as described in the Pricing Prospectus and to enter into and perform its obligations under each of the Transaction Documents to which it is a party.  Each of the Parent, the Issuers and the Guarantors has been duly qualified as a foreign corporation, limited partnership or limited liability company, as applicable, for the transaction of business and is in good standing or equivalent status (if applicable) under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except where the failure to be so

 

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organized or to be so qualified or have such corporate or other power or authority would not reasonably be expected to have a Material Adverse Effect; each of the Company’s subsidiaries is listed on Schedule III hereto;

 

(k)                                 All of the issued shares of capital stock of the Parent have been duly and validly authorized and issued and are fully paid and non-assessable; none of the outstanding shares of capital stock of the Parent were issued in violation of the preemptive or other similar rights of any securityholder of the Parent; all of the issued shares of capital stock or other equity interests of each of the Company and the Co-Issuer have been duly and validly authorized and issued and are fully paid and non-assessable and are owned directly or indirectly by the Parent; none of the outstanding shares of capital stock or other equity interests of the Company and the Co-Issuer were issued in violation of the preemptive or other similar rights of any securityholder of the Company and the Co-Issuer; all of the issued shares of capital stock of each of the Guarantors that is a corporation have been duly and validly authorized and issued, are fully paid and non-assessable and, to the extent that a Guarantor is a partnership or a limited liability company, all of the issued equity interests of each such Guarantor have been duly and validly authorized and issued and, in each case, except as otherwise set forth in the Pricing Prospectus and except for the Parent, are owned directly or indirectly by the Company (or, in the case of Sally Investment Holdings LLC, is owned by the Parent), free and clear of all liens, encumbrances, equities or claims, other than Liens granted under or otherwise permitted by indebtedness described in the Pricing Prospectus, as the same may be amended, supplemented, waived or otherwise modified from time to time, or refunded, refinanced, restructured, replaced, renewed, repaid, increased or extended from time to time (whether in whole or in part);

 

(l)                                     Each of the Parent, the Issuers and the Guarantors has the requisite power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby and thereby; and this Agreement has been duly authorized, executed and delivered by the Parent and each of the Issuers and the Guarantors;

 

(m)                             The Notes to be purchased by the Underwriters from the Issuers will on the Closing Date be in the form contemplated by the Indenture, have been duly authorized for issuance and sale pursuant to this Agreement and the Indenture and, at the Closing Date, will have been duly executed by each of the Issuers and, when authenticated by the Trustee in the manner provided for in the Indenture (assuming the due authorization, execution and delivery of the Indenture by the Trustee) and delivered against payment of the purchase price therefor, will constitute valid and binding obligations of each of the Issuers, enforceable in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles and will be entitled to the benefits of the Indenture.  The Guarantees of the Notes on the Closing Date will be in the form contemplated by the Indenture and have been duly authorized for issuance pursuant to this Agreement and the Indenture; the Guarantees of the Notes, at the Closing Date, will have been duly executed by each of the Guarantors and, when the Notes have been authenticated by the Trustee in the manner provided for in the Indenture (assuming the due authorization, execution and delivery of the Indenture by the Trustee) and issued and delivered against payment of the purchase price therefor, the Guarantees of the Notes will constitute valid and binding agreements of the Guarantors, enforceable in accordance with their terms, except as the enforcement thereof may

 

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be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles and will be entitled to the benefits of the Indenture;

 

(n)                                 The Base Indenture has been duly authorized, executed and delivered by each of the Issuers and the Guarantors and (assuming the due authorization, execution and delivery by the Trustee) constitutes a valid and binding agreement of each of the Issuers and the Guarantors, enforceable against each of the Issuers and the Guarantors in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles;

 

(o)                                 The Supplemental Indenture has been duly authorized by each of the Issuers and the Guarantors and, at the Closing Date, will have been duly executed and delivered by each of the Issuers and the Guarantors and (assuming the due authorization, execution and delivery by the Trustee) will constitute a valid and binding agreement of each of the Issuers and the Guarantors, enforceable against each of the Issuers and the Guarantors in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles;

 

(p)                                 The compliance by the Issuers and the Guarantors with the Transaction Documents and the consummation of the transactions therein contemplated will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which any of the Parent, the Issuers or the Guarantors is a party or by which any of the Parent, the Issuers or the Guarantors is bound or to which any of the property or assets of the Parent, the Issuers or the Guarantors is subject, (ii) violate any provision of the certificate of incorporation or by-laws, or other organizational documents, as applicable, of the Parent, the Issuers or any of the Guarantors or (iii) violate any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Parent, either of the Issuers or any of the Guarantors or any of their properties; except, in the case of clauses (i) and (iii), as would not reasonably be expected to have a Material Adverse Effect, in the case of each such clause, after giving effect to any consents, approvals, authorizations, orders, registrations, qualifications, waivers and amendments as will have been obtained or made as of the date of this Agreement; no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the execution, delivery and performance by the Issuers and the Guarantors of their respective obligations under the Transaction Documents, except (v) the registration under the Act of the Securities, which has been effected, (w) such consents, approvals, authorizations, registrations or qualifications as may be required under foreign, state, securities or Blue Sky laws or the rules and regulations of the Financial Industry Regulatory Authority (“FINRA”), in connection with the sale of the Securities, (x) such consents, approvals, authorizations, orders, registrations, qualifications, waivers, amendments or terminations as will have been obtained or made as of the Applicable Time, and (y) where the failure to obtain or make any such consent, approval, authorization, order, registration or qualification would not reasonably be expected to have a Material Adverse Effect;

 

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(q)                                 None of the Parent, the Issuers or the Guarantors is (i) in violation of its certificate of incorporation or by-laws (or other organizational document, as applicable) or (ii) in default in the performance or observance of any obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except in the case of clause (ii) for any violation or default that would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect;

 

(r)                                    Other than as set forth in the Pricing Prospectus, there are no legal or governmental proceedings pending to which the Parent, the Issuers or the Guarantors or, to the knowledge of the Parent, either of the Issuers or any of the Guarantors is a party or of which any property of the Parent, either of the Issuers or any of the Guarantors or, to the knowledge of the Parent, either of the Issuers or any of the Guarantors is the subject which would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and, to the knowledge of the Parent, either of the Issuers or any of the Guarantors, no such proceedings are threatened by governmental authorities or by others;

 

(s)                                   The Transaction Documents will conform in all material respects to the respective statements relating thereto contained in the Pricing Prospectus;

 

(t)                                    Neither the Parent, the Issuers nor any Guarantor nor any of their respective subsidiaries nor any agent thereof acting on their behalf has taken, and none of them will take, any action that might cause this Agreement or the issuance or sale of the Securities to violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System;

 

(u)                                 None of the Parent, the Issuers or any of the Guarantors is, or after giving effect to the offering and sale of the Securities will be, an “investment company,” as such term is defined in the United States Investment Company Act of 1940, as amended (the “Investment Company Act”);

 

(v)                                 The consolidated historical financial statements of the Company incorporated by reference into the Pricing Prospectus present fairly in all material respects the financial position of the Company and its consolidated subsidiaries, as of the dates indicated, and the results of its and their operations and the changes in its and their shareholders’ equity and cash flows for the periods specified (subject to the omission of footnotes and normal year end audit and other adjustments, as to any unaudited financial statements of the Company); such consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis, subject to the limitations set out in the notes to the respective financial statements of the Company incorporated by reference in the Pricing Prospectus and the Prospectus; the consolidated historical financial statements of the Parent incorporated by reference into the Pricing Prospectus present fairly in all material respects the financial position of the Parent and its consolidated subsidiaries, as of the dates indicated, and the results of its and their operations and the changes in its and their shareholders’ equity and cash flows for the periods specified (subject to the omission of footnotes and normal year end audit and other adjustments, as to any unaudited financial statements of the Parent); such consolidated financial statements have been prepared in

 

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accordance with GAAP applied on a consistent basis, subject to the limitations set out in the notes to the financial statements of the Parent; the financial data set forth in the Pricing Prospectus under the caption “Prospectus Supplement Summary—Summary Consolidated Financial Data” present fairly in all material respects the information set forth therein; the interactive data in eXtensible Business Reporting Language incorporated by reference in the Pricing Prospectus and the Prospectus fairly presents the information called for in all material respects and has been prepared in all material respects in accordance with the Commission’s rules and guidelines applicable thereto;

 

(w)                               Each of the Parent, the Issuers and the Guarantors is, and immediately after the Closing Date will be, Solvent; as used herein, the term “Solvent” means, with respect to any person on a particular date, that on such date (i) the fair market value of the assets of such person is greater than the total amount of liabilities (including contingent liabilities) of such person, (ii) the present fair salable value of the assets of such person is greater than the amount that will be required to pay the probable liabilities of such person on its debts as they become absolute and matured, (iii) such person is able to realize upon its assets and pay its debts and other liabilities, including contingent obligations, as they mature and (iv) such person does not have unreasonably small capital;

 

(x)                                 At the time of filing the Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Parent, the Issuers or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Act) of the Securities and at the date hereof, each of the Parent and the Issuers was not and is not an “ineligible issuer,” as defined under Rule 405 under the Act;

 

(y)                                 KPMG LLP, who has audited certain consolidated financial statements of the Company and its consolidated subsidiaries incorporated by reference into the Pricing Prospectus, has advised the Company that they are independent public accountants with respect to the Company as required by the Act and the rules and regulations of the Commission thereunder, the Exchange Act and the Public Accounting Oversight Board; KPMG LLP, who has audited certain consolidated financial statements of the Parent and its consolidated subsidiaries incorporated by reference into the Pricing Prospectus, has advised the Parent that they are independent public accountants with respect to the Parent as required by the Act and the rules and regulations of the Commission thereunder, the Exchange Act and the Public Accounting Oversight Board;

 

(z)                                  The Parent maintains a system of internal accounting controls sufficient to provide reasonable assurance that transactions are executed in accordance with management’s general or specific authorizations; transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; access to assets is permitted only in accordance with management’s general or specific authorization; and the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences;

 

(aa)                          Since the date of the latest audited financial statements incorporated by reference into the Pricing Prospectus, to the knowledge of the Issuers and the Guarantors, there has been no change in the Parent’s internal control over financial reporting that has materially

 

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adversely affected, or would reasonably be expected to materially adversely affect, the Parent’s internal control over financial reporting;

 

(bb)                          The Parent maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Parent and its subsidiaries is made known to the Parent’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective;

 

(cc)                            The Parent and its subsidiaries collectively possess all licenses, permits, certificates, consents, orders, approvals and other authorizations from, and have made all declarations and filings with, all federal, state and other governmental authorities, presently required or necessary to own or lease, as the case may be, and to operate their properties and to carry on the business as set forth in the Pricing Prospectus (“Permits”), except where the failure to possess, make or obtain such Permits (by possession, declaration or filing) would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;

 

(dd)                          There is no strike or labor dispute, slowdown or work stoppage with the employees of the Parent or any of its subsidiaries that is pending or, to the knowledge of the Issuers and the Guarantors, threatened, except as would not reasonably be expected to have a Material Adverse Effect;

 

(ee)                            Except as disclosed in the Pricing Prospectus, there is no claim pending or, to the knowledge of the Issuers and the Guarantors, threatened under any Environmental Law (as defined below) against the Parent, the Issuers or their subsidiaries that would reasonably be expected to have a Material Adverse Effect.  The term “Environmental Law” means any federal, local or foreign law, regulation, ordinance, order, judgment decree, permit or rule (including rule of common law) now in effect governing pollution, or actual or alleged exposure to, hazardous or toxic materials, substances or wastes, including but not limited to, asbestos or asbestos-containing materials;

 

(ff)                              The Parent, the Company and their respective subsidiaries collectively carry insurance (including self-insurance, if any) in such amounts and covering such risks as in the Parent’s and the Company’s reasonable determination is adequate for the conduct of the business and the value of its properties, except where the failure to carry such insurance would not reasonably be expected to have a Material Adverse Effect;

 

(gg)                            The Parent, the Issuers and their respective subsidiaries collectively own, or have the legal right to use, all United States patents, patent applications, trademarks, trademark applications, trade names, copyrights, technology, know-how and processes necessary for them to conduct the business as currently conducted (the “Intellectual Property”), except for those the failure to own or have such legal right to use would not be reasonably expected to have a Material Adverse Effect.  Except as disclosed in the Pricing Prospectus, no claim has been asserted and is pending by any person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor do the Issuers know of any such claim, and, to the knowledge of the Issuers and the Guarantors, the use of such

 

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Intellectual Property by the Parent, the Company and their respective subsidiaries does not infringe on the rights of any person, except for such claims and infringements which in the aggregate, would not be reasonably expected to have a Material Adverse Effect;

 

(hh)                          Each of the Parent, the Issuers and the Guarantors has filed or caused to be filed all United States federal income tax returns and all other material tax returns which are required to be filed and has paid (a) all taxes shown to be due and payable on such returns and (b) all taxes shown to be due and payable on any assessments of which it has received notice made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any governmental authority (other than any (i) taxes, fees or other charges with respect to which the failure to pay, in the aggregate, would not reasonably be expected to have a Material Adverse Effect or (ii) taxes, fees or other charges the amount or validity of which are currently being contested in good faith by appropriate proceedings diligently conducted and with respect to which reserves in conformity with GAAP have been provided on the books of the Parent, the Issuers or the Guarantors, as applicable).  No tax lien has been filed, and no claim is being asserted, with respect to any such tax, fee or other charge, against any of the Parent, the Issuers or the Guarantors, or to the knowledge of the Issuers and the Guarantors, any of their subsidiaries, except for liens or charges that would not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect;

 

(ii)                                  Neither the Parent, the Issuers nor, to the knowledge of the Issuers and the Guarantors, any of the Issuers’ subsidiaries or any director, officer or employee acting on behalf of the Parent, the Issuers or any of their respective subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) made any direct or indirect unlawful payment to any government official or employee from corporate funds, (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the Bribery Act 2010 of the United Kingdom or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment;

 

(jj)                                The operations of the Parent, the Issuers and, to the knowledge of the Issuers and the Guarantors, the operations of the Issuers’ subsidiaries are and have been conducted at all times in all material respects in compliance with applicable financial record-keeping and reporting requirements of the anti-money laundering laws and regulations of the United States and any related or similar statutes (including, without limitation, the U.S. PATRIOT Act of 2001), rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Parent, the Company or any of their subsidiaries with respect to the Money Laundering Laws is, to the knowledge of the Issuers and the Guarantors, pending or threatened;

 

(kk)                          Neither the Parent, the Issuers nor, to the knowledge of the Issuers and the Guarantors, the Issuers’ subsidiaries, or any of their respective directors, officers or employees , is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); the Issuers will not directly or indirectly use the proceeds of the sale of the Securities in violation of any U.S. sanctions administered by OFAC; and

 

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(ll)                                  There are no states in the United States in which the Company generated in excess of 7.5% of its consolidated net sales for the year ended September 30, 2012 or the nine months ended June 30, 2013 other than California and Texas.   In addition, the Guarantors organized in Wisconsin, New Hampshire, Florida and Arkansas collectively contributed no more than 5% of the Company’s consolidated sales and EBITDA during the nine months ended June 30, 2013.

 

2.

 

(a)                                 Each of the Issuers and the Guarantors agrees to issue and sell to the Underwriters, severally and not jointly, all of the Securities, and subject to the conditions set forth herein, the Underwriters agree, severally and not jointly, to purchase from the Issuers and the Guarantors, the aggregate principal amount of Securities set forth opposite their names on Schedule I hereto, at a purchase price of 98.5% of the principal amount thereof payable on the Closing Date, in each case, on the basis of the representations, warranties and agreements herein contained, and upon the terms herein set forth.

 

(b)                                 Delivery of certificates for the Securities in definitive form to be purchased by the Underwriters and payment therefor shall be made at the offices of Fried, Frank, Harris, Shriver & Jacobson LLP, One New York Plaza, New York, New York 10004 (or such other place as may be agreed to by the Company and the Representative) at 10:00 a.m., New York City time, on October 29, 2013, or such other time and date as the Representative shall designate by notice to the Company (the time and date of such closing is called the “Closing Date”).  The Issuers hereby acknowledge that circumstances under which the Representative may provide notice to postpone the Closing Date as originally scheduled include, but are in no way limited to, any determination by the Issuers or the Representative to recirculate to investors copies of an amended or supplemented Prospectus or a delay as contemplated by the provisions of Section 9 hereof.

 

(c)                                  The Issuers shall deliver, or cause to be delivered, to the Representative for the account of the several Underwriters certificates for the Notes at the Closing Date against the irrevocable release of a wire transfer of immediately available funds for the amount of the purchase price therefor.  The certificates for the Notes shall be in such denominations and registered in the name of Cede & Co., as nominee of the Depository, pursuant to the DTC Agreement, and shall be made available for inspection on the business day preceding the Closing Date at a location in New York City, as the Representative may designate.  Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Underwriters.

 

(d)                                 The Issuers hereby confirm their engagement of Goldman, Sachs & Co. (“Goldman Sachs”) as, and Goldman Sachs hereby confirms its agreement with the Issuers to render services as, a “qualified independent underwriter” within the meaning of Rule 5121 of FINRA with respect to the offering and sale of the Securities.  Goldman Sachs, in its capacity as qualified independent underwriter and not otherwise, is referred to herein as the “QIU”.

 

3.                                      Each of the Issuers and the Guarantors, jointly and severally, further covenants and agrees with each Underwriter as follows:

 

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(a)                                 The Issuers will prepare the Prospectus in a form approved by the Representative acting reasonably and file such Prospectus pursuant to Rule 424(b) not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by Rule 430B; make no further amendment or any supplement to the Registration Statement, the Pricing Disclosure Package or the Prospectus prior to the Closing Date which shall be disapproved by the Representative acting reasonably promptly after reasonable notice thereof; advise the Representative, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or any amendment or supplement to the Pricing Disclosure Package or the Prospectus has been filed and furnish the Representative with copies thereof; file promptly all material required to be filed by the Issuers with the Commission pursuant to Rule 433(d) under the Act; file promptly all reports and any definitive proxy, or information statements required to be filed by the Parent and the Issuers with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is required in connection with the offering or sale of the Securities; advise the Representative, promptly after it receives notice thereof, of the issuance by the Commission of any order suspending the effectiveness of the Registration Statement or preventing or suspending the use of any Preliminary Prospectus or the Prospectus or the initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of the Act, or of the receipt of any notice of objection of the Commission to the use of the Registration Statement or any post-effective supplement thereto pursuant to Rule 401(g)(2) under the Act, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus or suspending any such qualification, promptly use its best efforts to obtain the withdrawal of such order; and pay the required Commission filing fees relating to the Securities within the time required by Rule 456(b)(1)(i) under the Act without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) under the Act (including, if applicable, by updating the “Calculation of Registration Fee” table in accordance with Rule 456(b)(1)(ii) under the Act either in a post-effective amendment to the Registration Statement or on the cover page of a prospectus filed pursuant to Rule 424(b));

 

(b)                                 The Issuers will prepare a final term sheet in a form approved by the Representative and file such term sheet pursuant to Rule 433(d) under the Act within the time required by such rule (such term sheet, the “Final Term Sheet”);

 

(c)                                  Each of the Issuers and the Guarantors shall promptly from time to time take such action as the Representative may reasonably request to qualify the Securities for offering and sale under the securities laws of such jurisdictions as the Representative may reasonably request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Securities; provided, however, that in connection therewith the Issuers and the Guarantors shall not be required for any such purpose to (1) qualify as a foreign corporation, limited partnership or limited liability company, as applicable, in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(c), (2) consent, or take any action that would subject them, to general service of process in any such jurisdiction or

 

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(3) make any changes to its certificate of incorporation, by-laws or other organizational document, or any agreement between it and any of its equityholders;

 

(d)                                 If at any time prior to the Closing Date (i) any event shall occur or condition shall exist as a result of which any of the Pricing Disclosure Package as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (ii) it is necessary to amend or supplement any of the Pricing Disclosure Package to comply with law, the Issuers and the Guarantors will immediately notify the Underwriters thereof and forthwith prepare and furnish to the Underwriters such amendments or supplements to the Pricing Disclosure Package as may be necessary so that the statements in any of the Pricing Disclosure Package as so amended or supplemented will not, in the light of the circumstances under which they were made, be misleading or so that any of the Pricing Disclosure Package will comply with all applicable law.

 

(e)                                  As soon as practicable, but in no event later than 12:00 p.m., New York City time, on the second New York Business Day next succeeding the Applicable Time and from time to time, the Issuers shall furnish the Underwriters with written and electronic copies of the Prospectus in New York City in such quantities as the Representative may reasonably request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus in order to comply with applicable law, the Issuers shall notify the Representative and upon the Representative’s request prepare and furnish without charge to each Underwriter and to any dealer in securities as many written and electronic copies as any Underwriter may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; and in case any Underwriter is required to deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in connection with sales of any of the Securities at any time nine months or more after the time of issue of the Prospectus, upon the Representative’s request but at the expense of such Underwriter, the Issuers shall prepare and deliver to such Underwriter as many written and electronic copies as such Underwriter may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;

 

(f)                                   The Issuers shall make generally available to their securityholders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Parent and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Parent, Rule 158 under the Act);

 

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(g)                                  The Issuers shall apply the net proceeds from the sale of the Securities sold by them in the manner described under the caption “Use of Proceeds” in the Pricing Disclosure Package;

 

(h)                                 The Issuers will use their best efforts to permit the Securities to be eligible for clearance and settlement through the facilities of the Depository;

 

(i)                                     Prior to the completion of the placement of the Securities by the Underwriters, the Parent shall file, on a timely basis, with the Commission all reports and documents required to be filed under Section 13 or 15 of the Exchange Act;

 

(j)                                    During the period of 30 days following the date hereof, the Parent, the Issuers and their subsidiaries will not, without the prior written consent of Merrill Lynch (which consent may be withheld at the sole discretion of Merrill Lynch), directly or indirectly, sell, offer, contract or grant any option to sell, pledge, transfer or establish an open “put equivalent position” within the meaning of Rule 16a-1 under the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any registration statement under the Act in respect of, any debt securities of the Parent, either of the Issuers or any of their subsidiaries or securities exchangeable for or convertible into debt securities of the Parent, either of the Issuers or any of their subsidiaries (other than as contemplated by this Agreement); and

 

(k)                                 During the period of two years hereafter, if the Company is not subject to Section 13 or 15 of the Exchange Act and any Securities remain outstanding, the Company will furnish to the Representative and, upon request, to each of the other Underwriters: (i) as soon as practicable after the end of each fiscal year, copies of the Annual Report of the Company containing the balance sheet of the Company as of the close of such fiscal year and statements of income, stockholders’ equity and cash flows for the year then ended and the opinion thereon of the Company’s independent public or certified public accountants; (ii) as soon as practicable after the filing thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report filed by the Company with the Commission, FINRA or any securities exchange; and (iii) as soon as available, copies of any report or communication of the Company mailed generally to holders of its capital stock or debt securities (including the holders of the Securities), if, in each case, such documents are not filed with the Commission within the time periods specified by the Commission’s rules and regulations under Section 13 or 15 of the Exchange Act.  Notwithstanding the foregoing, the Company will be deemed to have satisfied the requirements of this Section 3(k) if any parent company of the Company files and provides reports, documents and information of the types otherwise so required, in each case within the applicable time periods, and the Company is not required to file such reports, documents and information separately under the applicable rules and regulations of the Commission (after giving effect to any exemptive relief) because of the filings of such parent.

 

The Representative, on behalf of the several Underwriters, may, in its sole discretion, waive in writing the performance by any of the Issuers or Guarantors of any one or more of the foregoing covenants or extend the time for their performance.

 

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4.

 

(a)                                 Each of the Issuers and the Guarantors represents and agrees that, without the prior consent of the Representative, it has not made and will not make any offer relating to the Securities that would constitute a “free writing prospectus” as defined in Rule 405 under the Act; each Underwriter represents and agrees that, without the prior consent of the Issuers and the Representative, it has not made and will not make any offer relating to the Securities that would constitute a free writing prospectus required to be filed with the Commission; any such free writing prospectus the use of which has been consented to by the Issuers and the Representative is listed on Schedule II(a) hereto;

 

(b)                                 The Issuers have complied and will comply with the requirements of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or retention where required and legending;

 

(c)                                  The Issuers agree that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Pricing Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Issuers will give notice thereof as soon as reasonably practicable to the Representative and following such notice, if requested by the Representative, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided, however, that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Issuers by an Underwriter through the Representative expressly for use therein.

 

5.                                      Each of the Issuers and the Guarantors covenants and agrees with the several Underwriters that the Issuers and the Guarantors will, jointly and severally, pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Issuers’ and Guarantors’ counsel and the Issuers’ and Guarantors’ accountants and all other expenses in connection with the preparation, printing, reproduction and filing of the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing this Agreement, the Blue Sky Memorandum, the other Transaction Documents, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) up to $5,000 in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 3(c) hereof, including the fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky Memorandum; (iv) all expenses incident to the issuance and delivery of the Securities (including all printing and engraving costs); (v) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Securities to the Underwriters; (vi) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; (vii) any fees payable in connection with the rating of the Securities with the ratings agencies; (viii) the filing fees incident to, and the fees and disbursements of counsel for the Underwriters and the fees and expenses of Goldman Sachs, if

 

15

 

any, acting as the QIU in connection with, any required review by FINRA of the terms of the sale of the Securities; (ix) all fees and expenses (including reasonable fees and expenses of counsel) of the Issuers and the Guarantors in connection with approval of the Securities by the Depository for “book-entry” transfer; (x) the costs and expenses of the Issuers and the Guarantors relating to investor presentations on any “road show” undertaken in connection with the marketing of the Securities, including without limitation expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations, travel and lodging expenses of the representatives and officers of the Issuers and the Guarantors and any such consultants, and the cost of aircraft and other transportation chartered in connection with the road show; and (xi) all other costs and expenses incident to the performance of the obligations of the Issuers and the Guarantors hereunder which are not otherwise specifically provided for in this Section.

 

Except as provided in this Section and Sections 7 and 8 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, and any advertising expenses connected with any offers they may make.

 

6.                                      The obligations of the Underwriters to purchase and pay for the Securities as provided herein on the Closing Date shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Issuers and the Guarantors set forth in Section 1 hereof are as of the date hereof, and as of the Closing Date, true and correct as though then made, the condition that the Issuers and the Guarantors shall have performed all of their respective obligations hereunder theretofore to be performed, and the following additional conditions:

 

(a)                                 The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 3(a) hereof; all material required to be filed by the Parent or the Issuers pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the applicable time period prescribed for such filing by Rule 433 under the Act; no order suspending the effectiveness of the Registration Statement or any part thereof shall be in effect, and no proceeding for such purpose, pursuant to Rule 401(g)(2) or pursuant to Section 8A under the Act shall be pending before or threatened by the Commission; no stop order suspending or preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission; all requests for additional information on the part of the Commission shall have been complied with to the Representative’s reasonable satisfaction; the Commission shall not have notified the Issuers of any objection to the use of the form of the Registration Statement or any post-effective amendment thereto; and the Issuers shall have paid the required Commission filing fees relating to the Securities within the time period required by Rule 456(1)(i) under the Act without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) under the Act and, if applicable, shall have updated the “Calculation of Registration Fee” table in accordance with Rule 456(b)(1)(ii) under the Act either in a post-effective amendment to the Registration Statement or on the cover page of a prospectus filed pursuant to Rule 424(b);

 

(b)                                 Fried, Frank, Harris, Shriver & Jacobson LLP, counsel for the Underwriters, shall have furnished to the Representative such written opinion or opinions, dated

 

16

 

as of the Closing Date, in form and substance satisfactory to the Representative, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;

 

(c)                                  (i) Alston & Bird LLP, counsel for the Issuers, shall have furnished to the Representative its written opinion and negative assurance letter (forms of such opinion and negative assurance letter are attached as Annexes I(a) and I(b) hereto), and (ii) Matthew Haltom, Esq., General Counsel of the Issuers, shall have furnished to the Representative his written opinion (a form of such opinion is attached as Annex I(c) hereto), each dated as of the Closing Date;

 

(d)                                 Alston & Bird LLP, counsel for the Guarantors organized in Delaware, California and Texas, shall have furnished to the Representative its written opinion, dated as of the Closing Date, the form of which is attached as Annex I(a) hereto;

 

(e)                                  On the date hereof and on the Closing Date, KPMG LLP shall have furnished to the Representative a “comfort” letter or “comfort” letters, dated the respective dates of delivery thereof, in form and substance reasonably satisfactory to the Representative and in accordance with professional auditing standards;

 

(f)                                   (i)  The Parent, the Issuers and their consolidated subsidiaries, taken together as a whole, have not sustained since the date of the latest audited financial statements included or incorporated by reference in the Pricing Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Prospectus, and (ii) since the respective dates as of which information is given in the Pricing Prospectus, there shall not have been any change in the capital stock or long-term debt of the Parent and its subsidiaries, taken as a whole, or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of the Parent and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Pricing Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Representative so material and adverse as to make it impracticable or inadvisable to proceed with the public offering, sale or the delivery of the Securities on the terms and in the manner contemplated in the Prospectus;

 

(g)                                  On or after the Applicable Time, (i) no downgrading shall have occurred in the rating accorded any debt of the Parent or any of its subsidiaries by any “nationally recognized statistical rating organization”, as that term is defined by the Commission for purposes of Section 3(a)(62) under the Exchange Act, and (ii) no such organization shall publicly announce that it has under surveillance or review, with possible negative implications, its rating of any debt of the Parent or any of its subsidiaries;

 

(h)                                 From the date hereof and on or prior to the Closing Date, there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange (the “Exchange”); (ii) a suspension or material limitation in trading in the Parent’s securities on the Exchange; (iii) a general moratorium on

 

17

 

commercial banking activities declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the  United States or the declaration by the United States of a national emergency or war; or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in the judgment of the Representative makes it impracticable or inadvisable to proceed with the public offering, sale or the delivery of the Securities on the terms and in the manner contemplated in the Prospectus;

 

(i)                                     The Company shall have complied with the provisions of Section 3(e) hereof with respect to the furnishing of prospectuses on the second New York Business Day next succeeding the date of this Agreement;

 

(j)                                    The Issuers and the Guarantors shall have furnished or caused to be furnished to the Representative on the Closing Date certificates of officers of the Issuers and the Guarantors, satisfactory to the Representative as to the accuracy of the representations and warranties of the Issuers and the Guarantors, herein at and as of the Closing Date, as to the performance by the Issuers and the Guarantors of all of their obligations hereunder to be performed at or prior to such Closing Date and as to such other matters as the Representative may reasonably request;

 

(k)                                 The Issuers and the Guarantors shall have executed and delivered the Supplemental Indenture, in form and substance reasonably satisfactory to the Representative, and the Underwriters shall have received executed copies thereof; and

 

(l)                                     On or before the Closing Date, the Underwriters and counsel for the Underwriters shall have received such information, documents and opinions as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.

 

If any condition specified in this Section 6 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Representative by notice to the Issuers at any time on or prior to the Closing Date, which termination shall be without liability on the part of any party to any other party, except that Sections 5, 7 and 8 hereof shall at all times be effective and shall survive such termination.

 

7.                                      If this Agreement shall be terminated pursuant to Section 9 hereof, none of the Issuers shall then be under any liability to any Underwriter except as provided in Sections 5 and 8 hereof, but, if for any other reason any Securities are not delivered by or on behalf of the Issuers and the Guarantors as provided herein, the Issuers and the Guarantors will, jointly and severally, reimburse the Underwriters through the Representative for all out-of-pocket expenses approved in writing by the Representative, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and

 

18

 

delivery of the Securities not so delivered, but none of the Issuers and the Guarantors shall then be under any further liability to any Underwriter except as provided in Sections 5 and 8 hereof.

 

8.

 

(a)                                 Each of the Issuers and Guarantors will, jointly and severally, indemnify and hold harmless each Underwriter and each person, if any, who controls each Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act and their respective officers, directors, employees, affiliates and selling agents against any losses, claims, damages or liabilities, joint or several, to which such Underwriter or any such affiliate, director, officer, employee, selling agent or controlling person may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (including any information deemed to be a part thereof pursuant to Rule 430B), any Preliminary Prospectus, the Pricing Prospectus, the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Act, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of the Preliminary Prospectus, the Pricing Prospectus, or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in the light of the circumstances under which they were made), and will reimburse each Underwriter and each such affiliate, director, officer, employee, selling agent or controlling person for any legal or other expenses reasonably incurred by such Underwriter or such affiliate, director, officer, employee, selling agent or controlling person in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Issuers and Guarantors shall not be liable to any Underwriter in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission related to such Underwriter and made in the Registration Statement (including any information deemed to be a part thereof pursuant to Rule 430B), any Preliminary Prospectus, the Pricing Prospectus or the Prospectus or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Issuers and the Guarantors by any Underwriter through the Representative expressly for use therein.  For purposes of this Agreement, the only information furnished in writing to the Issuers and the Guarantors by any Underwriter shall be the information set forth in the table in the first paragraph under the heading “Underwriting,” the information in the first paragraph under the heading “Underwriting—Commissions and Discounts” and the information in the first and second paragraphs under the heading “Underwriting—Short Positions,” in each case contained in the Prospectus.

 

(b)                                 Each Underwriter will, severally and not jointly, indemnify and hold harmless each of the Issuers, each Guarantor, and each person, if any, who controls any of the Issuers or any Guarantor within the meaning of Section 15 of the Act or Section 20 of the Exchange Act and their respective officers, directors, employees, affiliates and selling agents against any losses, claims, damages or liabilities to which any Issuer, any Guarantor or any such officer, director, employee, affiliate, selling agent or controlling person may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in

 

19

 

respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (including any information deemed to be a part thereof pursuant to Rule 430B), any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of the Preliminary Prospectus, the Pricing Prospectus, or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in the light of the circumstances under which they were made), in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission related to such Underwriter and was made in the Registration Statement (including any information deemed to be a part thereof pursuant to Rule 430B), any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any such amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Issuers by such Underwriter through the Representative expressly for use therein, which, for purposes of this Agreement, consists only of the information listed above in Section 8(a); and will reimburse any Issuer and any Guarantor, and any such officer, director, employee, affiliate, selling agent or controlling person for any legal  or other expenses reasonably incurred by any Issuer, any Guarantor, or such officer, director, employee, affiliate, selling agent or controlling person in connection with investigating or defending any such action or claim as such expenses are incurred.

 

(c)                                  Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party hereunder except to the extent the indemnifying party has been materially prejudiced by such failure, and the failure to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party other than under Sections 8(a) and 8(b) hereof.  In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party) and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation, provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified

 

20

 

party or parties.  It is understood that the indemnifying party or parties shall not, in connection with any one action or proceeding or separate but substantially similar actions or proceedings arising out of the same general allegations be liable for the fees and expenses of more than one separate firm of attorneys at any time for all indemnified parties (except to the extent that local counsel (in addition to any regular counsel) is required to effectively defend against any such action or proceeding).  Notwithstanding anything contained herein to the contrary, if indemnity may be sought pursuant to Section 8(f) hereof in respect of such action or proceeding, then in addition to such separate firm for the indemnified parties, the indemnifying party shall be liable for the reasonable fees and expenses of not more than one separate firm (in addition to any local counsel) for Goldman Sachs in its capacity as a “qualified independent underwriter” and all persons, if any, who control Goldman Sachs within the meaning of either Section 15 of the Act or Section 20 of the Exchange Act and each affiliate of Goldman Sachs. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party.

 

(d)                                 If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Issuers and the Guarantors on the one hand and the Underwriters on the other from the offering of the Securities.  If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Issuers and the Guarantors on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations.  The relative benefits received by the Issuers and the Guarantors on the one hand and the Underwriters on the other shall be deemed to be in the same respective proportion as the total net proceeds from the offering (before deducting expenses) received by the Issuers and the total underwriting discounts and commissions received by the Underwriters bear to the aggregate offering price of the Securities, in each case as set forth in the table on the cover page of the Prospectus.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuers and the Guarantors on the one hand or the Underwriters on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  Each of the Issuers, the Guarantors and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined

 

21

 

by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the discounts and commissions received by such Underwriter in connection with the Securities underwritten by it and distributed to the public.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations set forth in Schedule I hereto and not joint.

 

(e)                                  The obligations of the Issuers and the Guarantors under this Section 8 shall be in addition to any liability which the respective Issuers and Guarantors may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act and Exchange Act and each broker-dealer affiliate of any Underwriter; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Issuers and the Guarantors and to each person, if any, who controls any of the Issuers or Guarantors within the meaning of the Act or the Exchange Act.

 

(f)                                   Each of the Issuers and Guarantors, jointly and severally,  also agrees to indemnify and hold harmless Goldman Sachs and each person, if any, who controls Goldman Sachs within the meaning of either Section 15 of the Act, or Section 20 of the Exchange Act and each affiliate of Goldman Sachs, from and against any and all losses, claims, damages, liabilities and judgments incurred as a result of Goldman Sachs’ participation as a “qualified independent underwriter” within the meaning of Rule 5121 of FINRA in connection with the offering of the Securities, except for any losses, claims, damages, liabilities, and judgments resulting from Goldman Sachs’ or such controlling person’s or affiliate’s, willful misconduct. Each of the Issuers and Guarantors and the Underwriters agree that Goldman Sachs will not receive any additional benefits hereunder for serving as a “qualified independent underwriter” in connection with the offering and sale of the Securities.

 

9.

 

(a)                                 If any Underwriter shall default in its obligation to purchase the Securities which it has agreed to purchase hereunder on the Closing Date, the Representative may in its discretion arrange for the Representative or another party or other parties to purchase such Securities on the terms contained herein.  If within thirty-six hours after such default by any Underwriter, the Representative does not arrange for the purchase of such Securities, then the Issuers and the Guarantors shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to the Representative to purchase such Securities on such terms.  In the event that, within the respective prescribed periods, the

 

22

 

Representative notifies the Issuers and the Guarantors that the Representative has so arranged for the purchase of such Securities, or the Issuers notify the Representative that it has so arranged for the purchase of such Securities, the Representative or the Issuers shall have the right to postpone such Closing Date for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Issuers agree to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in the Representative’s opinion may thereby be made necessary. The term “Underwriter” as used in this Agreement shall include any person substituted under this Section 9(a) with like effect as if such person had originally been a party to this Agreement with respect to such Securities.

 

(b)                                 If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters by the Representative and the Issuers and the Guarantors as provided in subsection (a) above, the aggregate principal amount of Securities which remains unpurchased does not exceed one-tenth of the aggregate principal amount of all the Securities to be purchased on the Closing Date, then the Issuers shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Securities which such defaulting Underwriter agreed to purchase hereunder on the Closing Date and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Securities which such Underwriter agreed to purchase hereunder) of the Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

 

(c)                                  If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter or Underwriters by the Representative and the Issuers and Guarantors as provided in subsection (a) above, the aggregate number of such Securities which remains unpurchased exceeds one-tenth of the aggregate number of all the Securities to be purchased on the Closing Date, or if the Issuers shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Securities of a defaulting Underwriter or Underwriters, then this Agreement shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Issuers and Guarantors, except for the expenses to be borne by the Issuers and the Guarantors and the Underwriters as provided in Section 5 hereof and the indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

 

10.                               This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit.

 

11.                               The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph or provision hereof.  If any section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

 

12.                               The respective indemnities, agreements, representations, warranties and other statements of the Issuers, the Guarantors, and the several Underwriters, as set forth in this

 

23

 

Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Issuers, or any of the Guarantors, or any officer or director or controlling person of the Issuers or Guarantors, and shall survive delivery of and payment for the Securities.

 

13.                               Any action by the Underwriters hereunder may be taken by the Representative on behalf of the Underwriters, and any such action taken by the Representative shall be binding upon the Underwriters.

 

14.                                     All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to Merrill Lynch, Pierce, Fenner & Smith Incorporated, 50 Rockefeller Plaza, New York, NY 10020, Facsimile: (917) 267-7085, Attention: HY Legal Department with a copy to: Fried, Frank, Harris, Shriver & Jacobson LLP, One New York Plaza, New York, NY 10004, Facsimile: (212) 859-4000, Attention: Valerie Ford Jacob, Esq. and Michael A. Levitt, Esq.; and if to the Issuers or the Guarantors shall be delivered or sent by mail, telex or facsimile transmission to the address of the Issuers set forth in the Registration Statement, Attention: Matthew Haltom, Vice President, Assistant Secretary and Deputy General Counsel, with a copy (which shall not constitute notice) to Alston & Bird LLP, One Atlanta Center, 1201 West Peachtree Street, Atlanta Georgia, 30309-3424, Attn: Scott Ortwein and Kyle Healy; provided, however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriter’s Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Issuers or the Guarantors by the Representative upon request.  Any such statements, requests, notices or agreements shall take effect upon receipt thereof.  Any party hereto may change the address or facsimile number for receipt of communications by giving written notice to the others.

 

15.                               This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Issuers and the Guarantors and, to the extent provided in Sections 7 and 8 hereof, the officers and directors of the Issuers and the Guarantors and each person who controls any Issuer, any Guarantor or any of the Underwriters, and their respective officers, directors, employees, affiliates, selling agents, heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement.  No purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.

 

16.                               Time shall be of the essence of this Agreement.  As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, D.C. is open for business.

 

17.                               Each of the Issuers and the Guarantors acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Issuers and the Guarantors, on the one hand, and the several Underwriters, on the other, (ii) in connection therewith and with the process leading to such transaction, each Underwriter is acting solely as a principal and not the agent or fiduciary of the Issuers and the Guarantors, (iii) no Underwriter has assumed an advisory or fiduciary

 

24

 

responsibility in favor of the Issuers or the Guarantors with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Issuers or the Guarantors on other matters) or any other obligation to the Issuers or the Guarantors except the obligations expressly set forth in this Agreement and (iv) the Issuers and the Guarantors have consulted their own legal and financial advisors to the extent they deemed appropriate.  Each of the Issuers and the Guarantors agrees that it will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Issuers or the Guarantors, in connection with such transaction or the process leading thereto.

 

18.                               The Issuers and the Guarantors acknowledge that each Underwriter is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold long or short positions in debt or equity securities of the companies which may be the subject of the transactions contemplated by this Agreement.

 

19.                               In accordance with the requirements of the USA PATRIOT Act (Title III of Public Law 107-56 (signed into law October 26, 2001)), each Underwriter is required to obtain, verify and record information that identifies its clients, including the Issuers, which information may include the name and address of their respective clients, as well as other information that will allow each Underwriter to properly identify its respective clients.

 

20.                               This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Issuers, the Guarantors and the Underwriters, or any of them, with respect to the subject matter hereof.

 

21.                               This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

22.                               Each of the Issuers, the Guarantors and the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

23.                               This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.  Delivery of an executed counterpart of a signature page to this Agreement by telecopier, facsimile or other electronic transmission (i.e., a “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart thereof.  The section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.

 

[Signature Pages Follow]

 

25

 

If the foregoing is in accordance with your understanding, please sign and return to us four counterparts hereof, and upon the acceptance hereof by the Representative, on behalf of each of the Underwriters, this Agreement and such acceptance hereof shall constitute a binding agreement between each of the Underwriters, each of the Issuers and each of the Guarantors. It is understood that acceptance of this Agreement by the Representative on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Issuers and the Guarantors for examination upon request, but without warranty on the Representative’s part as to the authority of the signers thereof.

 

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
SALLY   HOLDINGS LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Mark J. Flaherty
    
	
 
    	
Name:
    	
Mark J. Flaherty
    
	
 
    	
Title:
    	
Senior Vice President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SALLY   CAPITAL INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Mark J. Flaherty
    
	
 
    	
Name:
    	
Mark J. Flaherty
    
	
 
    	
Title:
    	
Senior Vice President and Chief Financial Officer
    

 

26

 

	
 
    	
ARMSTRONG   McCALL HOLDINGS, INC.

BRENTWOOD BEAUTY   LABORATORIES
   INTERNATIONAL, INC. 

BEYOND   THE ZONE, INC. 

SALLY   INVESTMENT HOLDINGS LLC

ARMSTRONG   MCCALL HOLDINGS, L.L.C.

ARMSTRONG   MCCALL MANAGEMENT, L.C.

BEAUTY   HOLDINGS LLC

SALLY   BEAUTY INTERNATIONAL FINANCE LLC

DIORAMA   SERVICES COMPANY, LLC

SALLY   BEAUTY DISTRIBUTION LLC

BEAUTY   SYSTEMS GROUP LLC

SALLY   BEAUTY SUPPLY LLC

ARMSTRONG   MCCALL, L.P.

COLORESSE, INC.   

ENERGY   OF BEAUTY, INC. 

ESTHETICIAN   SERVICES, INC. 

FOR   PERMS ONLY, INC. 

HIGH   INTENSITY PRODUCTS, INC. 

ION   PROFESSIONAL PRODUCTS, INC. 

LAND   OF DREAMS, INC. 

MIRACLE   LANE, INC. 

VENIQUE, INC.   

NAIL   LIFE, INC. 

NEW   IMAGE PROFESSIONAL PRODUCTS, INC. 

PROCARE   LABORATORIES, INC. 

SALLY   BEAUTY DISTRIBUTION OF OHIO, INC. 

SATIN   STRANDS, INC. 

SEXY   U PRODUCTS, INC. 

SILK   ELEMENTS, INC. 

TANWISE, INC.   

SOREN   ENTERPRISES, INC.

POWER   IQ, INC. 

DESIGN   LENGTHS, INC. 

FEMME   COUTURE INTERNATIONAL, INC. 

GENERIC   VALUE PRODUCTS, INC.

INNOVATIONS   — SUCCESSFUL SALON SERVICES

ARNOLDS, INC.

NEKA   SALON SUPPLY, INC.

AERIAL COMPANY, INC.
    

 

	
 
    	
As Guarantors
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Mark J. Flaherty
    
	
 
    	
 
    	
 
    	
Name: Mark J. Flaherty
    
	
 
    	
 
    	
 
    	
Senior Vice President and Chief Financial Officer
    

 

27

 

	
 
    	
SALLY   BEAUTY HOLDINGS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
As Guarantor
    	
 
    

 

	
 
    	
 
    	
By:
    	
/s/ Gary G. Winterhalter
    
	
 
    	
 
    	
 
    	
Name: Gary G. Winterhalter
    
	
 
    	
 
    	
 
    	
President and Chief Executive Officer
    

 

	
 
    	
SALON   SUCCESS INTERNATIONAL, LLC
    
	
 
    	
 
    
	
 
    	
As Guarantor
    	
 
    

 

	
 
    	
 
    	
By:
    	
/s/ Gary G. Winterhalter
    
	
 
    	
 
    	
 
    	
Name: Gary G. Winterhalter
    
	
 
    	
 
    	
 
    	
Manager
    

 

28

 

The foregoing Underwriting Agreement is hereby confirmed and accepted by the Underwriters as of the date first above written:

 

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

 

As Representative of the several underwriters named in Schedule I hereto

 

 

	
By:
    	
/s/   Adam Cady
    	
 
    
	
 
    	
Adam   Cady
    	
 
    
	
 
    	
Managing   Director
    	
 
    
	
 
    	
 
    	
 
    

29

 

SCHEDULE I

 

	
Name of Underwriter
    	
 
    	
Aggregate Principal
   Amount of Securities to be
   Purchased
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Merrill Lynch, Pierce, Fenner & Smith  
    Incorporated 
    	
 
    	
$
    	
50,000,000
    	
 
    
	
J.P. Morgan Securities LLC 
    	
 
    	
35,000,000
    	
 
    
	
Wells Fargo Securities, LLC 
    	
 
    	
35,000,000
    	
 
    
	
Credit Suisse Securities (USA) LLC 
    	
 
    	
20,000,000
    	
 
    
	
Deutsche Bank Securities Inc. 
    	
 
    	
20,000,000
    	
 
    
	
Goldman, Sachs & Co. 
    	
 
    	
20,000,000
    	
 
    
	
RBC Capital Markets, LLC 
    	
 
    	
20,000,000
    	
 
    
	
Total:
    	
 
    	
$
    	
200,000,000
    	
 
    

 

I-1

 

SCHEDULE II(a)

 

Issuer Free Writing Prospectuses Included in the Pricing Disclosure Package: Final Term Sheet

 

Other Information Included in the Pricing Disclosure Package: None.

 

II(a)-1

 

SCHEDULE II(b)

 

Issuer Free Writing Prospectuses not included in the Pricing Disclosure Package:

 

1.              The electronic road show made available in connection with the offering.

 

II(b)-1

 

SCHEDULE III

 

Subsidiary (Jurisdiction)

 

Sally Holdings LLC (Delaware)

Beauty Systems Group LLC (Delaware)

Armstrong McCall Holdings, Inc. (Texas)

Arnolds, Inc. (Arkansas)

Armstrong McCall Holdings, L.L.C. (Delaware)

Armstrong McCall Management, L.C. (Texas)

Armstrong McCall, L.P. (Texas)

Innovations-Successful Salon Services (California)

Procare Laboratories, Inc. (Delaware)

Neka Salon Supply, Inc. (New Hampshire)

Salon Success International, LLC (Florida)

Aerial Company, Inc. (Wisconsin) (1)

My Best Friend’s Hair, LLC (Indiana)

Sally Beauty Supply LLC (Delaware)

Diorama Services Company, LLC (Delaware)

Sally Capital Inc. (Delaware)

Sally Beauty Distribution LLC (Delaware)

Sally Beauty International Finance LLC (Delaware)

Beauty Holding LLC (Delaware)

Beyond the Zone, Inc. (Delaware)

Silk Elements, Inc. (Delaware)

High Intensity Products, Inc. (Delaware)

Nail Life, Inc. (Delaware)

Sexy U Products, Inc. (Delaware)

For Perms Only, Inc. (Delaware)

Energy of Beauty, Inc. (Delaware)

Miracle Lane, Inc. (Delaware)

Tanwise, Inc. (Delaware)

Satin Strands, Inc. (Delaware)

Brentwood Beauty Laboratories International, Inc. (Texas)

Ion Professional Products, Inc. (Delaware)

New Image Professional Products, Inc. (Delaware)

Esthetician Services Inc. (Delaware)

Femme Couture International, Inc. (Delaware)

Generic Value Products, Inc. (Delaware)

Venique, Inc. (Delaware)

Land of Dreams, Inc. (Delaware)

Coloresse, Inc. (Delaware)

Design Lengths, Inc. (Delaware)

Power IQ, Inc. (Delaware)

Soren Enterprises, Inc. (Delaware)

 

III-1

 

Sally Beauty Distribution of Ohio, Inc. (Delaware)

Sally Beauty International, Inc. (Delaware)

Sally Beauty Supply BV (Netherlands)

Pro-Duo Deutschland GmbH (Germany)

Sally Beauty Canada Holdings LLC (Delaware)

SBCBSG Company de Mexico, S. de R.L. de C.V. (Mexico)

SBIFCO Company de Mexico, S.A. de C.V. (Mexico)

Sally Beauty International Holdings, C.V. (Netherlands)

Sally International Holdings LLC (Delaware)

Sally Beauty Holdings LP (Bermuda)

Sally EURO Holdings LLC (Delaware)

Sally CAD Holdings LLC (Delaware)

Sally GBP Holdings LLC (Delaware)

Gen X Beauty LLC (Delaware)

Sally Beauty Worldwide Holdings BV (Netherlands)

SBH Finance B.V. (Netherlands)

Sally Beauty de Puerto Rico, Inc. (Puerto Rico)

Sally Beauty Netherlands BV (Netherlands)

Sally Salon Services (Ireland) Ltd (Ireland)

Sally Beauty Colombia S.A.S. (Colombia)

Pro-Duo Spain SL (Spain)

Salon del Exito, S.L. (Spain)

Sally UK Holdings Limited (England)

BSG Canada Holdings Company (Nova Scotia)

Beauty Systems Group (Canada), Inc. (New Brunswick)

Sally Salon Services Ltd (England)

MHR Limited (England)

Sally Chile Holding SpA (Chile)

Sally Peru Holdings S.A.C. (Peru)

Sinelco Group BVBA (Belgium)

Sinelco International BVBA (Belgium)

Sinelco Italiana SRL (Italy)

Sinelco France SAS (France)

Salon Services (Hair and Beauty Supplies) Ltd (Scotland)

Salon Services Franchising Ltd (Scotland)

Salon Success Limited (England)

Ogee Limited (England)

Pro-Duo NV (Belgium)

Pro-Duo France SAS (France)

Vigox BVBA (Belgium)

Montane Importaciones, S.L. (Spain)

Pro-Duo Nederland BV (Netherlands)

Wacos NV (Belgium)

Ainat Lilibeth, S.L. (Spain)

Kapperscentrale Bauwens N.V. (Belgium)

Sally Chile Global Holdings SpA (Chile)

 

III-2

 

Sally Chile Worldwide Holdings SpA (Chile)

Sally Beauty Brasil Participacoes LTDA. (Brazil)

 

III-3Exhibit 4.1

 

 

SANDISK CORPORATION

 

as Issuer

 

and

 

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

 

as Trustee

 

INDENTURE

 

Dated as of October 29, 2013

 

0.50% Convertible Senior Notes due 2020

 

 

 

Table of Contents

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I
    
	
DEFINITIONS
    
	
 
    	
 
    
	
Section 1.01.   Definitions
    	
1
    
	
 
    	
 
    
	
Section 1.02.   References to Interest
    	
11
    
	
 
    	
 
    
	
ARTICLE II
    
	
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND   EXCHANGE OF NOTES
    
	
 
    	
 
    
	
Section 2.01.   Designation and Amount
    	
11
    
	
 
    	
 
    
	
Section 2.02.   Form of Notes
    	
11
    
	
 
    	
 
    
	
Section 2.03.   Date and Denomination of   Notes; Payments of Interest
    	
12
    
	
 
    	
 
    
	
Section 2.04.   Date and Denomination of   Notes
    	
13
    
	
 
    	
 
    
	
Section 2.05.   Execution, Authentication   and Delivery of Notes
    	
13
    
	
 
    	
 
    
	
Section 2.06.   Exchange and Registration of   Transfer of Notes; Restrictions on Transfer; Depositary
    	
14
    
	
 
    	
 
    
	
Section 2.07.   Mutilated, Destroyed, Lost   or Stolen Notes
    	
19
    
	
 
    	
 
    
	
Section 2.08.   Temporary Notes
    	
20
    
	
 
    	
 
    
	
Section 2.09.   Cancellation of Notes   Paid, Etc.
    	
21
    
	
 
    	
 
    
	
Section 2.10.   CUSIP Numbers
    	
21
    
	
 
    	
 
    
	
Section 2.11.   Additional Notes,   Repurchases
    	
21
    
	
 
    	
 
    
	
ARTICLE III
    
	
PARTICULAR COVENANTS OF THE COMPANY
    
	
 
    	
 
    
	
Section 3.01.   Payment of Principal and   Interest
    	
21
    
	
 
    	
 
    
	
Section 3.02.   Maintenance of Office or   Agency
    	
22
    
	
 
    	
 
    
	
Section 3.03.   Appointments to Fill   Vacancies in Trustee’s Office
    	
22
    
	
 
    	
 
    
	
Section 3.04.   Provisions as to Paying   Agent
    	
22
    
	
 
    	
 
    
	
Section 3.05.   Existence
    	
23
    

 

i

 

	
Section 3.06.   Stay, Extension and Usury   Laws
    	
23
    
	
 
    	
 
    
	
Section 3.07.   Compliance Certificate;   Statements as to Defaults
    	
24
    
	
 
    	
 
    
	
Section 3.08.   Further Instruments and Acts
    	
24
    
	
 
    	
 
    
	
ARTICLE IV
    
	
LISTS OF NOTEHOLDERS AND REPORTS BY THE COMPANY
    
	
 
    	
 
    
	
Section 4.01.   Lists of Noteholders
    	
24
    
	
 
    	
 
    
	
Section 4.02.   Preservation of Lists
    	
24
    
	
 
    	
 
    
	
Section 4.03.   Reports by the Company
    	
24
    
	
 
    	
 
    
	
ARTICLE V
    
	
DEFAULTS AND REMEDIES
    
	
 
    	
 
    
	
Section 5.01.   Events of Default
    	
26
    
	
 
    	
 
    
	
Section 5.02.   Payments of Notes on   Default; Suit Therefor
    	
28
    
	
 
    	
 
    
	
Section 5.03.   Application of Monies   Collected by Trustee
    	
29
    
	
 
    	
 
    
	
Section 5.04.   Proceedings by Noteholders
    	
30
    
	
 
    	
 
    
	
Section 5.05.   Proceedings by Trustee
    	
31
    
	
 
    	
 
    
	
Section 5.06.   Remedies Cumulative and   Continuing
    	
31
    
	
 
    	
 
    
	
Section 5.07.   Direction of Proceedings and   Waiver of Defaults by Majority of Noteholders
    	
31
    
	
 
    	
 
    
	
Section 5.08.   Notice of Defaults
    	
32
    
	
 
    	
 
    
	
Section 5.09.   Undertaking to Pay Costs
    	
32
    
	
 
    	
 
    
	
Section 5.10.   Additional Interest
    	
32
    
	
 
    	
 
    
	
ARTICLE VI
    
	
CONCERNING THE TRUSTEE
    
	
 
    	
 
    
	
Section 6.01.   Duties and Responsibilities   of Trustee
    	
33
    
	
 
    	
 
    
	
Section 6.02.   Reliance on Documents,   Opinions, Etc.
    	
35
    
	
 
    	
 
    
	
Section 6.03.   No Responsibility for   Recitals, Etc.
    	
36
    
	
 
    	
 
    
	
Section 6.04.   Trustee, Paying Agents,   Conversion Agents or Registrar May
    	
 
    

 

ii

 

	
Own Notes
    	
36
    
	
 
    	
 
    
	
Section 6.05.   Monies to Be Held in Trust
    	
36
    
	
 
    	
 
    
	
Section 6.06.   Compensation and Expenses of   Trustee
    	
37
    
	
 
    	
 
    
	
Section 6.07.   Officers’ Certificate as   Evidence
    	
37
    
	
 
    	
 
    
	
Section 6.08.   Conflicting Interests of   Trustee
    	
38
    
	
 
    	
 
    
	
Section 6.09.   Eligibility of Trustee
    	
38
    
	
 
    	
 
    
	
Section 6.10.   Resignation or Removal of   Trustee
    	
38
    
	
 
    	
 
    
	
Section 6.11.   Acceptance by Successor   Trustee
    	
39
    
	
 
    	
 
    
	
Section 6.12.   Succession by Merger, Etc.
    	
40
    
	
 
    	
 
    
	
Section 6.13.   Limitation on Rights of   Trustee as Creditor
    	
40
    
	
 
    	
 
    
	
Section 6.14.   Trustee’s Application for   Instructions from the Company
    	
40
    
	
 
    	
 
    
	
ARTICLE VII
    
	
CONCERNING THE NOTEHOLDERS
    
	
 
    	
 
    
	
Section 7.01.   Action by Noteholders
    	
41
    
	
 
    	
 
    
	
Section 7.02.   Proof of Execution by   Noteholders
    	
41
    
	
 
    	
 
    
	
Section 7.03.   Who Are Deemed Absolute   Owners
    	
41
    
	
 
    	
 
    
	
Section 7.04.   Company-Owned Notes   Disregarded
    	
42
    
	
 
    	
 
    
	
Section 7.05.   Revocation of Consents;   Future Holders Bound
    	
42
    
	
 
    	
 
    
	
ARTICLE VIII
    
	
NOTEHOLDERS’ MEETINGS
    
	
 
    	
 
    
	
Section 8.01.   Purpose of Meetings
    	
43
    
	
 
    	
 
    
	
Section 8.02.   Call of Meetings by Trustee
    	
43
    
	
 
    	
 
    
	
Section 8.03.   Call of Meetings by Company   or Noteholders
    	
43
    
	
 
    	
 
    
	
Section 8.04.   Qualifications for Voting
    	
44
    
	
 
    	
 
    
	
Section 8.05.   Regulations
    	
44
    
	
 
    	
 
    
	
Section 8.06.   Voting
    	
44
    

 

iii

 

	
Section 8.07.   No Delay of Rights by   Meeting
    	
45
    
	
 
    	
 
    
	
ARTICLE IX
    
	
SUPPLEMENTAL INDENTURES
    
	
 
    	
 
    
	
Section 9.01.   Supplemental Indentures   Without Consent of Noteholders
    	
45
    
	
 
    	
 
    
	
Section 9.02.   Supplemental Indentures With   Consent of Noteholders
    	
46
    
	
 
    	
 
    
	
Section 9.03.   Effect of Supplemental   Indentures
    	
47
    
	
 
    	
 
    
	
Section 9.04.   Notation on Notes
    	
47
    
	
 
    	
 
    
	
Section 9.05.   Evidence of Compliance of   Supplemental Indenture to Be Furnished Trustee
    	
47
    
	
 
    	
 
    
	
ARTICLE X
    
	
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
    
	
 
    	
 
    
	
Section 10.01.   Company   May Consolidate, etc. on Certain Terms
    	
48
    
	
 
    	
 
    
	
Section 10.02.   Successor Corporation to be   Substituted
    	
48
    
	
 
    	
 
    
	
Section 10.03.   Officers’ Certificate and   Opinion of Counsel to Be Given Trustee
    	
49
    
	
 
    	
 
    
	
ARTICLE XI
    
	
SATISFACTION AND DISCHARGE OF INDENTURE
    
	
 
    	
 
    
	
Section 11.01.   Discharge of Indenture
    	
49
    
	
 
    	
 
    
	
Section 11.02.   Deposited Monies to Be Held   in Trust by Trustee
    	
49
    
	
 
    	
 
    
	
Section 11.03.   Paying Agent to Repay   Monies Held
    	
50
    
	
 
    	
 
    
	
Section 11.04.   Return of Unclaimed Monies
    	
50
    
	
 
    	
 
    
	
Section 11.05.   Reinstatement
    	
50
    
	
 
    	
 
    
	
ARTICLE XII
    
	
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS   AND DIRECTORS
    
	
 
    	
 
    
	
Section 12.01.   Indenture and Notes Solely   Corporate Obligations
    	
50
    
	
 
    	
 
    
	
ARTICLE XIII
    
	
CONVERSION OF NOTES
    
	
 
    	
 
    
	
Section 13.01.   Conversion Privilege
    	
51
    

 

iv

 

	
Section 13.02.   Conversion Procedure
    	
54
    
	
 
    	
 
    
	
Section 13.03.   [Intentionally Omitted]
    	
57
    
	
 
    	
 
    
	
Section 13.04.   Adjustment of Conversion   Rate
    	
57
    
	
 
    	
 
    
	
Section 13.05.   Shares to Be Fully Paid
    	
65
    
	
 
    	
 
    
	
Section 13.06.   Effect of Reclassification,   Consolidation, Merger or Sale
    	
66
    
	
 
    	
 
    
	
Section 13.07.   Certain Covenants
    	
67
    
	
 
    	
 
    
	
Section 13.08.   Responsibility of Trustee
    	
68
    
	
 
    	
 
    
	
Section 13.09.   Notice to Holders Prior to   Certain Actions
    	
68
    
	
 
    	
 
    
	
Section 13.10.   Shareholder Rights Plans
    	
69
    
	
 
    	
 
    
	
ARTICLE XIV
    
	
REPURCHASE OF NOTES AT OPTION OF HOLDERS
    
	
 
    	
 
    
	
Section 14.01.   Repurchase at Option of   Holders Upon a Designated Event
    	
69
    
	
 
    	
 
    
	
ARTICLE XV
    
	
MISCELLANEOUS PROVISIONS
    
	
 
    	
 
    
	
Section 15.01.   Provisions Binding on   Company’s Successors
    	
73
    
	
 
    	
 
    
	
Section 15.02.   Official Acts by Successor   Corporation
    	
73
    
	
 
    	
 
    
	
Section 15.03.   Addresses for   Notices, Etc.
    	
73
    
	
 
    	
 
    
	
Section 15.04.   Governing Law
    	
74
    
	
 
    	
 
    
	
Section 15.05.   Evidence of Compliance with   Conditions Precedent; Certificates and Opinions of Counsel to Trustee
    	
74
    
	
 
    	
 
    
	
Section 15.06.   Legal Holidays
    	
74
    
	
 
    	
 
    
	
Section 15.07.   No Security Interest   Created
    	
74
    
	
 
    	
 
    
	
Section 15.08.   Benefits of Indenture
    	
75
    
	
 
    	
 
    
	
Section 15.09.   Table of Contents,   Headings, Etc.
    	
75
    
	
 
    	
 
    
	
Section 15.10.   Authenticating Agent
    	
75
    
	
 
    	
 
    
	
Section 15.11.   Execution in Counterparts
    	
76
    

 

v

 

	
Section 15.12.   Waiver of Jury Trial
    	
76
    
	
 
    	
 
    
	
Section 15.13.   Force Majeure
    	
76
    
	
 
    	
 
    
	
Section 15.14.   Calculations in Respect of   the Notes
    	
76
    
	
 
    	
 
    
	
Schedule A — Additional Shares
    	
 
    
	
 
    	
 
    
	
Exhibit A — Form of Note
    	
 
    

 

vi

 

INDENTURE dated as of October 29, 2013 between SanDisk Corporation, a Delaware corporation, as issuer (hereinafter sometimes called the “Company,” as more fully set forth in Section 1.01), and The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee (hereinafter sometimes called the “Trustee,” as more fully set forth in Section 1.01).

 

WITNESSETH:

 

WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issue of its 0.50% Convertible Senior Notes due 2020 (hereinafter sometimes called the “Notes”), initially in an aggregate principal amount not to exceed $1,500,000,000, and in order to provide the terms and conditions upon which the Notes are to be authenticated, issued and delivered, the Company has duly authorized the execution and delivery of this Indenture; and

 

WHEREAS, the Notes, the certificate of authentication to be borne by the Notes, a form of assignment, a form of the Designated Event Repurchase Notice, a form of conversion notice are to be substantially in the forms hereinafter provided for; and

 

WHEREAS, all acts and things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee or a duly authorized authenticating agent, as in this Indenture provided, the valid, binding and legal obligations of the Company, and to constitute these presents a valid agreement according to its terms, have been done and performed, and the execution of this Indenture and the issue hereunder of the Notes have in all respects been duly authorized.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

That in order to declare the terms and conditions upon which the Notes are, and are to be, authenticated, issued and delivered, and in consideration of the premises and of the purchase and acceptance of the Notes by the holders thereof, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective holders from time to time of the Notes (except as otherwise provided below), as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01.  Definitions.

 

(a)                                 The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01.  All other terms used in this Indenture, which are 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 Securities Act as in force at the date of the execution of this Indenture.  The words “herein,” “hereof,” “hereunder,” and words of similar import refer to this 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.

 

 

“Additional Interest” means all amounts, if any, payable pursuant to Section 4.03(d), Section 4.03(e) and Section 5.10, as applicable.

 

“Additional Shares” shall have the meaning specified in Section 13.01(e).

 

“Adjustment Determination Date” shall have the meaning specified in Section 13.04(j).

 

“Adjustment Event” shall have the meaning specified in Section 13.04(j).

 

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

 

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

 

“Bid Solicitation Agent” means the Company or such other person (which shall not be the Trustee) as may be appointed, from time to time, by the Company to solicit bids for the Trading Price of the Notes in accordance with Section 13.01(a)(i).  The Company shall initially act as the Bid Solicitation Agent.

 

“Board of Directors” means the Board of Directors of the Company or a committee of such Board duly authorized to act for it hereunder.

 

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors, or duly authorized committee thereof (to the extent permitted by applicable law), and to be in full force and effect on the date of such certification, and delivered to the Trustee.

 

“Business Day” means any day, except a Saturday, Sunday or legal holiday on which banking institutions in The City of New York are authorized or obligated by law or executive order to close.

 

“Capital Lease” means a lease that, in accordance with accounting principles generally accepted in the United States of America, would be recorded as a capital lease on the balance sheet of the lessee.

 

“Capital Stock” means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity.

 

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

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

2

 

“Commission” means the Securities and Exchange Commission.

 

“Common Stock” means, subject to Section 13.06, shares of common stock of the Company, par value $0.001 per share, at the date of this 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 SanDisk Corporation, a Delaware corporation, and subject to the provisions of Article X, shall include its successors and assigns and, to the extent the obligations hereunder shall be to more than one entity pursuant to Section 13.06, shall include each of such entities.

 

“Company Order” means a written order of the Company, signed by (a) the Company’s Chief Executive Officer, President, Executive or Senior Vice President, Managing Director or any Vice President (whether or not designated by a number or numbers or word or words added before or after the title “Vice President”) and (b) any such other officer designated in (a) or the Company’s Treasurer or Assistant Treasurer or Secretary or any Assistant Secretary, and delivered to the Trustee.

 

“Conversion Agent” shall have the meaning specified in Section 3.02.

 

“Conversion Date” shall have the meaning specified in Section 13.02(c).

 

“Conversion Obligation” shall have the meaning specified in Section 13.01(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 13.01(a).

 

“Corporate Trust Office” or other similar term means the principal corporate trust office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office is, at the date as of which this Indenture is dated, located at 700 S. Flower Street, Suite 500, Los Angeles, California 90017, Attention: Corporate Unit; SanDisk Corporation.

 

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

 

“Daily Conversion Value” means, for each of the 20 consecutive Trading Days during the Observation Period, one-twentieth (1/20) of the product of (a) the applicable Conversion Rate and (b) the Daily VWAP of the Common Stock (or the Reference Property pursuant to

 

3

 

Section 13.06) on such day, as determined by the Company.  Any such determination by the Company will be conclusive absent manifest error.

 

“Daily Settlement Amount,” for each of the 20 Trading Days during the Observation Period, shall consist of:

 

(a)                                 cash equal to the lesser of $50 and the Daily Conversion Value relating to such day; and

 

(b)                                 if such Daily Conversion Value exceeds $50, a number of shares of Common Stock equal to (i) the difference between such Daily Conversion Value and $50, divided by (ii) the Daily VWAP of the Common Stock for such day.

 

“Daily VWAP” for the Common Stock means, for each of the 20 consecutive Trading Days during the Observation Period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “SNDK <equity> AQR” in respect of the period from 9:30 a.m. to 4:00 p.m. (New York City time) on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of Common Stock on such Trading Day as the Board of Directors determines in good faith using a volume-weighted method).

 

“Default” means any event that is, or after notice or passage of time, or both, would be, an Event of Default.

 

“Defaulted Interest” shall have the meaning specified in Section 2.03.

 

“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the person specified in Section 2.06(d) 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 Indenture, and thereafter, “Depositary” shall mean or include such successor.

 

“Designated Event” means the occurrence of either a Fundamental Change or a Termination of Trading.

 

“Designated Event Company Notice” shall have the meaning specified in Section 14.02(b).

 

“Designated Event Expiration Time” shall have the meaning specified in Section 14.02(b).

 

“Designated Event Repurchase Date” shall have the meaning specified in Section 14.02(a).

 

“Designated Event Repurchase Notice” shall have the meaning specified in Section 14.02(a)(i).

 

“Designated Event Repurchase Price” shall have the meaning specified in Section 14.02(a).

 

4

 

“Distributed Property” shall have the meaning specified in Section 13.04(c).

 

“Effective Date” shall have the meaning specified in Section 13.01(e)(ii).

 

“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.

 

“Ex-Dividend Date” means, (a) with respect to Section 13.01(b), the first date upon which a sale of the Common Stock does not automatically transfer the right to receive the relevant dividend from the seller of the Common Stock to its buyer, and (b) in all other cases, with respect to any issuance or distribution on the Common Stock or any other equity security, the first date on which the shares of Common Stock or such other equity security trade on the applicable exchange or in the applicable market, regular way, without the right to receive such issuance or distribution.

 

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

 

“Form of Assignment and Transfer” shall mean the “Form of Assignment and Transfer” attached to the Form of Note attached hereto as Exhibit A.

 

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

 

(1)                         any Person acquires Beneficial Ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of shares of the Company’s Capital Stock entitling the Person to exercise 50% or more of the total voting power of all shares of the Company’s Capital Stock entitled to vote generally in elections of directors, other than an acquisition by the Company, any of the Company’s Subsidiaries or any of the Company’s employee benefit plans;

 

(2)                         the Company merges or consolidates with or into any other Person (other than a Subsidiary), another Person merges with or into the Company, or the Company conveys, sells, transfers or leases all or substantially all of Company’s assets to another Person, other than any transaction:

 

(i)             that does not result in a reclassification, conversion, exchange or cancellation of Company’s outstanding Common Stock;

 

(ii)          pursuant to which the holders of 50% or more of the voting power of all shares of Capital Stock entitled to vote generally in the election of directors of the Company immediately prior to the transaction have the entitlement to exercise, directly or indirectly, 50% or more of the voting power of all shares of Capital Stock entitled to vote generally in the election of directors of the continuing or surviving corporation immediately after the transaction; or

 

5

 

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

 

However, notwithstanding the foregoing, Noteholders will not have the right to require the Company to repurchase any Notes under clauses (1) or (2) above (and the Company will not be required to deliver the Designated Event Repurchase Notice incidental thereto) if at least 90% of the consideration paid for the Company’s Common Stock (excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights) in a merger or consolidation or a conveyance, sale, transfer or lease otherwise constituting a Fundamental Change under clause (2) above consists of shares of common stock traded on the New York Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market or another U.S. national securities exchange or quoted on an established automated over-the-counter trading market in the United States (or will be so traded or quoted immediately following the merger or consolidation) and, as a result of the merger or consolidation, the Notes become convertible into such shares of such common stock, excluding cash payments for fractional shares.

 

“Global Note” shall have the meaning specified in Section 2.06(b).

 

“Indebtedness” as applied to any Person, means (a) obligations, contingent or otherwise, for money borrowed (other than unamortized debt discount or premium); (b) reimbursement and other obligations pertaining to letters of credit issued for the account of such Person; (c) obligations under any swap, cap, collar, forward purchase contract, derivatives contract or other similar agreement pursuant to which such Person hedges risks related to interest rates, currency exchange rates, commodity prices, financial market conditions or other risks incurred by such Person in the operation of its business; (d) obligations evidenced by bonds, debentures, promissory notes or other instruments or arrangements; (e) obligations as lessee under a Capital Lease; and (f) obligations of such Person under any amendments, renewals, extensions, modifications and refundings of any such Indebtedness or obligations listed in clause (a), (b), (c), (d) or (e) above.  All indebtedness of any type described in the immediately preceding sentence which is secured by a lien upon property owned by such Person, although such Person has not assumed or become liable for the payment of such Indebtedness, shall for all purposes be deemed to be Indebtedness of such Person.  All indebtedness for borrowed money incurred by any other Persons which is directly guaranteed as to payment of principal by such Person shall for all purposes be deemed to be Indebtedness of such Person, but no other contingent obligation of such Person in respect of indebtedness incurred by any other Persons shall for any purpose be deemed to be indebtedness of such Person.

 

“Indenture” means this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented.

 

“Initial Dividend Threshold” shall have the meaning specified in Section 13.04(d).

 

“Interest Payment Date” means April 15 and October 15 of each year, beginning on April 15, 2014.

 

6

 

“Last Reported Sale Price” means, with respect to the Common Stock or any other security for which a Last Reported Sale Price must be determined, on any date, the closing sale price per share of the Common Stock or unit of such other security (or, if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on such date as reported by NASDAQ Global Select Market, or if the Common Stock is not then traded on NASDAQ Global Select Market, on the principal U.S. national or regional securities exchange on which it is then listed, if any.  If the Common Stock or such other security is not listed for trading on a United States national or regional securities exchange and not reported by NASDAQ Global Select Market 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 OTC Markets Group Inc. or similar organization.  In absence of such quotation, 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.  Any such determination by the Company will be conclusive absent manifest error.

 

“Market Disruption Event” means the occurrence or existence for a period of more than one-half hour in the aggregate on any Scheduled Trading Day for the Common Stock of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by NASDAQ Global Select Market or otherwise) in the Common Stock or in any options, contracts or future contracts relating to the Common Stock, and such suspension or limitation occurs or exists at any time before 1:00 p.m. (New York City time) on such day.

 

“Maturity Date” means October 15, 2020.

 

“Measurement Period” shall have the meaning specified in Section 13.01(a)(i).

 

“Merger Event” shall have the meaning specified in Section 13.06.

 

“NASDAQ Global Market” shall mean the NASDAQ Global Market of The NASDAQ Stock Market, Inc. and any successor market or exchange.

 

“NASDAQ Global Select Market” shall mean the NASDAQ Global Select Market of The NASDAQ Stock Market, Inc. and any successor market or exchange.

 

“Note” or “Notes” means any note or notes, as the case may be, authenticated and delivered under this Indenture.

 

“Noteholder” 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 Note Register.

 

“Note Register” shall have the meaning specified in Section 2.06(a).

 

“Note Registrar” shall have the meaning specified in Section 2.06(a).

 

7

 

“Notice of Conversion” shall have the meaning specified in Section 13.02(c).

 

“Observation Period” with respect to any Note means (a) if the relevant Conversion Date occurs prior to the 25th Scheduled Trading Day preceding October 15, 2020, the 20 consecutive Trading Day period beginning on and including the second Trading Day after such Conversion Date, and (b) if the relevant Conversion Date occurs on or after the 25th Scheduled Trading Day preceding October 15, 2020, the 20 consecutive Trading Day period beginning on, and including, the 22nd Scheduled Trading Day immediately preceding October 15, 2020.

 

“Officers’ Certificate,” when used with respect to the Company, means a certificate signed by (a) one of the President, the Chief Executive Officer, any Executive or Senior Vice President, Managing Director or any Vice President (whether or not designated by a number or numbers or word added before or after the title “Vice President”) and (b) by any such other officer designated in (a) or by one of the Treasurer or any Assistant Treasurer, Secretary or any Assistant Secretary or Controller of the Company, which is delivered to the Trustee.  Each such certificate shall include the statements provided for in Section 15.05 if and to the extent required by the provisions of such Section.  One of the officers giving an Officers’ Certificate pursuant to Section 5.08 shall be the principal executive, financial or accounting officer of the Company.

 

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

 

“Opinion of Counsel” means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company, which is delivered to the Trustee.  Each such opinion shall include the statements provided for in Section 15.05 if and to the extent required by the provisions of such Section.

 

“outstanding,” when used with reference to Notes, shall, subject to the provisions of Section 7.04, mean, as of any particular time, all Notes authenticated and delivered by the Trustee under this Indenture, except:

 

(a)                                 Notes theretofore canceled by the Trustee or accepted by the Trustee for cancellation,

 

(b)                                 Notes, or portions thereof, for the payment or repurchase of which monies in the necessary amount shall have been deposited in trust with the Trustee or with any Paying Agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent);

 

(c)                                  Notes in lieu of which, or in substitution for which, other Notes shall have been authenticated and delivered pursuant to the terms of Section 2.07 unless proof satisfactory to the Trustee is presented that any such Notes are held by protected purchasers in due course; and

 

(d)                                 Notes converted pursuant to Article XIII.

 

“Paying Agent” shall have the meaning specified in Section 3.02.

 

8

 

“Person” means an individual, a corporation, a limited liability company, an association, a partnership, a joint venture, a joint stock company, a trust, an unincorporated organization or a government or an agency or a political subdivision thereof, including any syndicate or group that would be deemed to be a “person” under Section 13(d)(3) of the Exchange Act.

 

“Predecessor Note” of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or stolen Note shall be deemed to evidence the same debt as the lost, destroyed or stolen Note that it replaces.

 

“Record Date” shall have the meaning specified in Section 13.04(f).

 

“Reference Property” shall have the meaning specified in Section 13.06(b).

 

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

 

“Resale Restriction Termination Date” shall have the meaning specified in Section 2.06(d).

 

“Responsible Officer,” when used with respect to the Trustee, shall mean an officer of the Trustee in the Corporate Trust Office, having direct responsibility for the administration of this Indenture, and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

 

“Restricted Securities” shall have the meaning specified in Section 2.06(e).

 

“Rights Plan” means that certain Rights Agreement dated September 15, 2003 between the Company and Computershare Trust Company, Inc., as rights agent, as amended from time to time.

 

“Rule 144A” means Rule 144A as promulgated under the Securities Act.

 

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

 

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

 

“Spin-Off” shall have the meaning specified in Section 13.04(c).

 

“Significant Subsidiary” means such Subsidiary of the Company as meets the definition of “significant subsidiary” in Rule 1-02 of Regulation S-X promulgated by the Commission as in effect on the original date of issuance of the Notes.

 

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“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 13.01(d), which shall be equal to (a) if holders of Common Stock receive only cash in such Fundamental Change, the cash amount paid per share of Common Stock and (b) in all other cases, the average of the Last Reported Sale Prices of the Common Stock over the five consecutive Trading Day period ending on, and including, the Trading Day preceding the Effective Date of the Fundamental Change.

 

“Subsidiary” of the Company means (a) a corporation a majority of whose Capital Stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by the Company, by the Company and one or more Subsidiaries of the Company or by one or more Subsidiaries of the Company or (b) any other Person (other than a corporation) in which the Company, one or more Subsidiaries of the Company or the Company and one or more Subsidiaries of the Company, directly or indirectly, at the date of determination thereof, has greater than a 50% ownership interest.

 

“Successor Company” shall have the meaning specified in Section 10.01(a).

 

“Termination of Trading” means the Common Stock is neither listed for trading on the New York Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market or another U.S. national securities exchange.

 

“Trading Day” means a day during which (a) trading in Common Stock generally occurs, (b) there is no Market Disruption Event and (c) 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 the Common Stock is not admitted for trading or quotation on or by any 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.

 

“Trading Price” with respect to the Notes, on any date of determination, means the average of the secondary market bid quotations obtained by the Bid Solicitation Agent for $2.0 million principal amount of Notes at approximately 3:30 p.m., New York City time, on such determination date from three independent nationally recognized securities dealers selected by the Company; provided that if three such bids cannot reasonably be obtained by the Bid Solicitation Agent, but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Bid Solicitation Agent, that one bid shall be used.  If the Bid Solicitation Agent cannot reasonably obtain at least one bid for $2.0 million principal amount of Notes from a nationally recognized securities dealer, then the Trading Price per $1,000 principal amount of Notes will be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate on such determination date.  Any such determination by the Bid Solicitation Agent will be conclusive absent manifest error.  If (a) the Company is not acting as Bid Solicitation Agent, and the Company does not, when it is required to, instruct the Bid Solicitation Agent to obtain bids, or if the Company gives such instruction to the Bid Solicitation Agent, and the Bid Solicitation Agent fails to make such determination, or (b) the Company is acting as Bid Solicitation Agent and the Company fails to make such determination, then, in either case, the “Trading Price” per

 

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$1,000 principal amount of Notes shall be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate on each Trading Day of such failure.

 

“Trigger Event” shall have the meaning specified in Section 13.04(c).

 

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, as it was in force at the date of execution of this Indenture.

 

“Trustee” means The Bank of New York Mellon Trust Company, N.A., and its successors and any corporation resulting from or surviving any consolidation or merger to which it or its successors may be a party and any successor trustee at the time serving as successor trustee hereunder.

 

Section 1.02.  References to Interest.

 

Any reference to interest on, or in respect of, any Note in the Indenture shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of Section 4.03(d), Section 4.03(e) and Section 5.10.  Any express mention of the payment of Additional Interest in any provision hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made.

 

ARTICLE II

 

ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

 

Section 2.01.  Designation and Amount.  The Notes shall be designated as the “0.50% Convertible Senior Notes due 2020.” The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is initially limited to $1,500,000,000, subject to Section 2.11 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 2.06, Section 2.07, Section 9.04 and Section 13.02.

 

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.

 

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 the provisions of this Indenture, or 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.

 

The 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

 

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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 the 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 Indenture.  Payment of principal and accrued and unpaid interest on the 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 Indenture and to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.

 

Section 2.03.  Date and Denomination of Notes; Payments of Interest. The Notes shall be issuable in registered form without coupons in denominations of $2,000 principal amount and integral multiples of $1,000 in excess 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.

 

The Person in whose name any Note (or its Predecessor Note) is registered on the Note Register at the close of business on any regular record date with respect to any Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date.  Interest shall be payable at the office of the Company maintained by the Company for such purposes in the Borough of Manhattan, City of New York, which shall initially be an office or agency of the Trustee.  The Company shall pay interest (i) on any Notes in certificated form by check mailed to the address of the Person entitled thereto as it appears in the Note Register (or upon written application by such Person to the Note Registrar not later than the relevant regular record date, by wire transfer in immediately available funds to such Person’s account within the United States, if such Person is entitled to interest on an aggregate principal in excess of $1,000,000) or (ii) on any Global Note by wire transfer of immediately available funds to the account of the Depositary or its nominee.  The term “regular record date” with respect to any Interest Payment Date shall mean the April 1 or October 1 preceding the applicable April 15 or October 15 Interest Payment Date, respectively.

 

Any interest on any Note which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Noteholder on the relevant regular record date by virtue of his having been such Noteholder, and such Defaulted Interest shall be paid by the Company, at its election in each case, as provided in clause (1) or (2) below:

 

(1)  The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner.  The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment

 

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(which shall be not less than twenty-five (25) days after the receipt by the Trustee of such notice, unless the Trustee shall consent to an earlier date), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Company shall fix a special record date for the payment of such Defaulted Interest which shall be not more than fifteen (15) days and not less than ten (10) days prior to the date of the proposed payment, and not less than ten (10) days after the receipt by the Trustee of the notice of the proposed payment.  The Company shall promptly notify the Trustee in writing of such special record date and the Trustee, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be transmitted to each holder at his address as it appears in the Note Register, not less than ten (10) days prior to such special record date.  Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been so transmitted, such Defaulted Interest shall be paid to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on such special record date and shall no longer be payable pursuant to the following clause (2) of this Section 2.03.

 

(2)  The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, and upon such notice as may be required by such exchange or automated quotation system, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

 

Section 2.04.  Date and Denomination of Notes. The Notes shall be issuable in fully registered form without coupons in denominations of $2,000 principal amount and integral multiples of $1,000 in excess thereof.  Every Note shall be dated the date of its authentication.

 

Section 2.05.  Execution, Authentication and Delivery of Notes. The Notes shall be signed in the name and on behalf of the Company by the manual or facsimile signature of its Chairman or Vice-Chairman of the Board of Directors, Chief Executive Officer, President, any of its Executive or Senior Vice Presidents, Managing Director, or any of its Vice Presidents (whether or not designated by a number or numbers or word or words added before or after the title “Vice President”).

 

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Notes, and the Trustee in accordance with such Company Order shall authenticate and deliver such Notes, without any further action by the Company hereunder.

 

Only such Notes as shall bear thereon a certificate of authentication substantially in the form set forth on the form of Note attached as Exhibit A hereto, manually executed by the Trustee (or an authenticating agent appointed by the Trustee as provided by Section 15.11), shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose.  Such

 

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certificate by the Trustee (or such an authenticating agent) upon any Note executed by the Company shall be conclusive evidence that the Note so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this indenture.

 

In case any officer of the Company who shall have signed any of the Notes shall cease to be such officer before the Notes so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Company, such Notes nevertheless may be authenticated and delivered or disposed of as though the person who signed such Notes had not ceased to be such officer of the Company: and any Note may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Note, shall be the proper officers of the Company, although at the date of the execution of this Indenture any such person was not such an officer.

 

The Trustee shall have the right to decline to authenticate and deliver any Notes under this Section if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or if the Trustee in good faith shall determine that such action would expose the Trustee to personal liability to existing Noteholders.

 

Section 2.06.  Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary.

 

(a)                                 The Company shall cause to be kept at the Corporate Trust Office a register (the register maintained in such office and in any other office or agency of the Company designated pursuant to Section 3.02 being herein sometimes collectively referred to as the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes and of transfers of Notes.  Such register shall be in written form or in any form capable of being converted into written form within a reasonable period of time.  The Trustee is hereby appointed “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided.  The Company may appoint one or more co-registrars in accordance with Section 3.02.

 

Upon surrender for registration of transfer of any Note to the Note Registrar or any co-registrar, and satisfaction of the requirements for such transfer set forth in this Section 2.06, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denominations and of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture.

 

Notes may be exchanged for other Notes of any authorized denominations and of a like aggregate principal amount, upon surrender of the Notes to be exchanged at any such office or agency maintained by the Company pursuant to Section 3.02.  Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes which the Noteholder making the exchange is entitled to receive, bearing registration numbers not contemporaneously outstanding.

 

All Notes presented or surrendered for registration of transfer or for exchange, repurchase or conversion shall (if so required by the Company, the Trustee, the Note Registrar or any co-

 

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registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and duly executed, by the Noteholder thereof or his attorney-in-fact duly authorized in writing.

 

No service charge shall be charged to the Noteholder for any exchange or registration of transfer of Notes, but the Company or the Trustee may require payment of a sum sufficient to cover any tax, assessments or other governmental charges that may be imposed in connection therewith.

 

None of the Company, the Trustee, the Note Registrar or any co-registrar shall be required to exchange or register a transfer of (i) any Notes surrendered for conversion or, if a portion of any Note is surrendered for conversion, such portion thereof surrendered for conversion or (ii) any Notes, or a portion of any Note, surrendered for repurchase (and not withdrawn) except in accordance with Article XIII for conversion and Article XIV for repurchase hereof, respectively.

 

All Notes issued upon any registration of transfer or exchange of Notes in accordance with this Indenture shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.

 

(b)                                 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 (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 (but not the Trustee or the Custodian) in accordance with this Indenture (including the restrictions on transfer set forth herein) and the procedures of the Depositary therefor.

 

(c)                                  Any Global Note may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Indenture as may be required by the Custodian, the Depositary or by the Financial Industry Regulatory Authority, Inc. to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange or automated quotation system upon which the Notes may be listed or traded or designated for issuance or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Notes are subject, including the legends described in Section 2.06(e).

 

Notwithstanding any other provisions of this Indenture, 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.

 

(d)                                 The Depositary shall be a clearing agency registered under the Exchange Act.  The Company initially appoints The Depository Trust Company to act as Depositary with respect to the Global Note.  Initially, the Global Note shall be issued to the Depositary, registered in the

 

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name of Cede & Co., as the nominee of the Depositary, and deposited with the Trustee as custodian for Cede & Co.

 

If at any time, (1) the Depositary for a Global Note notifies the Company that it is unwilling or unable to continue as Depositary for such Note and a successor Depositary for such Global Note is not appointed by the Company within ninety (90) days after the Company receives such notice or (2) an Event of Default has occurred and is continuing and the Note Registrar has received a request from the Depositary for the issuance of Notes in definitive form in exchange for a Global Note, the Company will execute, and the Trustee, upon receipt of an Officers’ Certificate for the authentication and delivery of Notes, will authenticate and deliver Notes in definitive form in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, and upon delivery of the Global Note to the Trustee such Global Note shall be canceled.

 

Definitive Notes issued in exchange for all or a part of the Global Note pursuant to this Section 2.06(d) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee.  Upon execution and authentication, the Trustee shall deliver such definitive Notes to the persons in whose names such definitive Notes are so registered.

 

At such time as all interests in a Global Note have been converted, canceled, repurchased or transferred, such Global Note shall be, upon receipt thereof, canceled by the Trustee in accordance with standing procedures and instructions existing between the Depositary and the Custodian.  At any time prior to such cancellation, if any interest in a Global Note is exchanged for definitive Notes, converted, canceled, repurchased or transferred to a transferee who receives definitive Notes therefor or any definitive Note is exchanged or transferred for part of such Global Note, the principal amount of such Global Note shall, in accordance with the standing procedures and instructions existing between the Depositary and the Custodian, be appropriately reduced or increased, as the case may be, and an endorsement shall be made on such Global Note, by the Trustee or the Custodian, at the direction of the Trustee, to reflect such reduction or increase.

 

(e)                                  Every Note that bears or is required under this Section 2.06(e) to bear the legend set forth in this Section 2.06(e) (together with any Common Stock issued upon conversion of the Notes and required to bear the legend set forth in Section 2.06(f), collectively, the “Restricted Securities”) shall be subject to the restrictions on transfer set forth in this Section 2.06(e) (including the legend set forth below), unless such restrictions on transfer shall be eliminated or otherwise waived by written consent of the Company, and the Noteholder of each such Restricted Security, by such Noteholder’s acceptance thereof, agrees to be bound by all such restrictions on transfer.  As used in this Section 2.06(e) and Section 2.06(f), the term “transfer” encompasses any sale, pledge, transfer or other disposition whatsoever of any Restricted Security.

 

Until the date (the “Resale Restriction Termination Date”) that is the later of (1) the date that is one year after the date of original issuance of the Notes, or such shorter period of time as permitted by Rule 144 under the Securities Act or any successor provision thereto, and (2) such later date, if any, as may be required by applicable law, any certificate evidencing such

 

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Note (and all securities issued in exchange therefor or substitution thereof, other than Common Stock, if any, issued upon conversion thereof which shall bear the legend set forth in Section 2.06(f), if applicable) shall bear a legend in substantially the following form (unless such Notes have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company in writing, with notice thereof to the Trustee):

 

THE SALE OF THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED BELOW), THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE (AND ANY BENEFICIAL INTEREST HEREIN OR THEREIN) MAY NOT BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED, EXCEPT:

 

(A)                         TO THE COMPANY OR ANY SUBSIDIARY THEREOF;

(B)                         PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT;

(C)                         TO A PERSON THAT YOU REASONABLY BELIEVE TO BE A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT; OR

(D)                         UNDER ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (INCLUDING, IF AVAILABLE, THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT).

 

THE “RESALE RESTRICTION TERMINATION DATE” MEANS THE DATE: (1) THAT IS AT LEAST ONE YEAR AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THE NOTES; AND (2) ON WHICH THE COMPANY HAS INSTRUCTED THE TRUSTEE THAT THIS LEGEND WILL NO LONGER APPLY IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE.

 

PRIOR TO ANY TRANSFER PURSUANT TO THE FOREGOING CLAUSE (D), THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE AND MAY RELY UPON TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

No transfer of any Note prior to the Resale Restriction Termination Date will be registered by the Note Registrar unless the applicable box on the Form of Assignment and Transfer has been checked.

 

Any Note (or security issued in exchange or substitution therefor) as to which such restrictions on transfer shall have expired in accordance with their terms may, upon surrender of

 

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such Note for exchange to the Note Registrar in accordance with the provisions of this Section 2.06, be exchanged for a new Note or Notes, of like tenor and aggregate principal amount, which shall not bear the restrictive legend required by this Section 2.06(e) and shall not be assigned a restricted CUSIP number. The Company shall be entitled to instruct the Custodian in writing to so surrender any Global Note as to which such restrictions on transfer shall have expired in accordance with their terms for exchange, and, upon such instruction, the Custodian shall so surrender such Global Note for exchange; and any new Global Note so exchanged therefor shall not bear the restrictive legend specified in this Section 2.06(e) and shall not be assigned a restricted CUSIP number.  The Company shall promptly notify the Trustee upon the occurrence of the Resale Restriction Termination Date and promptly after a registration statement, if any, with respect to the Notes or any Common Stock issued upon conversion of the Notes has been declared effective under the Securities Act.

 

(f)                                   Until the Resale Restriction Termination Date, any stock certificate representing Common Stock issued upon conversion of a Note shall bear a legend in substantially the following form (unless the Note or such Common Stock has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or such Common Stock has been issued upon conversion of Notes that have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company with written notice thereof to the Trustee and any transfer agent for the Common Stock):

 

THE SALE OF THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED BELOW), THIS SECURITY (AND ANY BENEFICIAL INTEREST HEREIN) MAY NOT BE OFFERED, RESOLD, OR OTHERWISE TRANSFERRED, EXCEPT:

 

(A)                         TO THE COMPANY OR ANY SUBSIDIARY THEREOF;

(B)                         PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT;

(C)                         TO A PERSON THAT YOU REASONABLY BELIEVE TO BE A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT; OR

(D)                         UNDER ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (INCLUDING, IF AVAILABLE, THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT).

 

THE “RESALE RESTRICTION TERMINATION DATE” MEANS THE DATE: (1) THAT IS AT LEAST ONE YEAR AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THE COMPANY’S 0.50% CONVERTIBLE SENIOR NOTES DUE 2020 (INCLUDING THE LAST DATE OF ISSUANCE OF ADDITIONAL NOTES PURSUANT TO THE EXERCISE OF THE INITIAL PURCHASERS’ OPTION TO PURCHASE ADDITIONAL NOTES); AND (2) ON

 

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WHICH THE COMPANY HAS INSTRUCTED THE TRANSFER AGENT THAT THIS LEGEND WILL NO LONGER APPLY, IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE FOR THE NOTES.

 

PRIOR TO ANY TRANSFER PURSUANT TO THE FOREGOING CLAUSE (C), THE COMPANY AND THE COMPANY’S TRANSFER AGENT RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE AND MAY RELY UPON TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

Any such Common Stock as to which such restrictions on transfer shall have expired in accordance with their terms may, upon surrender of the certificates representing such shares of Common Stock for exchange in accordance with the procedures of the transfer agent for the Common Stock, be exchanged for a new certificate or certificates for a like aggregate number of shares of Common Stock, which shall not bear the restrictive legend required by this Section 2.06(e).

 

(g)                                  Any Note or Common Stock issued upon the conversion of a Note that is purchased or owned by any Affiliate of the Company may not be resold by such Affiliate unless registered under the Securities Act or resold pursuant to an exemption from the registration requirements of the Securities Act in a transaction that results in such Note or Common Stock, as the case may be, no longer being “restricted securities” (as defined under Rule 144 under the Securities Act).  The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among members of, or participants in, the Depositary or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

 

Section 2.07.  Mutilated, Destroyed, Lost or Stolen Notes. In case any Note shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon its written request the Trustee or an authenticating agent appointed by the Trustee shall authenticate and deliver, a new Note, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Note, or in lieu of and in substitution for the Note so destroyed, lost or stolen.  In every case the applicant for a substituted Note shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless from any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company, to the Trustee and, if applicable, to such authenticating agent evidence to their satisfaction of the destruction, loss or theft of such Note and of the ownership thereof.

 

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The Trustee or such authenticating agent may authenticate any such substituted Note and deliver the same upon the receipt of such security or indemnity as the Trustee, the Company and, if applicable, such authenticating agent may require.  Upon the issuance of any substituted Note, the Company or the Trustee may require the payment by the holder of a sum sufficient to cover any tax, assessment or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith.  In case any Note which has matured or is about to mature or has been tendered for repurchase upon a Designated Event or is about to be converted into Common Stock shall become mutilated or be destroyed, lost or stolen, the Company may, in its sole discretion, instead of issuing a substitute Note, pay or authorize the payment of or convert or authorize the conversion of the same (without surrender thereof except in the case of a mutilated Note), as the case may be, if the applicant for such payment or conversion shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless for any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, evidence satisfactory to the Company, the Trustee and, if applicable, any Paying Agent or Conversion Agent evidence of their satisfaction of the destruction, loss or theft of such Note and of the ownership thereof.

 

Every substitute Note issued pursuant to the provisions of this Section 2.07 by virtue of the fact that any Note is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note shall be found at any time, and shall be entitled to all the benefits of (but shall be subject to all the limitations set forth in) this Indenture equally and proportionately with any and all other Notes duly issued hereunder.  To the extent permitted by law, all Notes shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment or conversion or repurchase of mutilated, destroyed, lost or stolen Notes and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment or conversion of negotiable instruments or other securities without their surrender.

 

Section 2.08.   Temporary Notes. Pending the preparation of Notes in certificated form, the Company may execute and the Trustee or an authenticating agent appointed by the Trustee shall, upon written request of the Company, authenticate and deliver temporary Notes (printed or lithographed).  Temporary Notes shall be issuable in any authorized denomination, and substantially in the form of the Notes in certificated form but with such omissions, insertions and variations as may be appropriate for temporary Notes, all as may be determined by the Company.  Every such temporary Note shall be executed by the Company and authenticated by the Trustee or such authenticating agent upon the same conditions and in substantially the same manner, and with the same effect, as the Notes in certificated form.  Without unreasonable delay the Company will execute and deliver to the Trustee or such authenticating agent Notes in certificated form (other than in the case of Notes in global form) and thereupon any or all temporary Notes (other than any Global Note) may be surrendered in exchange therefor, at each office or agency maintained by the Company pursuant to Section 3.02 and the Trustee or such authenticating agent shall authenticate and deliver in exchange for such temporary Notes an equal aggregate principal amount of Notes in certificated form.  Such exchange shall be made by the Company at its own expense and without any charge therefor.  Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits and subject to the same

 

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limitations under this Indenture as Notes in certificated form authenticated and delivered hereunder.

 

Section 2.09.   Cancellation of Notes Paid, Etc. All Notes surrendered for the purpose of payment, repurchase, conversion, exchange or registration of transfer, shall, if surrendered to the Company or any Paying Agent or any Note Registrar or any Conversion Agent, be surrendered to the Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by it, and no Notes shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture.  The Trustee shall dispose of canceled Notes in accordance with its customary procedures and, after such cancellation, shall deliver a certificate confirming such disposal to the Company, at the Company’s written request.  If the Company shall acquire any of the Notes, such acquisition shall not operate as satisfaction of the Indebtedness represented by such Notes unless and until the same are delivered to the Trustee for cancellation.

 

Section 2.10.   CUSIP Numbers. The Company in issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in Company Notices as a convenience to holders of the Notes; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or Company Notice and that reliance may be placed only on the other identification numbers printed on the Notes.  The Company will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

 

Section 2.11.   Additional Notes, Repurchases. The Company may, from time to time, without prior notice to or the consent of the Noteholders, reopen the Notes and issue additional Notes hereunder with the same terms and with the same CUSIP number as the Notes initially issued hereunder in an unlimited aggregate principal amount, which will form the same series with the Notes initially issued hereunder, so long as such additional Notes are fungible with the Notes initially issued hereunder for U.S. federal income tax purposes.  The Company may also from time to time repurchase the Notes in tender offers, open market purchases or negotiated transactions without prior notice to Noteholders.

 

ARTICLE III

 

PARTICULAR COVENANTS OF THE COMPANY

 

Section 3.01.   Payment of Principal and Interest. The Company covenants and agrees that it will cause to be paid the principal of, and accrued and unpaid interest on, each of the Notes and if applicable, payment of the Conversion Obligation, at the places, at the respective times and in the manner provided herein and in the Notes.  Each installment of accrued and unpaid interest on the Notes due on any Interest Payment Date may be paid by mailing checks for the amount payable to or upon the written order of the Noteholders entitled thereto as they shall appear on the Note Register, provided that, with respect to any Noteholder with an aggregate principal amount in excess of $1,000,000, at the application of such holder in writing to the Note Registrar not later than the relevant regular record date, accrued and unpaid interest on such holder’s Notes shall be paid by wire transfer in immediately available funds to such holder’s account in the United States supplied by such holder from time to time to the Trustee

 

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and Paying Agent (if different from Trustee); provided, further, that payment of accrued and unpaid interest made to the Depositary shall be paid by wire transfer in immediately available funds in accordance with such wire transfer instructions and other procedures provided by the Depositary from time to time.

 

Section 3.02.   Maintenance of Office or Agency. The Company will maintain in the Borough of Manhattan, The City of New York, an office or agency where the Notes may be surrendered for registration of transfer or exchange or for presentation for payment, redemptions or repurchase (“Paying Agent”) or for conversion (“Conversion Agent”) and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served.  The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency not designated or appointed by the Trustee.  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office or the office or agency of the Trustee in the Borough of Manhattan, The City of New York.

 

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

 

The Company hereby initially designates the Trustee as the Paying Agent, Note Registrar, Custodian and Conversion Agent and the Corporate Trust Office and the office or agency of the Trustee in the Borough of Manhattan shall be considered as one such office or agency of the Company for each of the aforesaid purposes.

 

So long as the Trustee is the Note Registrar, the Trustee agrees to mail, or cause to be mailed, the notices set forth in Section 6.10(a) and the third paragraph of Section 6.11.

 

Section 3.03.   Appointments to Fill Vacancies in Trustee’s Office. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so that there shall at all times be a Trustee hereunder.

 

Section 3.04.   Provisions as to Paying Agent.

 

(a)                                 If the Company shall appoint a Paying Agent other than the Trustee or if the Trustee shall appoint such a Paying Agent, the Company will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 3.04.

 

(i)                                     that it will hold all sums held by it as such agent for the payment of the principal of, and accrued and unpaid interest on, the Notes (whether such sums have been

 

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paid to it by the Company or by any other obligor on the Notes) in trust for the benefit of the holders of the Notes;

 

(ii)                                  that it will give the Trustee notice of any failure by the Company (or by any other obligor on the Notes) to make any payment of the principal of, and accrued and unpaid interest on, the Notes when the same shall be due and payable; and

 

(iii)                               that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.

 

The Company shall, on or before each due date of the principal of, or accrued and unpaid interest on the Notes, deposit with the Paying Agent a sum sufficient to pay such principal or accrued and unpaid interest and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee in writing of any failure to take such action, provided that if such deposit is made on the due date, such deposit must be received by the Paying Agent by 11:00 a.m., New York City time, on such date.

 

(b)                                 If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal of and accrued and unpaid interest on the Notes, set aside, segregate and hold in trust for the benefit of the holders of the Notes a sum sufficient to pay such principal and accrued and unpaid interest so becoming due and will notify the Trustee in writing of any failure to take such action and of any failure by the Company (or any other obligor under the Notes) to make any payment of the principal of and accrued and unpaid interest on the Notes, when the same shall become due and payable.

 

(c)                                  Anything in this Section 3.04 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by the Company or any Paying Agent hereunder as required by this Section 3.04, such sums to be held by the Trustee upon the trusts herein contained and upon such payment by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from all further liability with respect to such sums.

 

(d)                                 Anything in this Section 3.04 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 3.04 is subject to Section 11.03 and Section 11.04.

 

Section 3.05.   Existence. Subject to Article X, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

 

Section 3.06.   Stay, Extension and Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of, or interest on, the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay

 

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or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

Section 3.07.   Compliance Certificate; Statements as to Defaults.  The Company shall deliver to the Trustee within 120 calendar days after the end of each fiscal year of the Company (beginning with the fiscal year ending on December 29, 2013) an Officers’ Certificate stating whether or not the signer thereof has knowledge of any failure by the Company to comply with all conditions and covenants then required to be performed under this Indenture and, if so, specifying each such failure and the nature thereof.

 

In addition, the Company shall deliver to the Trustee, as soon as possible and in any event within 30 days after the Company becomes aware of the occurrence of any Event of Default or Default, an Officers’ Certificate setting forth the details of such Event of Default or Default, its status and the action which the Company proposes to take with respect thereto.

 

Section 3.08.   Further Instruments and Acts. The Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.

 

ARTICLE IV

 

LISTS OF NOTEHOLDERS AND REPORTS BY THE COMPANY

 

Section 4.01.   Lists of Noteholders. The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee, semi-annually, not more than fifteen (15) days after each April 1 and October 1 in each year beginning with April 1, 2014, and at such other times as the Trustee may request in writing, within thirty (30) days after receipt by the Company of any such request (or such lesser time as the Trustee may reasonably request in order to enable it to timely provide any notice to be provided by it hereunder), a list in such form as the Trustee may reasonably require of the names and addresses of the Noteholders as of a date not more than fifteen (15) days (or such other date as the Trustee may reasonably request in order to so provide any such notices) prior to the time such information is furnished, except that no such list need be furnished so long as the Trustee is acting as Note Registrar.

 

Section 4.02.   Preservation of Lists. The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the Noteholders contained in the most recent list furnished to it as provided in Section 4.01 or maintained by the Trustee in its capacity as Note Registrar, if so acting.  The Trustee may destroy any list furnished to it as provided in Section 4.01 upon receipt of a new list so furnished.

 

Section 4.03.   Reports by the Company.

 

(a)                                 For as long as any Notes are outstanding hereunder, at any time the Company is not subject to Sections 13 or 15(d) of the Exchange Act, the Company shall, so long as any of the Notes or any shares of Common Stock issued upon conversion thereof shall, at such time, constitute “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide to the Trustee and shall, upon written request, provide to any Holder,

 

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beneficial owner or prospective purchaser of such Notes or any shares of Common Stock issued upon conversion of such Notes, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such Notes or shares of Common Stock pursuant to Rule 144A under the Securities Act.  For as long as any Notes are outstanding hereunder, the Company shall take such further action as any Noteholder or beneficial owner of such Notes or such Common Stock may reasonably request to the extent from time to time required to enable such Noteholder or beneficial owner to sell such Notes or shares of Common Stock in accordance with Rule 144A under the Securities Act, as such rule may be amended from time to time.

 

(b)                                 The Company shall file with the Trustee within 15 days after the same are required to be filed with the Commission, copies of any documents or reports that the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act).  Any such document or report that the Company files with the Commission via the Commission’s EDGAR system shall be deemed to be filed with the Trustee for purposes of this Section 4.03(b) as of the time such documents are filed via the EDGAR system; provided that the Trustee shall have no responsibility to determine whether such filing has occurred.

 

(c)                                  Delivery of the reports and documents described in Section 4.03(b) 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).

 

(d)                                 If, at any time during the six-month period beginning on, and including, the date that is six months after the last date of original issuance of the Notes, the Company fails to timely file any document or report that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (other than reports on Form 8-K), the Company shall pay Additional Interest on the Notes.  Such Additional Interest shall accrue on the Notes at a rate equal to 0.50% per annum of the principal amount of the Notes outstanding for each day during such period, for which the Company’s failure to file has occurred and is continuing.  As used in this Section 4.03(d), documents or reports that the Company is required to “file” with the Commission pursuant to Section 13 or 15(d) of the Exchange Act does not include documents or reports that the Company furnishes to the Commission pursuant to Section 13 or 15(d) of the Exchange Act.

 

(e)                                  If, and for so long as, the restrictive legend on the Notes specified in Section 2.06(e) has not been removed, the Notes are assigned a restricted CUSIP or the Notes are not otherwise freely tradable by Holders other than the Company’s Affiliates (without restrictions pursuant to U.S. securities law or the terms of this Indenture or the Notes) as of the 365th day after the last date of original issuance of the Notes, the Company shall pay Additional Interest on the Notes at a rate equal to 0.50% per annum of the principal amount of Notes outstanding until the restrictive legend on the Notes shall have been so removed, the Notes are assigned an unrestricted CUSIP or the Notes are otherwise freely tradable by such Holders.

 

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(f)                                   Additional Interest will be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on the Notes.

 

(g)                                  If Additional Interest is accruing and payable under Section 4.03(d) or Section 4.03(e) and the Company has elected pursuant to Section 5.10 to have the accrual of Additional Interest be the sole remedy for any such Event of Default, no Additional Interest shall be payable pursuant to Section 5.10 for so long as Additional Interest is accruing and payable under Section 4.03(d) or Section 4.03(e).

 

(h)                                 If Additional Interest is payable by the Company pursuant to Section 4.03(d) or Section 4.03(e), the Company shall deliver to the Trustee an Officer’s Certificate to that effect stating (i) the amount of such Additional Interest that is payable and (ii) the date on which such Additional Interest is payable.  Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Additional Interest is payable.  If the Company has paid Additional Interest directly to the Persons entitled to it, the Company shall deliver to the Trustee an Officer’s Certificate setting forth the particulars of such payment.

 

ARTICLE V

 

DEFAULTS AND REMEDIES

 

Section 5.01.   Events of Default. The following events shall be Events of Default with respect to the Notes:

 

(a)                                 default in any payment of interest, on any Note when due and payable and the default continues for a period of 30 days;

 

(b)                                 default in the payment of principal of any Note when due and payable on the Maturity Date, upon required repurchase, upon declaration or otherwise;

 

(c)                                  failure by the Company to comply with its obligation to convert the Notes in accordance with the terms hereof upon exercise of a holder’s conversion right and the default continues for a period of three Business Days;

 

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

 

(e)                                  failure by the Company to issue a Designated Event Company Notice in accordance with Section 14.01(b) when due;

 

(f)                                   failure by the Company for 60 days to comply with any of its other agreements (other than a covenant or warranty or default in whose performance or whose breach is elsewhere in this Section specifically provided for) contained in the Notes or the Indenture after written notice of such default from the Trustee or the holders of at least 25% in principal amount of the Notes then outstanding has been received by the Company;

 

(g)                                  default by the Company or any Subsidiary of the Company in the payment of the principal or interest on any mortgage, agreement or other instrument under which there may be

 

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outstanding, or by which there may be secured or evidenced, any debt for money borrowed in excess of $75 million in the aggregate of the Company and/or any such Subsidiary, whether such debt now exists or shall hereafter be created, which default results in such debt becoming or being declared due and payable, and such acceleration shall not have been rescinded or annulled within 30 days after written notice of such acceleration has been received by the Company or such Subsidiary;

 

(h)                                 the Company or any of its Significant Subsidiaries shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiaries or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or any of its Significant Subsidiaries or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or

 

(i)                                     an involuntary case or other proceeding shall be commenced against the Company or any of its Significant Subsidiaries seeking liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or any of its Significant Subsidiaries or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of ninety (90) consecutive days.

 

In case one or more Events of Default shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), then, and in each and every such case (other than an Event of Default specified in Section 5.01(h) or Section 5.01(i)), unless the principal of all of the Notes shall have already become due and payable, either the Trustee or the holders of at least 25% in aggregate principal amount of the Notes then outstanding determined in accordance with Section 7.04, by notice in writing to the Company (and to the Trustee if given by Noteholders), may declare 100% of the principal of, and accrued and unpaid interest on, all the Notes to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Notes contained to the contrary notwithstanding.  If an Event of Default specified in Section 5.01(h) or Section 5.01(i) occurs and is continuing, the principal of all the Notes and accrued and unpaid interest shall be immediately due and payable.  This provision, however, is subject to the conditions that if, at any time after the principal of the Notes shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay installments of accrued and unpaid interest upon all Notes and the principal of any and all Notes that shall have become due otherwise than by acceleration (with interest on overdue installments of accrued and unpaid interest (to the extent that payment of such interest is enforceable under applicable law) and on such principal at the rate borne by the Notes during the period of such Default) and amounts due

 

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to the Trustee pursuant to Section 6.06, and if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) any and all Events of Defaults under this Indenture, other than the nonpayment of principal of and accrued and unpaid interest on Notes that shall have become due solely by such acceleration, shall have been cured or waived pursuant to Section 5.07, then and in every such case the holders of a majority in aggregate principal amount of the Notes then outstanding, by written notice to the Company and to the Trustee, may waive all Defaults or Events of Default with respect to the Notes except with respect to the payment of principal or interest or with respect to the failure to deliver the consideration due upon conversion and rescind and annul such declaration and its consequences and 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; but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or Event of Default, or shall impair any right consequent thereon.  The Company shall notify the Responsible Officer of the Trustee in writing, promptly upon becoming aware thereof, of any Event of Default by delivering to the Trustee a statement specifying such Event of Default and any action the Company has taken, is taking or proposes to take with respect thereto.

 

In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of such waiver or rescission and annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company, the Noteholders, and the Trustee shall, subject to any determination in such proceeding, be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Company, the Noteholders, and the Trustee shall continue as though no such proceeding had been instituted.

 

Section 5.02.   Payments of Notes on Default; Suit Therefor. In the event that the Trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding hereunder have declared the principal of and accrued and unpaid interest on, the Notes, to be due and payable immediately in accordance with Section 5.01, and the Company shall have failed forthwith to pay such amounts, the Trustee, in its own name and as trustee of an express trust, after being furnished suitable indemnity pursuant to Section 6.01, shall be entitled and empowered to institute any actions or proceedings at law or in equity for the collection of the sums so due and unpaid (including such further amounts as shall be sufficient to cover the reasonable costs and expenses of collection, including reasonable compensation to the Trustee, its agents, attorneys and counsel, and any expenses or liabilities incurred by the Trustee hereunder other than those expenses or liabilities determined by a court of competent jurisdiction to have been caused by its own negligence or willful misconduct), and may prosecute any such action or proceeding to judgment or final degree, and may enforce any such judgment or final decree against the Company or any other obligor on the Notes and collect in the manner provided by law out of the property of the Company or any other obligor on the Notes wherever situated the monies adjudged or decreed to be payable.

 

In case there shall be pending proceedings for the bankruptcy or for the reorganization of the Company or any other obligor on the Notes under title 11 of the United States Code, or any other applicable law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Company or such other obligor, the property of the Company or such other obligor, or in the

 

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case of any other judicial proceedings relative to the Company or such other obligor upon the Notes, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 5.02, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal and accrued and unpaid interest in respect of the Notes, and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents and to take such other actions as it may deem necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Noteholders allowed in such judicial proceedings relative to the Company or any other obligor on the Notes, its or their creditors, or its or their property, and to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same after the deduction of any amounts due the Trustee under Section 6.06; and any receiver, assignee or trustee in bankruptcy or reorganization, liquidator, custodian or similar official is hereby authorized by each of the Noteholders to make such payments to the Trustee, as administrative expenses, and, in the event that the Trustee shall consent to the making of such payments directly to the Noteholders, to pay to the Trustee any amount due it for reasonable compensation, expenses, advances and disbursements, including agents and counsel fees, and including any other amounts due to the Trustee under Section 6.06 hereof, incurred by it up to the date of such distribution.  To the extent that such payment of reasonable compensation, expenses, advances and disbursements out of the estate in any such proceedings shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, monies, securities and other property which the holders of the Notes may be entitled to receive in such proceedings, whether in liquidation or under any plan of reorganization or arrangement or otherwise.

 

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Noteholder or the rights of any Noteholder thereof, or to authorize the Trustee to vote in respect of the claim of any Noteholder in any such proceeding.

 

All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Trustee without the possession of any of the Notes, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the holders of the Notes.

 

In any proceedings brought by the Trustee (and in any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party), the Trustee shall be held to represent all the holders of the Notes, and it shall not be necessary to make any holders of the Notes parties to any such proceedings.

 

Section 5.03.   Application of Monies Collected by Trustee. Any monies collected by the Trustee pursuant to this Article V with respect to the Notes shall be applied in the order

 

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following, at the date or dates fixed by the Trustee for the distribution of such monies, upon presentation of the several Notes, and stamping thereon the payment, if only partially paid, and upon surrender thereof, if fully paid:

 

First, to the payment of all amounts due the Trustee under Section 6.06;

 

Second, in case the principal of the outstanding Notes shall not have become due and be unpaid, to the payment of interest on the Notes in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the rate borne by the Notes, such payments to be made ratably to the Persons entitled thereto;

 

Third, in case the principal of the outstanding Notes shall have become due, by declaration or otherwise, and be unpaid to the payment of the whole amount (including, if applicable, payments in respect of the Conversion Obligation and Additional Shares) then owing and unpaid upon the Notes for principal and interest, with interest on the overdue principal (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest at the rate borne by the Notes, and in case such monies shall be insufficient to pay in full the whole amounts so due and unpaid upon the Notes, then to the payment of such principal and interest without preference or priority of principal over interest, or of interest over principal or of any installment of interest over any other installment of interest, or of any Note over any other Note, ratably to the aggregate of such principal and accrued and unpaid interest; and

 

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

 

Section 5.04.   Proceedings by Noteholders. No holder of any Note shall have any right by virtue of or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture, or for the appointment of a receiver, trustee, liquidator, custodian or other similar official, or for any other remedy hereunder, unless such holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof, as hereinbefore provided, and unless also the holders of not less than 25% in aggregate principal amount of the Notes then outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such security or indemnity satisfactory to it against any loss, liability or expense to be incurred therein or thereby, and the Trustee for sixty (60) days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding and no direction that, in the opinion of the Trustee, is inconsistent with such written request shall have been given to the Trustee by the holders of a majority in principal amount of the Notes outstanding pursuant to Section 5.07; it being understood and intended, and being expressly covenanted by the taker and holder of every Note with every other taker and holder and the Trustee, that no one or more Noteholders shall have any right in any manner whatever by virtue of or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other Noteholder, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Noteholders (except as otherwise provided herein).  For the protection and

 

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enforcement of this Section 5.04, each and every Noteholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

 

Notwithstanding any other provision of this Indenture and any provision of any Note, the right of any Noteholder to receive payment of the principal of, accrued and unpaid interest on and the consideration due upon conversion of such Note, on or after the respective due dates expressed in such Note, or to institute suit for the enforcement of any such payment on or after such respective dates against the Company shall not be impaired or affected without the written consent of such Noteholder.

 

Anything in this Indenture or the Notes to the contrary notwithstanding, the holder of any Note, without the consent of either the Trustee or the holder of any other Note, in his own behalf and for his own benefit, may enforce, and may institute and maintain any proceeding suitable to enforce, his rights of conversion as provided herein.

 

Section 5.05.   Proceedings by Trustee. In case of an Event of Default the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as it may deem necessary to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

 

Section 5.06.   Remedies Cumulative and Continuing. Except as provided in the last paragraph of Section 2.07, all powers and remedies given by this Article V to the Trustee or to the Noteholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the holders of the Notes, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any holder of any of the Notes to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power, or shall be construed to be a waiver of any such default or any acquiescence therein; and, subject to the provisions of Section 5.04, every power and remedy given by this Article V or by law to the Trustee or to the Noteholders may be exercised from time to time, and as often as shall be deemed expedient by the Trustee or by the Noteholders.

 

Section 5.07.   Direction of Proceedings and Waiver of Defaults by Majority of Noteholders. The holders of a majority in aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 7.04 shall have the right to direct the time, method, and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to Notes; provided, however, that (a) such direction shall not be in conflict with any rule of law or with this Indenture, and (b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction.  The Trustee may refuse to follow any direction that it determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability.  The holders of a majority in aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 7.04 may, on behalf of the holders of all of

 

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the Notes waive any past default or Event of Default hereunder and its consequences except (i) a default in the payment of and accrued and unpaid interest on, or the principal of, the Notes when due which has not been cured pursuant to the provisions of Section 5.01, (ii) a failure by the Company to deliver cash and, if applicable, shares of Common Stock (and cash in lieu of fractional shares) upon conversion of the Notes, or (iii) a default in respect of a covenant or provisions hereof which under Article IX cannot be modified or amended without the consent of each holder of an outstanding Note affected thereby.  Upon any such waiver the Company, the Trustee and the holders of the Notes shall be restored to their former positions and rights hereunder, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.  Whenever any default or Event of Default hereunder shall have been waived as permitted by this Section 5.07, said default or Event of Default shall for all purposes of the Notes and this Indenture be deemed to have been cured and to be not continuing; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.

 

Section 5.08.    Notice of Defaults. The Trustee shall, within ninety (90) days after the occurrence and continuance of a Default of which a Responsible Officer has actual knowledge, mail to all Noteholders as the names and addresses of such holders appear upon the Note Register, notice of all Defaults known to a Responsible Officer, unless such Defaults shall have been cured or waived before the giving of such notice; and provided that, except in the case of a Default in the payment of the principal of and accrued and unpaid interest on any of the Notes, then in any such event the Trustee shall be protected in withholding such notice if and so long as a committee of trust officers of the Trustee in good faith determine that the withholding of such notice is in the interests of the Noteholders.

 

Section 5.09.   Undertaking to Pay Costs. All parties to this Indenture agree, and each holder of any Note by his acceptance thereof shall be deemed to have agreed, that any court may, in its discretion, require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section 5.09 (to the extent permitted by law) shall not apply to any suit instituted by the Trustee, to any suit instituted by any Noteholder, or group of Noteholders, holding in the aggregate more than 10% in principal amount of the Notes at the time outstanding determined in accordance with Section 7.04, or to any suit instituted by any Noteholder for the enforcement of the payment of the principal of and accrued and unpaid interest on any Note on or after the due date expressed in such Note or to any suit for the enforcement of the right to convert any Note in accordance with the provisions of Article XIII.

 

Section 5.10.   Additional Interest.  Notwithstanding any provisions of the Indenture to the contrary, to the extent the Company elects, the sole remedy for an Event of Default relating to its failure to comply with its obligations under Section 4.03 shall for the 364 days after the occurrence of such an Event of Default consist exclusively of the right to receive additional interest on the Notes at a rate equal to 0.25% per annum of the principal amount of the Notes Outstanding for each day during the 180-day period beginning on, and including, the occurrence

 

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of such an Event of Default during which such Event of Default is continuing, which such Additional Interest shall be increased by an additional 0.25% per annum, on the 181st day after such Event of Default (if such Event of Default is not cured or waived prior to such 181st day), provided that the rate at which such Additional Interest accrues may in no event exceed 0.50% per annum.  If Additional Interest is accruing and payable under Section 4.03(d) or Section 4.03(e) and the Company has elected pursuant to this Section 5.10 to have the accrual of Additional Interest be the sole remedy for any such Event of Default, no Additional Interest shall be payable pursuant to this Section 5.10 for so long as Additional Interest is accruing and payable under Section 4.03(d) or Section 4.03(e).  If the Company so elects, such Additional Interest shall be payable in the same manner and on the same dates as the stated interest payable on the Notes.  On the 365th day after such Event of Default occurs (if such Event of Default is not cured or waived prior to such 365th day), such Additional Interest shall cease to accrue and the Notes shall be subject to acceleration as provided in Section 5.01.  This Section 5.10 shall not affect the rights of Holders of Notes in the event of the occurrence of any other Event of Default.  In the event the Company does not elect to pay Additional Interest following an Event of Default in accordance with this Section 5.10, the Notes shall be subject to acceleration as provided in Section 5.01.

 

In order to elect to pay Additional Interest as the sole remedy during the first 364 days after the occurrence of an Event of Default described in the immediately preceding paragraph, the Company must give notice to Holders of the Notes, the Trustee and the Paying Agent of such election prior to the beginning of such 364-day period.  Upon the failure to timely give all Holders, the Trustee and the Paying Agent such notice, the Notes shall be immediately subject to acceleration as provided in Section 5.01.

 

ARTICLE VI

 

CONCERNING THE TRUSTEE

 

Section 6.01.   Duties and Responsibilities of Trustee. The Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture.  In case an Event of Default has occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs; provided that if an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any of the holders unless such holders have offered to the Trustee indemnity or security satisfactory to it against loss, liability or expense.

 

No provision of this Indenture shall be construed to relieve the Trustee from liability for its own grossly negligent action, its own grossly negligent failure to act or its own willful misconduct, except that

 

(a)                                 prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default which may have occurred:

 

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(i)                                     the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(ii)                                  in the absence of bad faith and willful misconduct on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein);

 

(b)                                 the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be established by a court of competent jurisdiction that the Trustee was grossly negligent in ascertaining the pertinent facts;

 

(c)                                  the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith and either (i) believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture or (ii) in accordance with the direction of the holders of not less than a majority in principal amount of the Notes at the time outstanding determined as provided in Section 7.04 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;

 

(d)                                 whether or not therein provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this Section;

 

(e)                                  the Trustee shall not be liable in respect of any payment (as to the correctness of amount, entitlement to receive or any other matters relating to payment) or notice effected by the Company or any Paying Agent or any records maintained by any co-registrar with respect to the Notes;

 

(f)                                   if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred;

 

(g)                                  in the absence of written investment direction from the Company, all cash received by the Trustee shall be placed in a non-interest bearing trust account.  In no event shall the Trustee be liable for the selection of investments or for investment losses incurred thereon or for losses incurred as a result of the liquidation of any such investments prior to its stated maturity or the failure of the party directing such investments prior to its stated maturity or the failure of the party directing such investment to provide timely written investment direction, and

 

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the Trustee shall have no obligation to invest or reinvest any amounts held hereunder in the absence of such written investment direction from the Company; and

 

(h)                                 in the event that the Trustee is also acting as Custodian, Note Registrar, Paying Agent, Conversion Agent, Bid Solicitation Agent or transfer agent hereunder, the rights and protections afforded to the Trustee under this Indenture shall also be afforded to it in its capacity as such.

 

None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers.

 

Section 6.02.   Reliance on Documents, Opinions, Etc. Except as otherwise provided in Section 6.01:

 

(a)                                 the Trustee may conclusively rely and shall be fully protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, note, coupon or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;

 

(b)                                 any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers’ Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;

 

(c)                                  the Trustee may consult with counsel and require an Opinion of Counsel and any advice of such counsel or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

 

(d)                                 the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Noteholders pursuant to the provisions of this Indenture, unless such Noteholders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which may be incurred therein or thereby;

 

(e)                                  the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require indemnity satisfactory to the Trustee from the Noteholders against such expenses or liability as a condition to so proceeding; the expenses

 

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of every such examination shall be paid by the Company or, if paid by the Trustee or any predecessor Trustee, shall be repaid by the Company upon demand;

 

(f)                                   the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, custodians, nominees or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent, custodian, nominee or attorney appointed by it with due care hereunder;

 

(g)                                  the permissive rights of the Trustee enumerated herein shall not be construed as duties; and

 

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

 

In no event shall the Trustee be liable for any 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 other than through the Trustee’s willful misconduct or gross negligence.  The Trustee shall not be charged with knowledge of any default or Event of Default with respect to the Notes, unless either (1) a Responsible Officer shall have actual knowledge of such default or Event of Default or (2) written notice of such default or Event of Default shall have been given to the Trustee by the Company or by any holder of the Notes at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.  The permissive rights of the Trustee enumerated herein shall not be construed as duties.

 

Section 6.03.   No Responsibility for Recitals, Etc. The recitals contained herein and in the Notes (except in the Trustee’s certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same.  The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Notes.  The Trustee shall not be accountable for the use or application by the Company of any Notes or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the provisions of this Indenture.  The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with this Indenture or at the direction of the Company.  Except for information provided by the Trustee concerning the Trustee, the Trustee shall have no responsibility for any information in any offering circular, prospectus or other disclosure material distributed with respect to the Notes.

 

Section 6.04.   Trustee, Paying Agents, Conversion Agents or Registrar May Own Notes. The Trustee, any Paying Agent, any Conversion Agent or Note Registrar, in its individual or any other capacity, may become the owner or pledgee of Notes with the same rights it would have if it were not Trustee, Paying Agent, Conversion Agent or Note Registrar.

 

Section 6.05.   Monies to Be Held in Trust.  Subject to the provisions of Section 11.04, all monies received by the Trustee shall, until used or applied as herein provided, be held in trust

 

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for the purposes for which they were received.  Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law.  The Trustee shall be under no liability for interest on any money received by it hereunder except as may be agreed in writing from time to time between the Company and the Trustee.

 

Section 6.06.   Compensation and Expenses of Trustee.  The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as mutually agreed to in writing between the Trustee and the Company, and the Company will pay or reimburse the Trustee upon its request for all expenses, disbursements and advances reasonably incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel and of all persons not regularly in its employ) except any such expense, disbursement or advance as shall be determined to have been caused by its own gross negligence or willful misconduct.  The Company also covenants to indemnify the Trustee in any capacity under this Indenture and any other document or transaction entered into in connection herewith and its agents and any authenticating agent for, and to hold them harmless against, any loss, liability or expense incurred without gross negligence or willful misconduct on the part of the Trustee, its officers, directors, agents or employees, or such agent or authenticating agent, as the case may be, and arising out of or in connection with the acceptance or administration of this trust or in any other capacity hereunder, including the costs and expenses of defending themselves against any claim of liability in the premises.  The obligations of the Company under this Section 6.06 to compensate or indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall be secured by a lien prior to that of the Notes upon all property and funds held or collected by the Trustee as such, except, subject to the effect of Section 5.03, funds held in trust herewith for the benefit of the holders of particular Notes prior to the date of the accrual of such unpaid compensation or identifiable claim.  The Trustee’s right to receive payment of any amounts due under this Section 6.06 shall not be subordinate to any other liability or Indebtedness of the Company.  The obligation of the Company under this Section 6.06 shall survive the satisfaction and discharge of this Indenture and the earlier resignation or removal or the Trustee.  The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.  The indemnification provided in this Section 6.06 shall extend to the officers, directors, agents and employees of the Trustee.

 

When the Trustee and its agents and any authenticating agent incur expenses or render services after an Event of Default specified in Section 5.01(h) or Section 5.01(i) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy, insolvency or similar laws.

 

Section 6.07.   Officers’ Certificate as Evidence. Except as otherwise provided in Section 8.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of gross negligence, willful misconduct, recklessness and bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an

 

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Officers’ Certificate delivered to the Trustee, and such Officers’ Certificate, in the absence of gross negligence, willful misconduct, recklessness and bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof.

 

Section 6.08.   Conflicting Interests of Trustee. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.

 

Section 6.09.   Eligibility of Trustee. There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000.  If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

 

Section 6.10.   Resignation or Removal of Trustee.

 

(a)                                 The Trustee may at any time resign by giving written notice of such resignation to the Company and by mailing notice thereof to the Noteholders at their addresses as they shall appear on the Note Register.  Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee.  If no successor trustee shall have been so appointed and have accepted appointment sixty (60) days after the mailing of such notice of resignation to the Noteholders, the resigning Trustee may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor trustee, or any Noteholder who has been a bona fide holder of a Note or Notes for at least six months may, subject to the provisions of Section 5.09, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee.  Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

 

(b)                                 In case at any time any of the following shall occur:

 

(i)                                     the Trustee shall fail to comply with Section 6.08 within a reasonable time after written request therefor by the Company or by any Noteholder who has been a bona fide holder of a Note or Notes for at least six (6) months, or

 

(ii)                                  the Trustee shall cease to be eligible in accordance with the provisions of Section 6.09 and shall fail to resign after written request therefor by the Company or by any such Noteholder, or

 

(iii)                               the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or

 

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any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

 

then, in any such case, the Company may by a Board Resolution remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 5.09, any Noteholder who has been a bona fide holder of a Note or Notes for at least six (6) months, on behalf of himself and all others similarly situated, or the Trustee, at the expense of the Company, may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee.  Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

 

(c)                                  The holders of a majority in aggregate principal amount of the Notes at the time outstanding, as determined in accordance with Section 7.04, may at any time remove the Trustee and nominate a successor trustee which shall be deemed appointed as successor trustee unless within ten (10) days after notice to the Company of such nomination the Company objects thereto, in which case the Trustee so removed or any Noteholder, upon the terms and conditions and otherwise as in Section 6.10(a) provided, may petition at the expense of the Company any court of competent jurisdiction for an appointment of a successor trustee.

 

(d)                                 Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 6.10 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 6.11.

 

Section 6.11.   Acceptance by Successor Trustee. Any successor trustee appointed as provided in Section 6.10 shall execute, acknowledge and deliver to the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 6.06, execute and deliver an instrument transferring to such successor trustee all the rights and powers of the trustee so ceasing to act.  Upon request of any such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers.  Any trustee ceasing to act shall, nevertheless, retain a lien upon all property and funds held or collected by such trustee as such, except for funds held in trust for the benefit of holders of particular Notes, to secure any amounts then due it pursuant to the provisions of Section 6.06.

 

No successor trustee shall accept appointment as provided in this Section 6.11 unless at the time of such acceptance such successor trustee shall be qualified under the provisions of Section 6.08 and be eligible under the provisions of Section 6.09.

 

Upon acceptance of appointment by a successor trustee as provided in this Section 6.11, each of the Company and the successor trustee, at the written direction and at the expense of the

 

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Company shall mail or cause to be mailed notice of the succession of such trustee hereunder to the Noteholders at their addresses as they shall appear on the Note Register.  If the Company fails to mail such notice within ten (10) days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Company.

 

Section 6.12.   Succession by Merger, Etc. Any corporation or other entity into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or other entity succeeding to all or substantially all of the corporate trust business of the Trustee (including the administration of this Indenture), shall be the successor to the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that in the case of any corporation succeeding to all or substantially all of the corporate trust business of the Trustee such corporation shall be qualified under the provisions of Section 6.08 and eligible under the provisions of Section 6.09.

 

In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee or authenticating agent appointed by such predecessor trustee, and deliver such Notes so authenticated, and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee or an authenticating agent appointed by such successor trustee may authenticate such Notes either in the name of any predecessor trustee hereunder or in the name of the successor trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate Notes in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation.

 

Section 6.13.   Limitation on Rights of Trustee as Creditor. If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Notes), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of the claims against the Company (or any such other obligor).

 

Section 6.14.   Trustee’s Application for Instructions from the Company. Any application by the Trustee for written instructions from the Company (other than with regard to any action proposed to be taken or omitted to be taken by the Trustee that affects the rights of the holders of the Notes under this Indenture) may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective.  The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three (3) Business Days after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing to any earlier date), unless, prior to taking any such action (or the effective date in the case of any omission), the Trustee shall have received written instructions in response to such proposal specifying the action to be taken or omitted.

 

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ARTICLE VII

 

CONCERNING THE NOTEHOLDERS

 

Section 7.01.   Action by Noteholders. Whenever in this Indenture it is provided that the holders of a specified percentage in aggregate principal amount of the Notes may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action, the holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Noteholders in person or by agent or proxy appointed in writing, or (b) by the record of the Noteholders voting in favor thereof at any meeting of Noteholders duly called and held in accordance with the provisions of Article VIII, or (c) by a combination of such instrument or instruments and any such record of such a meeting of Noteholders and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.  Whenever the Company or the Trustee solicits the taking of any action by the holders of the Notes, the Company or the Trustee may fix, but shall not be required to, in advance of such solicitation, a date as the record date for determining Noteholders entitled to take such action.  The record date if one is selected shall be not more than fifteen (15) days prior to the date of commencement of solicitation of such action.  Any request, demand, authorization, direction, notice consent, waiver or other action by a Holder of any Note shall bind every future Holder of the same Note, and the holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted, or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Note.

 

Section 7.02.   Proof of Execution by Noteholders. Subject to the provisions of Section 6.01, Section 6.02 and Section 8.05, proof of the execution of any instrument by a Noteholder or his agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee.  The holding of Notes shall be proved by the Note Register or by a certificate of the Note Registrar.  The record of any Noteholders’ meeting shall be proved in the manner provided in Section 8.06.

 

Section 7.03.   Who Are Deemed Absolute Owners. The Company, the Trustee, any authenticating agent, any Paying Agent, any Conversion Agent and any Note Registrar may deem the person in whose name such Note shall be registered upon the Note Register to be, and may treat him as, the absolute owner of such Note (whether or not such Note shall be overdue and notwithstanding any notation of ownership or other writing thereon made by any Person other than the Company or any Note Registrar) for the purpose of receiving payment of or on account of the principal of and accrued and unpaid interest on such Note, for conversion of such Note and for all other purposes; and neither the Company nor the Trustee nor any Paying Agent nor any Conversion Agent nor any Note Registrar shall be affected by any notice to the contrary.  All such payments so made to any holder for the time being, or upon his order, shall be valid,

 

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and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for monies payable upon any such Note.  Notwithstanding anything to the contrary in this Indenture or the Notes following an Event of Default, any holder of a beneficial interest in a Global Note may directly enforce against the Company, without the consent, solicitation, proxy, authorization or any other action of the Depositary or any other person, such holder’s right to exchange such beneficial interest for a Note in certificated form in accordance with the provisions of this Indenture.

 

Section 7.04.   Company-Owned Notes Disregarded. In determining whether the holders of the requisite aggregate principal amount of Notes have concurred in any direction, consent, waiver or other action under this Indenture, Notes that are owned by the Company or any other obligor on the Notes or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any other obligor on such Notes shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, consent, waiver or other action only Notes that a Responsible Officer knows are so owned shall be so disregarded.  Notes so owned that have been pledged in good faith may be regarded as outstanding for the purposes of this Section 7.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Notes and that the pledgee is not the Company, any other obligor on the Notes or a person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor.  In the case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.  Upon request of the Trustee, the Company shall furnish to the Trustee promptly an Officers’ Certificate listing and identifying all Notes, if any, known by the Company to be owned or held by or for the account of any of the above described persons; and, subject to Section 6.01, the Trustee shall be entitled to accept such Officers’ Certificate as conclusive evidence of the facts therein set forth and of the fact that all Notes not listed therein are outstanding for the purpose of any such determination.

 

Section 7.05.   Revocation of Consents; Future Holders Bound. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 9.01, of the taking of any action by the holders of the percentage in aggregate principal amount of the Notes specified in this Indenture in connection with such action, any holder of a Note that is shown by the evidence to be included in the Notes the holders of which have consented to such action may, by filing written notice with the Trustee at its Corporate Trust Office and upon proof of holding as provided in Section 7.02, revoke such action so far as concerns such Note.  Except as aforesaid, any such action taken by the holder of any Note shall be conclusive and binding upon such holder and upon all future holders and owners of such Note and of any Notes issued in exchange or substitution therefor, irrespective of whether any notation in regard thereto is made upon such Note or any Note issued in exchange or substitution therefor.

 

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ARTICLE VIII

 

NOTEHOLDERS’ MEETINGS

 

Section 8.01.   Purpose of Meetings. A meeting of Noteholders may be called at any time and from time to time pursuant to the provisions of this Article VIII for any of the following purposes:

 

(a)                                 to give any notice to the Company or to the Trustee or to give any directions to the Trustee permitted under this Indenture, or to consent to the waiving of any default or Event of Default hereunder and its consequences, or to take any other action authorized to be taken by Noteholders pursuant to any of the provisions of Article V;

 

(b)                                 to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article VI;

 

(c)                                  to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 9.02; or

 

(d)                                 to take any other action authorized to be taken by or on behalf of the holders of any specified aggregate principal amount of the Notes under any other provision of this Indenture or under applicable law.

 

Section 8.02.   Call of Meetings by Trustee. The Trustee may at any time call a meeting of Noteholders to take any action specified in Section 8.01, to be held at such time and at such place as the Trustee shall determine.  Notice of every meeting of the Noteholders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting and the establishment of any record date pursuant to Section 7.01, shall be mailed to holders of such Notes at their addresses as they shall appear on the Note Register.  Such notice shall also be mailed to the Company.  Such notices shall be mailed not less than twenty (20) nor more than ninety (90) days prior to the date fixed for the meeting.

 

Any meeting of Noteholders shall be valid without notice if the holders of all Notes then outstanding are present in person or by proxy or if notice is waived before or after the meeting by the holders of all Notes outstanding, and if the Company and the Trustee are either present by duly authorized representatives or have, before or after the meeting, waived notice.

 

Section 8.03.   Call of Meetings by Company or Noteholders. In case at any time the Company, pursuant to a resolution of its Board of Directors, or the holders of at least 10% in aggregate principal amount of the Notes then outstanding, shall have requested the Trustee to call a meeting of Noteholders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed the notice of such meeting within twenty (20) days after receipt of such request, then the Company or such Noteholders may determine the time and the place for such meeting and may call such meeting to take any action authorized in Section 8.01, by mailing notice thereof as provided in Section 8.02.

 

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Section 8.04.   Qualifications for Voting. To be entitled to vote at any meeting of Noteholders a person shall (a) be a holder of one or more Notes on the record date pertaining to such meeting or (b) be a person appointed by an instrument in writing as proxy by a holder of one or more Notes.  The only persons who shall be entitled to be present or to speak at any meeting of Noteholders shall be the persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.

 

Section 8.05.   Regulations. Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Noteholders, in regard to proof of the holding of Notes and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall think fit.

 

The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Noteholders as provided in Section 8.03, in which case the Company or the Noteholders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman.  A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the holders of a majority in principal amount of the Notes represented at the meeting and entitled to vote at the meeting.

 

Subject to the provisions of Section 7.04, at any meeting of Noteholders each Noteholder or proxyholder shall be entitled to one vote for each $1,000 principal amount of Notes held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Note challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding.  The chairman of the meeting shall have no right to vote other than by virtue of Notes held by him or instruments in writing as aforesaid duly designating him as the proxy to vote on behalf of other Noteholders.  Any meeting of Noteholders duly called pursuant to the provisions of Section 8.02 or Section 8.03 may be adjourned from time to time by the holders of a majority of the aggregate principal amount of Notes represented at the meeting, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice.

 

Section 8.06.   Voting. The vote upon any resolution submitted to any meeting of Noteholders shall be by written ballot on which shall be subscribed the signatures of the Noteholders or of their representatives by proxy and the principal amount of the Notes held or represented by them.  The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting.  A record in duplicate of the proceedings of each meeting of Noteholders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was mailed as provided in Section 8.02.  The record shall show the principal amount of the Notes voting in favor of or against any resolution.  The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the

 

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Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.

 

Any record so signed and verified shall be conclusive evidence of the matters therein stated.

 

Section 8.07.   No Delay of Rights by Meeting. Nothing contained in this Article VIII shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Noteholders or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Noteholders under any of the provisions of this Indenture or of the Notes.

 

ARTICLE IX

 

SUPPLEMENTAL INDENTURES

 

Section 9.01.   Supplemental Indentures Without Consent of Noteholders. The Company, when authorized by the resolutions of the Board of Directors, and the Trustee, at the Company’s expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes:

 

(a)                                 to cure any ambiguity, omission, defect or inconsistency or to conform this Indenture to the “Description of the Notes” section of the offering circular relating to the Notes;

 

(b)                                 to provide for the assumption by a Successor Company of the obligations of the Company under the Indenture pursuant to Article X;

 

(c)                                  to make provisions with respect to conversion rights of the Noteholders pursuant to and in accordance with Section 13.06;

 

(d)                                 to appoint a successor trustee;

 

(e)                                  to provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code);

 

(f)                                   to add guarantees with respect to the Notes;

 

(g)                                  to secure the Notes;

 

(h)                                 to add to the covenants of the Company for the benefit of the holders or surrender any right or power conferred upon the Company;

 

(i)                                     to make any change that does not materially adversely affect the rights of any holder; or

 

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(j)                                    to comply with any requirements of the Commission in connection with the qualification of the Indenture under the Trust Indenture Act.

 

Upon the written request of the Company, accompanied by a Board Resolution authorizing the execution of such supplemental indenture, the Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer and assignment of any property thereunder, but the Trustee shall not be obligated to, but may in its discretion, enter into any supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Any supplemental indenture authorized by the provisions of this Section 9.01 may be executed by the Company and the Trustee without the consent of the holders of any of the Notes at the time outstanding.

 

Section 9.02.   Supplemental Indentures With Consent of Noteholders. With the consent (evidenced as provided in Article VII) of the holders of at least a majority in aggregate principal amount of the Notes at the time outstanding (determined in accordance with Article VII and including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), the Company, when authorized by the resolutions of the Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or any supplemental indenture or of modifying in any manner the rights of the holders of the Notes; provided, however, that no such supplemental indenture shall:

 

(a)                                 reduce the percentage in aggregate principal amount of Notes the holders of which must consent to an amendment;

 

(b)                                 reduce the rate, or extend the stated time for payment, of interest on any Note;

 

(c)                                  reduce the principal, or extend the Maturity Date, of any Note;

 

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

 

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

 

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

 

(g)                                  impair the right of any holder to receive payment of principal of, and interest, on, such holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder’s Note; or

 

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(h)                                 make any change in the provisions of this Article IX that require each holder’s consent or in the waiver provisions in Section 5.01 and Section 5.07,

 

in each case without the consent of each holder of an outstanding Note affected.

 

Upon the written request of the Company, accompanied by a copy of the Board Resolutions authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Noteholders as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

 

It shall not be necessary for the consent of the Noteholders under this Section 9.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.  After an amendment under the Indenture becomes effective, the Company shall mail to the holders a notice briefly describing such 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 amendment.

 

Section 9.03.   Effect of Supplemental Indentures. Upon the execution of any supplemental indenture pursuant to the provisions of this Article IX, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitation of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the Noteholders shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

Section 9.04.    Notation on Notes. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article IX may bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture.  If the Company or the Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may, at the Company’s expense, be prepared and executed by the Company, authenticated by the Trustee (or an authenticating agent duly appointed by the Trustee pursuant to Section 15.11) and delivered in exchange for the Notes then outstanding, upon surrender of such Notes then outstanding.

 

Section 9.05.   Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee. In addition to the documents required by Section 15.05, the Trustee shall receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article IX.

 

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ARTICLE X

 

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

 

Section 10.01.   Company May Consolidate, etc. on Certain Terms.  Subject to the provisions of Section 10.02, the Company shall not consolidate with, merge with or into, or convey, transfer or lease all or substantially all of its assets and properties to another Person, unless:

 

(a)           the resulting, surviving or transferee Person (the “Successor Company”) if not the Company shall be a corporation, partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Company) shall expressly assume, by supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Notes, this Indenture; and

 

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

 

For purposes of this Section 10.01, the sale, lease, conveyance, assignment, transfer, or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Company, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

 

Section 10.02.   Successor Corporation to be Substituted. In case of any such consolidation, merger, conveyance, transfer or lease and upon the assumption by the Successor Company, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of and accrued and unpaid interest on all of the Notes, the due and punctual conversion of the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Company, such Successor Company shall succeed to and be substituted for the Company and the Company shall be released from those obligations, with the same effect as if it had been named herein as the party of the first part, except in the case of a lease.  Such Successor Company thereupon may cause to be signed, and may issue either in its own name or in the name of the Company any or all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such Successor Company instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause to be authenticated and delivered, any Notes which previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication, and any Notes which such Successor Company thereafter shall cause to be signed and delivered to the Trustee for that purpose.  All the Notes so issued shall in all respects have the same legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Notes had been issued at the date of the execution hereof.  In the event of any such consolidation, merger, conveyance, transfer or lease, the person named as the “Company” in the

 

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first paragraph of this Indenture or any successor which shall thereafter have become such in the manner prescribed in this Article X may be dissolved, wound up and liquidated at any time thereafter and such person shall be released from its liabilities as obligor and maker of the Notes and from its obligations under this Indenture.

 

In case of any such consolidation, merger, conveyance, transfer or lease, such changes in phraseology and form (but not in substance) may be made in the Notes thereafter to be issued as may be appropriate.

 

Section 10.03.   Officers’ Certificate and Opinion of Counsel to Be Given Trustee. No merger, consolidation, sale transfer or lease shall be effective unless the Trustee shall receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation, merger, conveyance, transfer or lease and any such assumption complies with the provisions of this Article X.

 

ARTICLE XI

 

SATISFACTION AND DISCHARGE OF INDENTURE

 

Section 11.01.   Discharge of Indenture. When (a) the Company shall deliver to the Note Registrar for cancellation all Notes theretofore authenticated (other than any Notes that have been destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) and not theretofore canceled, or (b) all the Notes not theretofore canceled or delivered to the Notes Registrar for cancellation shall have become due and payable, whether on the Maturity Date or on any earlier Designated Event Repurchase Date or otherwise and/or have been converted (and the related amounts payable upon conversion have been determined), and the Company shall deposit with the Trustee, cash or cash and shares of Common Stock, if any (solely to satisfy the Company’s Conversion Obligation, if applicable), as applicable, sufficient to pay all of the Notes (other than any Notes that shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) not theretofore canceled or delivered to the Trustee for cancellation, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect except as to (i) the right of holders to receive payments of principal of and accrued and unpaid interest, and any unpaid Conversion Obligation, if any, on, the Notes and the other rights, duties and obligations of Noteholders, as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee (ii) the rights, obligations and immunities of the Trustee hereunder and (iii) the obligations of the Company under Section 6.06, and the Trustee, on written demand of the Company accompanied by an Officers’ Certificate and an Opinion of Counsel as required by Section 15.05 and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of and discharging this Indenture; 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 this Indenture or the Notes.

 

Section 11.02.   Deposited Monies to Be Held in Trust by Trustee. Subject to Section 11.04, all monies deposited with the Trustee pursuant to Section 11.01 shall be held in

 

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trust and applied by it to the payment, either directly or through any Paying Agent (including the Company if acting as its own Paying Agent), to the holders of the particular Notes for the payment of which such monies have been deposited with the Trustee, of all sums due thereon for principal and accrued and unpaid interest.

 

Section 11.03.   Paying Agent to Repay Monies Held. Upon the satisfaction and discharge of this Indenture, all monies then held by any Paying Agent of the Notes (other than the Trustee) shall, upon written request of the Company, be repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be released from all further liability with respect to such monies.

 

Section 11.04.   Return of Unclaimed Monies. Subject to the requirements of applicable law, any monies deposited with or paid to the Trustee for payment of the principal of or accrued and unpaid interest on, Notes and not applied but remaining unclaimed by the Noteholders for two years after the date upon which the principal of or accrued and unpaid interest on such Notes, as the case may be, shall have become due and payable, shall be repaid to the Company by the Trustee on written request and all liability of the Trustee shall thereupon cease with respect to such monies; and the holder of any of the Notes shall thereafter look only to the Company for any payment which such holder may be entitled to collect unless an applicable abandoned property law designates another person.  The Trustee shall, promptly after such payment of the principal of, and any accrued and unpaid interest, on Notes, as described in this Section 11.04 and upon written request of the Company, return to the Company any funds in excess of the amount required for such payment.

 

Section 11.05.   Reinstatement. If (a) the Trustee or the Paying Agent is unable to apply any money in accordance with Section 11.02 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application and (b) the holders of at least a majority in principal amount of the then outstanding Notes so request by written notice to the Trustee, the Company’s obligations under this Indenture shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 until such time as the Trustee or the Paying Agent is permitted to apply all such money in accordance with Section 11.02; provided, however, that if the Company makes any payment of interest on or principal of any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Noteholders to receive such payment from the money held by the Trustee or Paying Agent.

 

ARTICLE XII

 

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

 

Section 12.01.   Indenture and Notes Solely Corporate Obligations. No recourse for the payment of the principal of, or accrued and unpaid interest on, any Note, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Note, or because of the creation of any Indebtedness represented thereby, shall be had against any past, present or future incorporator, stockholder, employee, agent, officer or director or Subsidiary of the Company as such or of any successor corporation, either directly or through

 

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the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Notes.

 

ARTICLE XIII

 

CONVERSION OF NOTES

 

Section 13.01.   Conversion Privilege.

 

(a)           Subject to the conditions described in clause (i), (ii), and (iii) below, and upon compliance with the provisions of this Article XIII, a Noteholder shall have the right, at such holder’s option, to convert all or any portion (if the portion to be converted is $1,000 principal amount or an integral multiple thereof; provided that the remaining principal amount of any Note so converted is $2,000 or an integral multiple of $1,000 in excess thereof) of such Note at any time prior to the close of business on the Business Day immediately preceding July 15, 2020 at a rate (the “Conversion Rate”) of 10.8470 shares of Common Stock (subject to adjustment by the Company as provided in Section 13.04 and Section 13.01(e)) per $1,000 principal amount Note (the “Conversion Obligation”) under the circumstances and during the periods set forth below.  On and after July 15, 2020, regardless of the conditions described in clause (i), (ii) and (iii) below, and upon compliance with the provisions of this Article XIII, a Noteholder shall have the right, at such holder’s option, to convert all or any portion (if the portion to be converted is $1,000 principal amount or an integral multiple thereof; provided that the remaining principal amount of any Note so converted is $2,000 or an integral multiple of $1,000 in excess thereof) of such Note at any time prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date.

 

(i)            The Notes shall be convertible prior to the close of business on the Business Day immediately prior to July 15, 2020, during the five Business Day period immediately after any five consecutive Trading Day period (the “Measurement Period”) in which the Trading Price per $1,000 principal amount of Notes for each day of such Measurement Period was less than 98% of the product of the Last Reported Sale Price of the Common Stock on such date and the Conversion Rate on such date, all as determined by the Bid Solicitation Agent.  The Bid Solicitation Agent shall have no obligation to determine the Trading Price of the Notes unless requested by the Company to do so in writing.  The Company shall have no obligation to make such a determination unless a Noteholder of at least $1,000,000 aggregate principal amount of Notes provides the Company with reasonable evidence that the Trading Price of the Notes would be less than 98% of the product of (a) the then-applicable Conversion Rate of the Notes and (b) the Last Reported Sale Price at such time, at which time the Company shall instruct the Bid Solicitation Agent to determine the Trading Price of the Notes beginning on the next Trading Day and on each successive Trading Day until the Trading Price per Note is greater than or equal to 98% of the product of (a) the then-applicable Conversion Rate of the Notes and (b) the Last Reported Sale Price on such date.  If the Trading Price condition set forth above has been met, the Company shall so notify the Noteholders.  If, at any time after the Trading Price condition set forth above has been met, the Trading

 

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Price per $1,000 principal amount of Notes is greater than 98% of the product of (a) the then-applicable Conversion Rate of the Notes and (b) the Last Reported Sale Price on such date, the Company shall so notify the Noteholders.

 

(ii)           The Notes shall be convertible prior to the close of business on the Business Day immediately prior to July 15, 2020, during any calendar quarter after the calendar quarter ending December 29, 2013, if the Last Reported Sale Price of the Common Stock for twenty (20) or more Trading Days (whether or not consecutive) in a period of thirty (30) consecutive Trading Days ending on, and including, the last Trading Day of the immediately preceding calendar quarter exceeds 130% of the applicable Conversion Price in effect on the last Trading Day of the immediately preceding calendar quarter.

 

(iii)          The Notes shall be convertible prior to the close of business on the Business Day immediately prior to July 15, 2020 as provided in Section 13.01(b), Section 13.01(c) and Section 13.01(d).

 

(b)           In the event that the Company elects to:

 

(i)            distribute to all or substantially all holders of Common Stock rights entitling them to purchase, for a period expiring within 60 days after the record date for such distribution, Common Stock at a price less than the average of the Last Reported Sale Prices of the Common Stock for the ten consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of public announcement of such distribution; or

 

(ii)           distribute to all or substantially all holders of Common Stock assets or debt securities of the Company or rights to purchase the Company’s securities, which distribution has a per share value (as determined by the Board of Directors) exceeding 10% of the Last Reported Sale Price of the Common Stock on the day immediately preceding the declaration date of such distribution,

 

then, in either case, holders may surrender the Notes for conversion at any time on and after the date that the Company provides notice to holders referred to in the next sentence until the earlier of the close of business on the Business Day immediately preceding the Ex-Dividend Date for such distribution or the date the Company announces that such distribution will not take place.  The Company shall notify holders of any distribution referred to in either clause (i) or clause (ii) above and of the resulting conversion right no later than the 25th Scheduled Trading Day prior to the Ex-Dividend Date for such distribution.  Holders may not exercise this right if such Holder participates in the distribution without conversion.

 

(c)           If the Company consolidates with or merges with or into another Person or is a party to a binding share exchange or conveys, transfers, sells, leases or otherwise disposes of all or substantially all of its properties and assets in each case pursuant to which the Common Stock would be converted into cash, securities and/or other property, then the holders shall have the right to convert Notes at any time beginning fifteen calendar days prior to the date that is the actual effective date of the transaction and until and including the date that is fifteen calendar

 

52

 

days after the effective date of such transaction; provided such transaction does not otherwise constitute a Designated Event to which the provisions of Section 13.01(d) shall apply.  The Company will notify holders of Notes at least 20 calendar days prior to the anticipated effective date of such transaction.  The Board of Directors shall determine the anticipated effective date of the transaction, and such determination shall be conclusive and binding on the holders and shall be publicly announced by the Company and posted on its web site not later than two Business Day prior to such 15th day.

 

(d)           If the Company is a party to any transaction or event that constitutes a Designated Event, a holder may surrender Notes for conversion at any time from and after the 30th Scheduled Trading Day prior to the anticipated effective date of such transaction or event until the related Designated Event Repurchase Date and, upon such surrender, if such Designated Event also constitutes a Fundamental Change, the holder shall be entitled to the increase in the Conversion Rate, if any, specified in Section 13.01(e).  The Company shall give notice in writing to all Noteholders and the Trustee of the Designated Event no later than 35 Scheduled Trading Days prior to the anticipated effective date of the Designated Event.

 

(e)           (i)  If a Noteholder elects to convert Notes in connection with a Fundamental Change that occurs prior to October 15, 2020, the Conversion Rate applicable to each $1,000 principal amount of Notes so converted shall be increased by an additional number of shares of Common Stock (the “Additional Shares”) as described below; provided, however, that no increase will be made in the case of Fundamental Change if at least 90% of the consideration paid for the Common Stock (excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights) in such Fundamental Change transaction consists of shares of capital stock traded on the New York Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market or another U.S. national securities exchange or quoted on an established automated over-the-counter trading market in the United States (or that will be so traded or quoted immediately following the transaction) and, as a result of such transaction or transactions, the Notes become convertible solely into such common stock.  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 13.02(d) below.  The Company shall notify Noteholders of the occurrence of a Fundamental Change and issue a press release no later than 30 Scheduled Trading Days prior to the anticipated Effective Date of such transaction.  For purposes of this Section 13.01(e), a conversion shall be deemed to be “in connection” with a Fundamental Change to the extent that such conversion is effected during the time period specified in Section 13.01(d) (regardless of whether the provisions of clause (a)(i), (a)(ii), (b) or (c) of this Section 13.01 shall apply to 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 Fundamental Change occurs or becomes effective (the “Effective Date”), and the Stock Price; provided that if the actual Stock Price is between two Stock Price amounts in the table or the Effective Date is between two Effective Dates in the table, the number of Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the next higher and next lower Stock Price amounts and the two nearest Effective Dates, as applicable, based on a 365-day year; provided, further, that if (1) the Stock Price is greater than $300.00

 

53

 

per share of Common Stock (subject to adjustment in the same manner as set forth in Section 13.01(e)(iii)), no Additional Shares will be added to the Conversion Rate, and (2) the Stock Price is less than $68.29 per share (subject to adjustment in the same manner as set forth in Section 13.01(e)(iii)), no Additional Shares will be added to the Conversion Rate.  Notwithstanding the foregoing, in no event will the Conversion Rate including such Additional Shares exceed 14.6434 shares of Common Stock per $1,000 principal amount of Notes (subject to adjustment in the same manner as set forth in Section 13.04).

 

(iii)          The Stock Prices set forth in the first row of the table in Schedule A hereto shall be adjusted by the Company as of any date on which the Conversion Rate of the Notes is 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.  The number of Additional Shares within the table shall be adjusted in the same manner as the Conversion Rate as set forth in Section 13.04 (other than by operation of an adjustment to the Conversion Rate by adding Additional Shares).

 

Section 13.02.   Conversion Procedure.

 

(a)           Subject to Section 13.02(b), the Company will satisfy the Conversion Obligation with respect to each $1,000 principal amount of Notes tendered for conversion in cash and shares of fully paid Common Stock, if applicable, by delivering, on the third Trading Day immediately following the last day of the related Observation Period, cash and shares of Common Stock, if any, equal to the sum of the Daily Settlement Amounts for each of the 20 Trading Days during the related Observation Period; provided that the Company will deliver cash in lieu of fractional shares of Common Stock as set forth pursuant to clause (k) below.  The Daily Settlement Amounts shall be determined by the Company promptly following the last day of the Observation Period.

 

(b)           Notwithstanding Section 13.02(a), the Company shall satisfy the Conversion Obligation with respect to each $1,000 principal amount of Notes tendered for conversion to which Additional Shares shall be added to the Conversion Rate as set forth in Section 13.01(e) pursuant to this clause (b).

 

(A)          If the last day of the applicable Observation Period related to Notes surrendered for conversion is prior to the third Trading Day preceding the Effective Date of the Fundamental Change, the Company will satisfy the related Conversion Obligation with respect to each $1,000 principal amount of Notes tendered for conversion as described in Section 13.02(b) by delivering the cash and shares of Common Stock (based on the Conversion Rate, but without regard to the number of Additional Shares to be added to the Conversion Rate pursuant to Section 13.01(e)) on the third Trading Day immediately following the last day of the applicable Observation Period.  As soon as practicable following the Effective Date of the Fundamental Change, the Company will deliver the increase in such amount of cash and Reference Property in lieu of shares of Common Stock, if any, as if the Conversion Rate had been increased by such number of

 

54

 

Additional Shares during the related Observation Period (and based upon the related Daily VWAP prices during such Observation Period).  If such increased amount results in an increase to the amount of cash to be paid to holders, the Company will pay such increase in cash, and if such increased amount results in an increase to the number of shares of Common Stock, the Company will deliver such increase by delivering Reference Property based on such increased number of shares.

 

(B)          If the last day of the applicable Observation Period related to Notes surrendered for conversion is on or following the third Scheduled Trading Day preceding the Effective Date of such Fundamental Change, the Company will satisfy the Conversion Obligation with respect to each $1,000 principal amount of Notes tendered for conversion as described in Section 13.01(b) (based on the Conversion Rate as increased by the Additional Shares pursuant to Section 13.01(e) above) on the later to occur of (1) the Effective Date of the Fundamental Change and (2) the third Trading Day immediately following the last day of the applicable Observation Period.

 

(c)           Before any holder of a Note shall be entitled to convert the same as set forth above, such holder shall (1) in the case of a Global Note, comply with the procedures of the Depositary in effect at that time and, if required, pay funds equal to interest payable on the next Interest Payment Date to which such holder is not entitled as set forth in Section 13.02(i) and, if required, pay all taxes or duties, if any, and (2) in the case of a Note issued in certificated form, (A) complete and manually sign and deliver an irrevocable written notice to the Conversion Agent in the form on the reverse of such certificated Note (or a facsimile thereof) (a “Notice of Conversion”) at the office of the Conversion Agent and shall state in writing therein the principal amount of Notes to be converted and the name or names (with addresses) in which such holder wishes the certificate or certificates for any shares of Common Stock, if any, to be delivered upon settlement of the Conversion Obligation to be registered, (B) surrender such Notes, duly endorsed to the Company or in blank (and accompanied by appropriate endorsement and transfer documents), at the office of the Conversion Agent, (C) if required, pay funds equal to interest payable on the next Interest Payment Date to which such holder is not entitled as set forth in Section 13.02(i), and (D) if required, pay all taxes or duties, if any.  A Note shall be deemed to have been converted immediately prior to the close of business on the date (the “Conversion Date”) that the holder has complied with the requirements set forth in this Section 13.02(c).

 

No Notice of Conversion with respect to any Notes may be tendered by a holder thereof if such holder has also tendered a Designated Event Repurchase Notice and not validly withdrawn such Designated Event Repurchase Notice in accordance with the applicable provisions of Section 14.01, except with respect to any portion of such Note that is not subject to the Designated Event Repurchase Notice.

 

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

 

55

 

(d)           Delivery of the amounts owing in satisfaction of the Conversion Obligation shall be made by the Company in no event later than the date specified in Section 13.02(a), except to the extent specified in Section 13.02(b).  The Company shall make such delivery by paying the cash amount owed to the Conversion Agent or to the holder of the Note surrendered for conversion, or such holder’s nominee or nominees, and by issuing, or causing to be issued, and delivering to the Conversion Agent or to such holder, or such holder’s nominee or nominees, certificates or a book-entry transfer through the Depositary for the number of full shares of Common Stock, if any, to which such holder shall be entitled as part of such Conversion Obligation (together with any cash in lieu of fractional shares).

 

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

 

(f)            If a holder submits a Note for conversion, the Company shall pay all stamp and other duties, if any, with respect to the issuance of shares of Common Stock, if any, upon the conversion.  However, the holder shall pay any such tax which is due because the holder requests any shares of Common Stock to be issued in a name other than the holder’s name.  The Conversion Agent may refuse to deliver the certificates representing the shares of Common Stock being issued in a name other than the holder’s name until the Trustee receives a sum sufficient to pay any tax which will be due because the shares are to be issued in a name other than the holder’s name.  Nothing herein shall preclude any tax withholding required by law or regulations.

 

(g)           Except as provided in Section 13.04, no adjustment shall be made for dividends on any shares issued upon the conversion of any Note as provided in this Article.

 

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

 

(i)            Upon conversion, a Noteholder will not receive any separate cash payment for accrued and unpaid interest except as set forth below.  The Company’s settlement of the Conversion Obligations as described above shall be deemed to satisfy its obligation to pay the principal amount of the Note and accrued and unpaid interest to, but not including, the Conversion Date.  As a result, accrued and unpaid interest to, but not including, the Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited.  Notwithstanding the preceding sentence, if Notes are converted after the close of business on a regular record date, holders of such Notes as of the close of business on the 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 opening of business on the corresponding Interest Payment Date must be accompanied by payment of an amount equal to the interest payable on the Notes so converted (regardless of whether the converting holder was the holder of

 

56

 

record on the corresponding regular record date); provided, however, that no such payment need be made (i) if the Company has specified a Designated Event Purchase Date that is after a regular record date and on or prior to the corresponding Interest Payment Date; (ii) to the extent of any overdue interest existing at the time of conversion with respect to such Note; or (iii) for conversions following the regular record date immediately preceding the Maturity Date.  Except as described above, no payment or adjustment will be made for accrued interest on converted Notes.

 

(j)            The Person in whose name the certificate for any shares of Common Stock issued upon conversion is registered shall be treated as a stockholder of record on and after the Conversion Date; provided, however, that no surrender of Notes on any date when the stock transfer books of the Company shall be closed shall be effective to constitute the Person or Persons entitled to receive the shares of Common Stock upon such conversion as the record holder or holders of such shares of Common Stock on such date, but such surrender shall be effective to constitute the Person or Persons entitled to receive such shares of Common Stock as the record holder or holders thereof for all purposes at the close of business on the next succeeding day on which such stock transfer books are open; such conversion shall be at the Conversion Rate in effect on the date that such Notes shall have been surrendered for conversion, as if the stock transfer books of the Company had not been closed.  Upon conversion of Notes, such Person shall no longer be a Noteholder.

 

(k)           No fractional shares of Common Stock shall be issued upon conversion of any Note or Notes.  If more than one Note shall be surrendered for conversion at one time by the same holder, the number of full shares that shall be issued upon conversion thereof shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof) so surrendered.  In lieu of any fractional share of Common Stock that would otherwise be issued upon conversion of any Note or Notes (or specified portions thereof), the Company shall pay cash in an amount equal to the fraction multiplied by the Last Reported Sale Price of the Common Stock on the last day of the applicable Observation Period.

 

Section 13.03.   [Intentionally Omitted].

 

Section 13.04.   Adjustment of Conversion Rate. The Conversion Rate shall be adjusted from time to time by the Company as follows:

 

(a)           In case the Company shall issue shares of Common Stock as a dividend or distribution to holders of all or substantially all of the outstanding Common Stock, or shall effect a subdivision into a greater number of shares of Common Stock or combination into a lesser number of shares of Common Stock, the Conversion Rate shall be adjusted based on the following formula:

 

 

where

 

CR0         =        the Conversion Rate in effect immediately prior to the Ex-Dividend Date for such event;

 

57

 

CR’                  =                         the Conversion Rate in effect immediately after the Ex-Dividend Date for such event;

 

OS0          =                         the number of shares of Common Stock outstanding immediately prior to the Ex-Dividend Date for such event;

 

OS’                    =                         the number of shares of Common Stock outstanding immediately after the Ex-Dividend Date for such event.

 

Such adjustment shall become effective immediately after 9:00 a.m., New York City time, on the Ex-Dividend Date for such event.  If any dividend or distribution of the type described in this Section 13.04(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 outstanding shares of Common Stock rights or warrants entitling them (for a period expiring within sixty (60) calendar days after the issuance thereof) to subscribe for or purchase shares of Common Stock at a price per share less than the average of the Last Reported Sale Prices of the Common Stock over the ten consecutive Trading Day period ending on the Business Day immediately preceding the date of announcement of such issuance, the Conversion Rate shall be adjusted based on the following formula:

 

 

where

 

CR0                                         =                         the Conversion Rate in effect immediately prior to the Ex-Dividend Date for such event;

 

CR’                                          =                         the Conversion Rate in effect immediately after the Ex-Dividend Date for such event;

 

OS0                                           =                         the number of shares of Common Stock outstanding immediately prior to the Ex-Dividend Date for such event;

 

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

 

Y                                                       =                         the number of shares of Common Stock equal to the aggregate price payable to exercise or convert such rights or warrants divided by the average of the Last Reported Sale Prices of Common Stock over the ten consecutive Trading Day period ending on the Business Day immediately

 

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preceding the Ex-Dividend Date relating to such distribution for the issuance of such rights or warrants.

 

Such adjustment shall be successively made whenever any such rights, warrants or convertible securities are issued and shall become effective immediately after 9:00 a.m., New York City time, on the Business Day following the date fixed for such determination.  If such rights, warrants or convertible securities are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such Record Date for such distribution had not been fixed.  To the extent that shares of Common Stock are not delivered after the expiration of such rights, warrants or convertible securities, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered.

 

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

 

(c)                                  In case the Company shall, by dividend or otherwise, distribute to all or substantially all holders of its Common Stock shares of any class of Capital Stock of the Company (other than Common Stock as covered by Section 13.04(a)), evidences of its Indebtedness or other assets or property of the Company (including securities, but excluding dividends and distributions covered by Section 13.04(a), Section 13.04(b) or Section 13.04(d) and distributions described below in this paragraph (c) with respect to Spin-Offs) (any of such shares of Capital Stock, Indebtedness, or other asset or property hereinafter in this Section 13.04(c) called the “Distributed Property”), then, in each such case the Conversion Rate shall be adjusted based on the following formula:

 

 

where

 

CR0                     =                         the Conversion Rate in effect immediately prior to the Ex-Dividend Date for such distribution;

 

CR’                                          =                         the Conversion Rate in effect immediately after the Ex-Dividend 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 Business Day immediately preceding the Ex-Dividend Date relating to such distribution; and

 

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FMV                                    =                         the fair market value (as determined by the Board of Directors) of the shares of Capital Stock, evidences of Indebtedness, assets or property distributed with respect to each outstanding share of Common Stock on the Ex-Dividend Date relating to such distribution.

 

Such adjustment shall become effective immediately prior to 4:00 a.m., New York City time, on the Business Day following the date fixed for the determination of stockholders entitled to receive such distribution; provided that if 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, in lieu of the foregoing adjustment, adequate provision shall be made so that each Noteholder shall have the right to receive, for each $1,000 principal amount of Notes upon conversion, the amount of Distributed Property such holder would have received had such holder owned a number of shares of Common Stock equal to the Conversion Rate on the Record Date.  If such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.  If the Board of Directors determines the fair market value of any distribution for purposes of this Section 13.04(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 13.04(c) where there has been a payment of a dividend or other distribution on the Common Stock or shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit (a “Spin-Off”), the Conversion Rate in effect immediately before 5:00 p.m., New York City time, on the Record Date fixed for determination of stockholders entitled to receive the distribution will be increased based on the following formula:

 

 

where

 

CR0                                         =                         the Conversion Rate in effect immediately prior to such distribution;

 

CR’                                          =                         the Conversion Rate in effect immediately after such distribution;

 

FMV0                               =                         the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock over the first ten consecutive Trading Day period from, and including, the effective date of the Spin-Off; and

 

MP0                                        =                         the average of the Last Reported Sale Prices of Common Stock over the first ten consecutive Trading Day period from, and including, the effective date of the Spin-Off.

 

Such adjustment shall occur on the tenth Trading Day from, and including, the effective date of the Spin-Off; provided that in respect of any conversion within the ten Trading Days from, and including, the effective date of such Spin-Off, references within this paragraph (c) to ten days

 

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shall be deemed replaced with such lesser number of trading days as have elapsed between such Spin-Off and the conversion date in determining the applicable Conversion Rate.

 

Rights or warrants distributed by the Company to all holders of Common Stock, entitling the holders thereof to subscribe for or purchase shares of the Company’s Capital Stock, including Common Stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this Section 13.04 (and no adjustment to the Conversion Rate under this Section 13.04 will be required) until the occurrence of the earliest Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 13.04(c).  If any such right or warrant, including any such existing rights or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights or warrants become exercisable to purchase different securities, evidences of Indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and record date with respect to new rights or warrants with such rights (and a termination or expiration of the existing rights or warrants without exercise by any of the holders thereof).  In addition, in the event of any distribution (or deemed distribution) of rights or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 13.04 was made, (1) in the case of any such rights or warrants that shall all have been redeemed or repurchased without exercise by any holders thereof, the Conversion Rate shall be readjusted upon such final redemption or repurchase to give effect to such distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or repurchase price received by a holder or holders of Common Stock with respect to such rights or warrants (assuming such holder had retained such rights or warrants), made to all holders of Common Stock as of the date of such redemption or repurchase, and (2) in the case of such rights or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights and warrants had not been issued.

 

For purposes of this Section 13.04(c), Section 13.04(a) and Section 13.04(b), any dividend or distribution to which this Section 13.04(c) is applicable that also includes shares of Common Stock to which Section 13.04(a) applies or rights or warrants to subscribe for or purchase shares of Common Stock to which Section 13.04(a) or Section 13.04(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 shares of Common Stock or rights or warrants to which Section 13.04(b) applies (and any Conversion Rate adjustment required by this Section 13.04(c) with respect to such dividend or distribution shall then be made) immediately followed by (2) a dividend or distribution of such shares of Common Stock or such rights or warrants (and any further Conversion Rate adjustment required by Section 13.04(a) and Section 13.04(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 13.04(a) and Section 13.04(b)

 

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and (B) any shares of Common Stock included in such dividend or distribution shall not be deemed “outstanding immediately prior to such event” within the meaning of Section 13.04(a).

 

(d)                                 In case the Company shall pay a dividend or make a distribution consisting exclusively of cash to all or substantially all holders of its Common Stock other than a regular quarterly cash dividend that does not exceed $0.225 per share (the “Initial Dividend Threshold”) (subject to adjustment as provided below), the Conversion Rate shall be adjusted based on the following formula:

 

 

where

 

CR0                                         =                         the Conversion Rate in effect immediately prior to the Ex-Dividend Date for such distribution;

 

CR’                                          =                         the Conversion Rate in effect immediately after the Ex-Dividend Date for such distribution;

 

SP0                                             =                         the Last Reported Sale Prices of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date relating to such distribution;

 

T                                                        =                         the Initial Dividend Threshold; provided that if the dividend or distribution in question is not a regular, quarterly cash dividend, the initial dividend threshold will be deemed to be zero; and

 

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

 

The Initial Dividend Threshold is subject to concurrent adjustment in a manner inversely proportional to adjustments to the Conversion Rate; provided that no adjustment will be made to the Initial Dividend Threshold for any adjustment to the Conversion Rate under this Section 13.04(d).

 

Such adjustment shall become effective immediately after 5:00 p.m., New York City time, on the Record Date for such dividend or distribution; provided that if the portion of the cash so distributed applicable to one share of Common Stock is equal to or greater than SP0 as above, in lieu of the foregoing adjustment, adequate provision shall be made so that each Noteholder shall have the right to receive upon conversion of a Note (or any portion thereof) the amount of cash such holder would have received had such holder owned a number of shares equal to the Conversion Rate on the Record Date.  If such dividend or distribution is not so paid or made, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

 

For the avoidance of doubt, for purposes of this Section 13.04(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

 

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pursuant to this Section 13.04(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 numbers of shares of such class issued in respect of one share of Common Stock in such reclassification.  The above provisions of this paragraph shall similarly apply to successive reclassifications.

 

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

 

 

where

 

CR0                                         =                         the Conversion Rate in effect on the date such tender or exchange offer expires;

 

CR’                                          =                         the Conversion Rate in effect on the day next succeeding the date such tender or exchange offer expires;

 

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

 

OS0                                           =                         the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires;

 

OS’                                            =                         the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires; and

 

SP’                                              =                         the average of the Last Reported Sale Prices of Common Stock over the ten consecutive Trading Day period commencing on the Trading Day next succeeding the date such tender or exchange offer expires,

 

such adjustment to become effective immediately prior to the opening of business on the day following the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer.  If the Company is obligated to purchase shares pursuant to any such tender or exchange offer, but the Company is permanently prevented by applicable law from effecting all or any such purchases or all or any portion of such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made or had only been made in respect of the purchases that had

 

63

 

been effected.  No adjustment to the Conversion Rate will be made if the application of the foregoing formula would result in a decrease in the Conversion Rate.

 

(f)                                   For purposes of this Section 13.04 the term “Record Date” shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of 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).

 

(g)                                  In addition to those required by clauses (a), (b), (c), (d), and (e) of this Section 13.04, and to the extent permitted by applicable law, the Company from time to time may increase the Conversion Rate by any amount for a period of at least 20 Business Days if the Board of Directors determines that such increase would be in the Company’s best interest.  In addition, the Company may also (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in connection with any dividend or distribution of shares (or rights to acquire shares) or similar event.  Whenever the Conversion Rate is increased pursuant to the preceding sentence, the Company shall mail to the holder of each Note at his last address appearing on the Note Register provided for in Section 2.06 a notice of the increase at least fifteen days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

 

(h)                                 All calculations and other determinations under this Article XIII shall be made by the Company and shall be made to the nearest cent or to the nearest one-ten thousandth (1/10,000) of a share, as the case may be.  No adjustment shall be made for the Company’s issuance of Common Stock or convertible or exchangeable securities or rights to purchase Common Stock or convertible or exchangeable securities, other than as provided in this Section 13.04.  No 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 and make such carried forward adjustments, regardless of whether the aggregate adjustment is less than 1% within one year of the first such adjustment carried forward, upon a Designated Event, a Fundamental Change, or upon maturity.

 

(i)                                     Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment.  The Trustee and Conversion Agent may conclusively rely on the accuracy of the Conversion Rate adjustment provided by the Company.  Unless and until a Responsible Officer of the Trustee shall have received such Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has knowledge is still in effect.  Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall mail such notice of such

 

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adjustment of the Conversion Rate to the holder of each Note at his last address appearing on the Note Register provided for in Section 2.06, within twenty (20) days of the effective date of such adjustment.  Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

 

(j)                                    In any case in which this Section 13.04 provides that an adjustment shall become effective immediately after (1) a record date or Record Date for an event, (2) the date fixed for the determination of stockholders entitled to receive a dividend or distribution pursuant to Section 13.04(a), (3) a date fixed for the determination of stockholders entitled to receive rights or warrants pursuant to Section 13.04(b), or (4) the last date on which tenders or exchanges may be made pursuant to any tender or exchange offer pursuant to Section 13.04(e) (each an “Adjustment Determination Date”), the Company may elect to defer until the occurrence of the applicable Adjustment Event (as hereinafter defined) (x) issuing to the holder of any Note converted after such Adjustment Determination Date and before the occurrence of such Adjustment Event, the additional cash and, if applicable, shares of Common Stock or other securities issuable upon such conversion by reason of the adjustment required by such Adjustment Event over and above the amounts deliverable upon such conversion before giving effect to such adjustment and (y) paying to such holder any amount in cash in lieu of any fraction pursuant to Section 13.04.  For purposes of this Section 13.04(j), the term “Adjustment Event” shall mean:

 

(i)                                     in any case referred to in clause (1) hereof, the occurrence of such event,

 

(ii)                                  in any case referred to in clause (2) hereof, the date any such dividend or distribution is paid or made,

 

(iii)                               in any case referred to in clause (3) hereof, the date of expiration of such rights or warrants, and

 

(iv)                              in any case referred to in clause (4) hereof, the date a sale or exchange of Common Stock pursuant to such tender or exchange offer is consummated and becomes irrevocable.

 

(k)                                 For purposes of this Section 13.04, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.

 

(l)                                     For the avoidance of doubt, if a holder converts Notes prior to the Effective Date of a Fundamental Change and the Fundamental Change does not occur, the holder will not be entitled to an increased Conversion Rate in connection with such conversion.

 

Section 13.05.   Shares to Be Fully Paid. The Company shall provide, free from preemptive rights, out of its authorized but unissued shares or shares held in treasury, a sufficient number of shares of Common Stock to provide for conversion of the Notes from time to time as such Notes are presented for conversion.

 

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Section 13.06.   Effect of Reclassification, Consolidation, Merger or Sale.

 

If any of the following events occur, namely (i) any reclassification or change of the outstanding shares of Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a split, subdivision or combination), (ii) any consolidation, merger or combination of the Company with another Person, or (iii) any sale or conveyance of all or substantially all of the property and assets of the Company to any other Person, in each case as a result of which holders of Common Stock shall be entitled to receive cash, securities or other property or assets with respect to or in exchange for such Common Stock (any such event a “Merger Event”), then:

 

(a)                                 the Company or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture permitted under Section 9.01(a) providing for the conversion and settlement of the Notes as set forth in this Indenture.  Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article and the Trustee may conclusively rely on the determination by the Company of the equivalency of such adjustments.  If, in the case of any Merger Event, the Reference Property includes shares of stock or other securities and assets of a corporation other than the successor or purchasing corporation, as the case may be, in such reclassification, change, consolidation, merger, combination, sale or conveyance, then such supplemental indenture shall also be executed by such other corporation and shall contain such additional provisions to protect the interests of the holders of the Notes as the Board of Directors shall reasonably consider necessary by reason of the foregoing, including to the extent required by the Board of Directors and practicable the provisions providing for the repurchase rights set forth in Article XIV herein.

 

The Initial Dividend Threshold shall be adjusted based on the number of shares of common stock, if any, comprising the Reference Property and, if applicable, the value of any non-stock consideration comprising the Reference Property. If the Reference Property is comprised solely of non-stock consideration, the Initial Dividend Threshold shall be zero.

 

In the event the Company shall execute a supplemental indenture pursuant to this Section 13.06, the Company shall promptly file with the Trustee an Officers’ Certificate briefly stating the reasons therefore, the kind or amount of cash, securities or property or asset that will constitute the Reference Property after any such Merger Event, any adjustment to be made with respect thereto and that all conditions precedent have been complied with, and shall promptly mail notice thereof to all Noteholders.

 

(b)                                 Notwithstanding the provisions of Section 13.02(a) and Section 13.02(b), and subject to the provisions of Section 13.01, at the effective time of such Merger Event, the right to convert each $1,000 principal amount of Notes will be changed to a right to convert such Note by reference to the kind and amount of cash, securities or other property or assets that a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such transaction would have owned or been entitled to receive (the “Reference Property”) such that from and after the effective time of such transaction, a Noteholder will be entitled thereafter to convert its Notes into cash (up to the aggregate principal amount thereof) and the same type (and in the same proportion) of Reference Property, based on the Daily Settlement Amounts of

 

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Reference Property in an amount equal to the applicable Conversion Rate, as described under Section 13.02(b).  For purposes of determining the constitution of Reference Property, the type and amount of consideration that a holder of Common Stock would have been entitled to in the case of reclassifications, consolidations, mergers, sales or conveyance of assets or other transactions that cause the Common Stock to be converted into the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election) will be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election.  The Company shall not become a party to any such transaction unless its terms are consistent with the preceding.  None of the foregoing provisions shall affect the right of a holder of Notes to convert its Notes in accordance with the provisions of Article XIII hereof prior to the effective date.

 

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

 

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

 

Section 13.07.   Certain Covenants.

 

(a)                                 Before taking any action which would cause an adjustment reducing the Conversion Rate below the then par value, if any, of the shares of Common Stock issuable upon conversion of the Notes, the Company will take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue shares of such Common Stock at such adjusted Conversion Rate.

 

The Company covenants that all shares of Common Stock issued upon conversion of Notes will be validly issued, fully paid and non-assessable by the Company and free from all taxes, liens and changes with respect to the issue thereof.

 

(b)                                 The Company covenants that, if any shares of Common Stock to be provided for the purpose of conversion of Notes hereunder require registration with or approval of any governmental authority under any federal or state law before such shares may be validly issued upon conversion, the Company will in good faith and as expeditiously as possible, to the extent then permitted by the rules and interpretations of the Commission (or any successor thereto), endeavor to secure such registration or approval, as the case may be.

 

(c)                                  The Company further covenants that if at any time the Common Stock shall be listed on any other national securities exchange or automated quotation system the Company will, if permitted and required by the rules of such exchange or automated quotation system, list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, all Common Stock issuable upon conversion of the Notes.

 

(d)                                 The Company covenants that it will take no corporate action which would result in the Conversion Rate being adjusted pursuant to Section 13.04 during the period beginning on the 25th Scheduled Trading Day preceding October 15, 2020 and ending on, and including,

 

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October 15, 2020, other than any such corporate action that may cause the Conversion Rate to adjust as a result of the payment of regular recurring cash dividends; provided that such dividends are not established or increased during the period beginning on the 25th scheduled Trading Day preceding October 15, 2020 and ending on, and including, October 15, 2020.

 

Section 13.08.   Responsibility of Trustee. Notwithstanding any provision of this Indenture to the contrary, the Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility to any Noteholder to determine the Conversion Rate or whether any facts exist which may require any adjustment of the Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same.  The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at any time be issued or delivered upon the conversion of any Note; and the Trustee and any other Conversion Agent make no representations with respect thereto.  Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Note for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article.

 

Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 13.06 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Noteholders upon the conversion of their Notes after any event referred to in such Section 13.06 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 6.01, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers’ Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto.

 

Section 13.09.   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 13.04; or

 

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

 

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

 

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(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 his address appearing on the Note Register, provided for in Section 2.06, as promptly as possible but in any event at least twenty days prior to the applicable date specified in clause (x) or (y) below, 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 or warrants, 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 exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.  Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, distribution, reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding-up.

 

Section 13.10.   Shareholder Rights Plans. Upon conversion of the Notes, the holders shall receive, in addition to any shares of Common Stock issuable upon such conversion, the associated rights issued under the Rights Plan or under any future shareholder rights plan the Company adopts unless, prior to conversion, the rights have separated from the Common Stock, expired, terminated or been redeemed or exchanged in accordance with the Rights Plan or such future shareholder rights plan, in which case the Conversion Rate shall be adjusted at the time of separation 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 13.04(e), subject to readjustment in the event of expiration, termination or redemption of such rights.  If, and only if, the holders receive rights under the Rights Plan or such future shareholder rights plans as described in the preceding sentence upon conversion of their Notes, then no other adjustment pursuant to this Article XIII shall be made in connection with such shareholder rights plans.

 

ARTICLE XIV

 

REPURCHASE OF NOTES AT OPTION OF HOLDERS

 

Section 14.01.   Repurchase at Option of Holders Upon a Designated Event.

 

(a)                                 If a Designated Event 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 (provided that the principal amount of any portion of such Note not purchased will be $2,000 or an integral multiple of $1,000 in excess thereof), for cash on the date (the “Designated Event Repurchase Date”) specified by the Company that is not less than twenty (20) days and not more than thirty five (35) calendar days after the date of the Designated Event Company Notice (as defined below) at a repurchase price equal to 100% of the principal amount thereof, together with accrued and unpaid interest thereon, if any, to, but excluding, the Designated Event Repurchase Date (unless the Designated Event Repurchase Date is between a regular record date

 

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and the corresponding Interest Payment Date, in which case the Designated Event Repurchase Price shall equal 100% of the principal amount thereof and the accrued and unpaid interest shall be paid to the holder of record on the regular record date) (the “Designated Event Repurchase Price”).

 

Repurchases of Notes under this Section 14.01 shall be made, at the option of the holder thereof, upon:

 

(i)                                     delivery to the Trustee (or other Paying Agent appointed by the Company) by a holder of a duly completed notice (the “Designated Event Repurchase Notice”) in the form set forth on the reverse of the Note prior to the close of business on the Business Day immediately preceding the Designated Event Repurchase Date; and

 

(ii)                                  delivery or book-entry transfer of the Notes to the Trustee (or other Paying Agent appointed by the Company) at any time after delivery of the Designated Event Repurchase Notice (together with all necessary endorsements) at the Corporate Trust Office of the Trustee (or other Paying Agent appointed by the Company) in the Borough of Manhattan, such delivery being a condition to receipt by the holder of the Designated Event Repurchase Price therefor; provided that such Designated Event Repurchase Price shall be so paid pursuant to this Section 14.01 only if the Note so delivered to the Trustee (or other Paying Agent appointed by the Company) shall conform in all respects to the description thereof in the related Designated Event Repurchase Notice.

 

The Designated Event Repurchase Notice shall state:

 

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

 

(B)                               the portion of the principal amount of Notes to be repurchased, which must be $1,000 or an integral multiple thereof (provided that the principal amount of any portion of such Note not purchased will be $2,000 or an integral multiple of $1,000 in excess thereof), and

 

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

 

Any purchase by the Company contemplated pursuant to the provisions of this Section 14.01 shall be consummated by the delivery of the consideration to be received by the holder promptly following the later of the Designated Event Repurchase Date and 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 Fundamental Change Repurchase Notice or written notice of withdrawal thereof in accordance with the provisions of Section 14.01(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 form satisfactory to the Company and the Trustee duly executed by the holder thereof

 

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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.

 

(b)                                 On or before the 20th day after the effective date of any Designated Event, the Company shall provide to all holders of record of the Notes and the Trustee and Paying Agent a notice (the “Designated Event Company Notice”) of the occurrence of such Designated Event 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 Designated Event Company Notice, the Company shall publish a notice containing the information included therein on the Company’s website or through such other public medium as the Company may use at such time.

 

Each Designated Event Company Notice shall specify:

 

(i)                                     the events causing the Designated Event and whether such Designated Event also constituted a Fundamental Change;

 

(ii)                                  the date of the Designated Event;

 

(iii)                               the Designated Event Repurchase Date;

 

(iv)                              the Designated Event Repurchase Price;

 

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

 

(vi)                              if applicable, the applicable Conversion Rate and any adjustments to the applicable Conversion Rate;

 

(vii)                           if applicable, that the Notes with respect to which a Designated Event Repurchase Notice has been delivered by a holder may be converted only if the holder validly has withdrawn the Designated Event Repurchase Notice in accordance with the terms of the indenture;

 

(viii)                        that the holder must exercise the repurchase right on or prior to the close of business on the Business Day immediately preceding the Designated Event Repurchase Date, subject to extension to comply with applicable law (the “Designated Event Expiration Time”);

 

(ix)                              that the holder shall have the right to withdraw any Notes surrendered prior to the Designated Event Expiration Time, and

 

(x)                                 the procedures that holders must follow to require the Company to repurchase their Notes.

 

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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 14.02.

 

(c)                                  A Designated Event Repurchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the Paying Agent in accordance with the Designated Event Company Notice at any time prior to the close of business on the Business Day immediately preceding the Designated Event Repurchase Date, specifying:

 

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

 

(ii)                                  the principal amount of the Note with respect to which such notice of withdrawal is being submitted, and

 

(iii)                               the principal amount, if any, of such Note that remains subject to the original Designated Event Repurchase Notice, which portion must be in principal amounts of $2,000 or an integral multiple of $1,000 in excess thereof;

 

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

 

(d)                                 On or prior to 11:00 a.m. (local time in The City of New York) on the Designated Event Repurchase Date, the Company shall deposit with the Trustee (or other Paying Agent appointed by the Company or if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in Section 5.04) an amount of money sufficient to repurchase on the Designated Event Repurchase Date all of the Notes to be repurchased on such date at the Designated Event Repurchase Price.  Subject to receipt of funds by the Trustee (or other Paying Agent appointed by the Company), payment for Notes surrendered for repurchase (and not withdrawn) prior to the Designated Event Expiration Time will be made promptly after the later of (x) the Designated Event Repurchase Date with respect to such Note (provided the holder has satisfied the conditions to the payment of the Designated Event Repurchase Price in Section 14.02), 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 Section 14.01, by mailing checks for the amount payable to the holders of such Notes entitled thereto as they shall appear in the Note Register, provided, however, that payments to the Depositary shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee.  The Trustee shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Designated Event Repurchase Price.

 

(e)                                  If the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to repurchase on the Designated Event Repurchase Date all the Notes or portions thereof that are to be purchased on the Designated Event Repurchase Date, then on and after the Designated Event Repurchase Date (i) such Notes validly tendered for purchase and not validly withdrawn will cease to be outstanding and interest will cease to accrue on such Notes, whether or not book-entry transfer of the Notes has been made or the Notes have been delivered to the

 

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Trustee or Paying Agent, and (ii) all other rights of the holders of such Notes will terminate other than the right to receive the Designated Event Repurchase Price upon delivery of the Notes and previously accrued and unpaid interest upon delivery or transfer of the Notes.

 

(f)                                   No Notes may be purchased at the option of Noteholders upon a Designated Event if there has occurred and is continuing an Event of Default other than an Event of Default that is cured by the payment of the Designated Event Purchase Price of the Notes.

 

ARTICLE XV

 

MISCELLANEOUS PROVISIONS

 

Section 15.01.   Provisions Binding on Company’s Successors. All the covenants, stipulations, promises and agreements of the Company contained in this Indenture shall bind its successors and assigns whether so expressed or not.

 

Section 15.02.   Official Acts by Successor Corporation. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation that shall at the time be the lawful sole successor of the Company.

 

Section 15.03.   Addresses for Notices, Etc.  Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Noteholders on the Company shall be deemed to have been sufficiently given or made, for all purposes if given or served by being deposited postage prepaid by registered or certified mail in a post office letter box addressed (until another address is filed by the Company with the Trustee) to SanDisk Corporation, 951 SanDisk Drive, Milpitas, California 95035, Attention: Chief Legal Officer.  Any notice, direction, request or demand hereunder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or served by being deposited postage prepaid by registered or certified mail in a post office letter box addressed to the Corporate Trust Office.

 

The Trustee, by notice to the Company, may designate additional or different addresses for subsequent notices or communications.

 

Any notice or communication mailed to a Noteholder shall be mailed to him by first class mail, postage prepaid, at his address as it appears on the Note Register and shall be sufficiently given to him if so mailed within the time prescribed.

 

Failure to mail a notice or communication to a Noteholder or any defect in it shall not affect its sufficiency with respect to other Noteholders.  If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

 

The Trustee agrees to accept and act upon instructions or directions pursuant to this Indenture sent by unsecured e-mail, pdf, facsimile transmission or other similar unsecured electronic methods; provided, however, that (a) the party providing such written instructions,

 

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subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (b) such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions.  If the party elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee’s understanding of such instructions shall be deemed controlling.  The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction.  The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk or interception and misuse by third parties.

 

Section 15.04.   Governing Law.  THIS INDENTURE AND EACH NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

Section 15.05.   Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee. Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, and an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

 

Each certificate or opinion provided for by or on behalf of the Company in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in such certificate or opinion is based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with.

 

Section 15.06.   Legal Holidays. In any case where any Interest Payment Date, Designated Event Repurchase Date, Conversion Date or Maturity Date will not be a Business Day, then any action to be taken on such date need not be taken on such date, but may be taken on the next succeeding Business Day with the same force and effect as if taken on such date, and no interest shall accrue for the period from and after such date to the next succeeding Business Day.

 

Section 15.07.   No Security Interest Created. Nothing in this Indenture or in the Notes, expressed or implied, shall be construed to constitute a security interest under the Uniform

 

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Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.

 

Section 15.08.   Benefits of Indenture. Nothing in this Indenture or in the Notes, expressed or implied, shall give to any person, other than the parties hereto, any Paying Agent, any authenticating agent, any Note Registrar and their successors hereunder, the Noteholders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 15.09.   Table of Contents, Headings, Etc. The table of contents and the titles and headings of the articles and sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

 

Section 15.10.   Authenticating Agent. The Trustee may appoint an authenticating agent which shall be authorized to act on its behalf and subject to its direction in the authentication and delivery of Notes in connection with the original issuance thereof and transfers and exchanges of Notes hereunder, including under Section 2.05, Section 2.06, Section 2.07 and Section 2.08, as fully to all intents and purposes as though the authenticating agent had been expressly authorized by this Indenture and those Sections to authenticate and deliver Notes.  For all purposes of this Indenture, the authentication and delivery of Notes by the authenticating agent shall be deemed to be authentication and delivery of such Notes “by the Trustee” and a certificate of authentication executed on behalf of the Trustee by an authenticating agent shall be deemed to satisfy any requirement hereunder or in the Notes for the Trustee’s certificate of authentication.  Such authenticating agent shall at all times be a person eligible to serve as trustee hereunder pursuant to Section 6.09.

 

Any corporation into which any authenticating agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, consolidation or conversion to which any authenticating agent shall be a party, or any corporation succeeding to the corporate trust business of any authenticating agent, shall be the successor of the authenticating agent hereunder, if such successor corporation is otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the parties hereto or the authenticating agent or such successor corporation.

 

Any authenticating agent may at any time resign by giving written notice of resignation to the Trustee and to the Company.  The Trustee may at any time terminate the agency of any authenticating agent by giving written notice of termination to such authenticating agent and to the Company.  Upon receiving such a notice of resignation or upon such a termination, or in case at any time any authenticating agent shall cease to be eligible under this Section, the Trustee shall promptly appoint a successor authenticating agent (which may be the Trustee), shall give written notice of such appointment to the Company and shall mail notice of such appointment to all Noteholders as the names and addresses of such holders appear on the Note Register.

 

The Company agrees to pay to the authenticating agent from time to time reasonable compensation for its services although the Company may terminate the authenticating agent, if it determines such agent’s fees to be unreasonable.

 

75

 

The provisions of Section 6.02, Section 6.03, Section 6.04, Section 7.03 and this Section 15.11 shall be applicable to any authenticating agent.

 

Section 15.11.   Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

 

Section 15.12.   Waiver of Jury Trial.  EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

 

Section 15.13.   Force Majeure.  In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

Section 15.14.   Calculations in Respect of the Notes.  Except as otherwise provided in this Indenture, the Company shall be responsible for making all calculations called for under this Indenture and the Notes. These calculations include, but are not limited to, determinations of the Last Reported Sale Prices of the Common Stock, accrued interest payable on the Notes and the Conversion Rate of the Notes. The Company shall make all these calculations in good faith and, absent manifest error, its calculations shall be final and binding on Noteholders. The Company shall provide a schedule of its calculations to each of the Trustee and the Conversion Agent, and each of the Trustee and Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The Trustee shall forward the Company’s calculations to any Noteholder upon the request of that Noteholder.

 

76

 

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

 

	
 
    	
SANDISK   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Judy Bruner
    
	
 
    	
Name:
    	
Judy   Bruner
    
	
 
    	
Title:
    	
Executive   Vice President, Administration and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
THE   BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
    
	
 
    	
as   Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Lawrence Dillard
    
	
 
    	
Name:
    	
Lawrence   Dillard
    
	
 
    	
Title:
    	
Vice   President
    

 

77

 

SCHEDULE A

 

Stock Price

 

	
Effective Date
    	
 
    	
Stock Price
    	
 
    
	
 
    	
 
    	
$68.29
    	
 
    	
$75.00
    	
 
    	
$80.00
    	
 
    	
$85.00
    	
 
    	
$92.19
    	
 
    	
$100.00
    	
 
    	
$110.00
    	
 
    	
$120.00
    	
 
    	
$135.00
    	
 
    	
$150.00
    	
 
    	
$200.00
    	
 
    	
$300.00
    	
 
    
	
October 29, 2013
    	
 
    	
3.7964
    	
 
    	
3.1627
    	
 
    	
2.7132
    	
 
    	
2.3343
    	
 
    	
1.8873
    	
 
    	
1.5030
    	
 
    	
1.1250
    	
 
    	
0.8404
    	
 
    	
0.5355
    	
 
    	
0.3304
    	
 
    	
0.0278
    	
 
    	
0.0000
    	
 
    
	
October 15, 2014
    	
 
    	
3.7964
    	
 
    	
3.0856
    	
 
    	
2.6335
    	
 
    	
2.2536
    	
 
    	
1.8072
    	
 
    	
1.4259
    	
 
    	
1.0534
    	
 
    	
0.7755
    	
 
    	
0.4815
    	
 
    	
0.2871
    	
 
    	
0.0155
    	
 
    	
0.0000
    	
 
    
	
October 15, 2015
    	
 
    	
3.7964
    	
 
    	
2.9969
    	
 
    	
2.5403
    	
 
    	
2.1583
    	
 
    	
1.7120
    	
 
    	
1.3337
    	
 
    	
0.9677
    	
 
    	
0.6980
    	
 
    	
0.4174
    	
 
    	
0.2363
    	
 
    	
0.0038
    	
 
    	
0.0000
    	
 
    
	
October 15, 2016
    	
 
    	
3.7964
    	
 
    	
2.9227
    	
 
    	
2.4565
    	
 
    	
2.0684
    	
 
    	
1.6183
    	
 
    	
1.2404
    	
 
    	
0.8795
    	
 
    	
0.6178
    	
 
    	
0.3515
    	
 
    	
0.1852
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    
	
October 15, 2017
    	
 
    	
3.7964
    	
 
    	
2.8745
    	
 
    	
2.3894
    	
 
    	
1.9885
    	
 
    	
1.5279
    	
 
    	
1.1462
    	
 
    	
0.7883
    	
 
    	
0.5346
    	
 
    	
0.2843
    	
 
    	
0.1349
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    
	
October 15, 2018
    	
 
    	
3.7964
    	
 
    	
2.8239
    	
 
    	
2.3074
    	
 
    	
1.8849
    	
 
    	
1.4067
    	
 
    	
1.0194
    	
 
    	
0.6674
    	
 
    	
0.4280
    	
 
    	
0.2051
    	
 
    	
0.0826
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    
	
October 15, 2019
    	
 
    	
3.7964
    	
 
    	
2.6753
    	
 
    	
2.1028
    	
 
    	
1.6432
    	
 
    	
1.1394
    	
 
    	
0.7517
    	
 
    	
0.4254
    	
 
    	
0.2261
    	
 
    	
0.0686
    	
 
    	
0.0066
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    
	
October 15, 2020
    	
 
    	
3.7964
    	
 
    	
2.4863
    	
 
    	
1.6530
    	
 
    	
0.9177
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    	
0.0000
    	
 
    

 

 

EXHIBIT A

 

[FORM OF FACE OF NOTE]

 

[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.]

 

[THE SALE OF THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED BELOW), THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE (AND ANY BENEFICIAL INTEREST HEREIN OR THEREIN) MAY NOT BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED, EXCEPT:

 

(A)                         TO THE COMPANY OR ANY SUBSIDIARY THEREOF;

(B)                         PURSUANT TO A REGISTRATION STATEMENT THAT HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT;

(C)                         TO A PERSON THAT YOU REASONABLY BELIEVE TO BE A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT; OR

(D)                         UNDER ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (INCLUDING, IF AVAILABLE, THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT).

 

THE “RESALE RESTRICTION TERMINATION DATE” MEANS THE DATE: (1) THAT IS AT LEAST ONE YEAR AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THE NOTES; AND (2) ON WHICH THE COMPANY HAS INSTRUCTED THE TRUSTEE THAT THIS LEGEND WILL NO LONGER APPLY IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE.

 

PRIOR TO ANY TRANSFER PURSUANT TO THE FOREGOING CLAUSE (D), THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE AND MAY RELY UPON TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A

 

A-1

 

TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.]

 

A-2

 

SANDISK CORPORATION
 0.50% Convertible Senior Notes due 2020

 

	
No.
    	
 
    	
$
    

 

CUSIP No. 80004C AE1

 

SanDisk Corporation, a corporation duly organized and validly existing under the laws of the State of Delaware (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                        Dollars or such other principal amount as shall be set forth on the Schedule I hereto on October 15, 2020.

 

This Note shall bear interest at the rate of 0.50% per year from October 29, 2013, or from the most recent date to which interest had been paid or provided.  Interest is payable semi-annually in arrears on each April 15 and October 15, commencing April 15, 2014, to holders of record at the close of business on the preceding April 1 and October 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 October 29, 2013 if no interest has been paid hereon) to but excluding such Interest Payment Date.  Additional Interest will be payable at the option of the Company on the terms set forth in Section 5.10, Section 4.03(d) or Section 4.03(e) of the Indenture, and any reference to interest on, or in respect of, any Note therein shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to such Section 5.10, Section 4.03(d) or Section 4.03(e) and any express mention of the payment of Additional Interest in any provision therein shall not be construed as excluding Additional Interest in those provisions thereof where such express mention is not made.

 

Payment of the principal of and interest accrued on this Note shall be made at the office or agency off the Company maintained for that purpose in the Borough of Manhattan, The City of New York, or, at the option of the holder of this Note, at the Corporate Trust Office, in such lawful money of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts; provided, however, interest may be paid by check mailed to such holder’s address as it appears in the Note Register; provided, further, however, that, with respect to any Noteholder with an aggregate principal amount in excess of $1,000,000, at the application of such holder in writing to the Company, interest on such holder’s Notes shall be paid by wire transfer in immediately available funds to such holder’s account in the United States supplied by such holder from time to time to the Trustee and Paying Agent (if different from the Trustee) not later than the applicable regular record date; provided that any payment to the Depositary or its nominee shall be paid by wire transfer in immediately available funds in accordance with the wire transfer instruction supplied by the Depositary or its nominee from time to time to the Trustee and Paying Agent (if different from Trustee).

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, including, without limitation, provisions giving the holder of this Note the right to convert this Note into cash and Common Stock, if any, of the Company on the terms and subject to the

 

A-3

 

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.

 

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-4

 

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

 

	
 
    	
SANDISK   CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

A-5

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION
 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
 as Trustee, certifies that this is one of the Notes described
 in the within-named Indenture.

 

 

	
By:
    	
 
    	
 
    
	
 
    	
Authorized Signatory
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    
				

 

A-6

 

[FORM OF REVERSE OF NOTE]

 

SANDISK CORPORATION
 0.50% Convertible Senior Notes due 2020

 

This Note is one of a duly authorized issue of Notes of the Company, designated as its 0.50% Convertible Senior Notes due 2020 (herein called the “Notes”), issued under and pursuant to an Indenture dated as of October 29, 2013 (herein called the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A. (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.

 

In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of, and accrued and unpaid interest 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 Designated Event Repurchase 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 aggregate 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 9.02 of the 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 aggregate 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 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 deliver the consideration due upon

 

A-7

 

conversion of, 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 $2,000 principal amount and integral multiples of $1,000 in excess 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 or exchange of Notes, Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations.

 

The Notes are not subject to redemption or the operation of any sinking fund.

 

Upon the occurrence of a Designated Event, 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; provided that the remaining principal amount of any note so converted is $2,000 or an integral multiple of $1,000 in excess thereof) on the Designated Event 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 to but excluding the Designated Event Repurchase Date.  The Company or, at the written request of the Company, the Trustee shall mail to all holders of record of the Notes a notice of the occurrence of a Designated Event and of the repurchase right arising as a result thereof on or before the 20th day after the occurrence of any Designated Event.

 

Subject to the provisions of the Indenture, the holder hereof has the right, at its option, on and after July 15, 2020, or earlier upon the occurrence of certain conditions specified in the Indenture and prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date, to convert any Notes or portion thereof which is $1,000 or an integral multiple of $1,000 in excess thereof, into cash and, if applicable, shares of Common Stock, in each case at the Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture, upon surrender of this Note, together with a Notice of Conversion, a form of which is attached to the Note, as provided in the Indenture and this Note, to the Company at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, or at the option of such holder, the Corporate Trust Office, and, unless the shares issuable on conversion are to be issued in the same name as this Note, duly endorsed by, or accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the holder or by his duly authorized attorney.  The initial Conversion Rate shall be 10.8470 shares for each $1,000 principal amount of Notes.  No fractional shares of Common Stock will be issued upon any conversion, but cash will be paid to the holder, as provided in the Indenture, in respect of any fraction of a share which would otherwise be issuable upon the surrender of any Note or Notes for conversion.  No adjustment shall be made for dividends or any shares issued upon conversion of such Note except as provided in the Indenture.

 

Upon due presentment for registration of transfer of this Note at the office or agency of the Company in the Borough of Manhattan, The City of New York, a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the 

 

A-8

 

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 therewith.

 

The Company, the Trustee, any authenticating agent, any Paying Agent, any Conversion Agent and any Note 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 nor the Trustee nor any other authenticating agent nor any Paying Agent nor any other Conversion Agent nor any Note 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.

 

No recourse for the payment of the principal of, or accrued and unpaid interest on, this Note, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any indenture supplemental thereto or in any Note, or because of the creation of any Indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, officer, director or subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.

 

Terms used in this Note and defined in the Indenture are used herein as therein defined.

 

Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TENANT (=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

 

[FORM OF CONVERSION NOTICE]

 

To: SANDISK CORPORATION

 

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 of $1,000 in excess thereof; provided that any remaining portion thereof not so converted shall be $2,000 principal amount or an integral multiple of $1,000 in excess thereof) below designated, into cash and shares of Common Stock, if any, in accordance with the terms of the Indenture referred to in this Note, and directs that the cash and shares, if any, issuable and deliverable upon such conversion, together with 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 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 are to be issued, or Notes
 to be delivered, other than to and in the name of the 
 registered holder.

 

A-10

 

Fill in for registration of shares 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:
    

 

A-11

 

[FORM OF DESIGNATED EVENT REPURCHASE NOTICE]

 

To:  SanDisk Corporation

 

The undersigned registered owner of this Note hereby acknowledges receipt of a notice from SanDisk Corporation (the “Company”) as to the occurrence of a Designated Event 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 of $1,000 in excess thereof; provided that any remaining portion thereof not so designated shall be $2,000 principal amount or an integral multiple of $1,000 in excess 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.
    

 

A-12

 

Schedule l

 

SANDISK CORPORATION
 0.50% Convertible Senior Notes due 2020

 

No.

 

	
Date
    	
 
    	
Principal Amount
    	
 
    	
Notation Explaining
   Principal Amount
   Recorded
    	
 
    	
Authorized
   Signature of Trustee
   or Custodian
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

[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.

 

In connection with any transfer of the within Note occurring prior to the Resale Restriction Termination Date, as defined in the Indenture governing such Note, the undersigned confirms that such Note is being transferred:

 

o                                    To the Company or a subsidiary thereof; or

 

o                                    Pursuant to a registration statement that has become or been declared effective under the Securities Act of 1933, as amended; or

 

o                                    To a Person that the undersigned reasonably believes to be a qualified institutional buyer in compliance with Rule 144A under the Securities Act of 1933, as amended; or

 

o                                    Pursuant to and in compliance with Rule 144 under the Securities Act of 1933, as amended, or any other available exemption from the registration requirements of the Securities Act of 1933, as amended.

 

 

	
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 Securities and Exchange Commission
 Rule 17Ad-15 if Notes are to be delivered, other
 than to and in the name of the registered holder.

 

NOTICE:  The signature on 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.

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