Document:

Exhibit 4.3

 

EXECUTION COPY

 

 

 

 

SECOND SUPPLEMENTAL INDENTURE

 

Dated as of July 17, 2013

 

between

 

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee

 

 

Supplement to the Amended and Restated Indenture between American Equity Investment Life Holding Company and U.S. Bank National Association, dated as of April 22, 2004, as amended by the First Supplemental Indenture, dated as of July 17, 2013, among American Equity Investment Life Holding Company, U.S. Bank National Association, and Wells Fargo Bank, National Association

 

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 1 DEFINITIONS AND INCORPORATION BY   REFERENCE
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.01.
    	
Definitions
    	
1
    
	
Section 1.02.
    	
Other   Definitions
    	
37
    
	
Section 1.03.
    	
Rules of   Construction
    	
38
    
	
Section 1.04.
    	
Incorporation   by Reference of Trust Indenture Act
    	
39
    
	
Section 1.05.
    	
Status   of Base Indenture
    	
39
    
	
 
    	
 
    	
 
    
	
ARTICLE 2 THE NOTES
    	
39
    
	
 
    	
 
    	
 
    
	
Section 2.01.
    	
Designation,   Principal Amount and Issuance
    	
39
    
	
Section 2.02.
    	
Form,   Payment and Appointment
    	
40
    
	
Section 2.03.
    	
Security   Registrar and Paying Agent
    	
40
    
	
Section 2.04.
    	
Paying   Agent to Hold Money in Trust
    	
40
    
	
Section 2.05.
    	
Outstanding   Notes
    	
41
    
	
Section 2.06.
    	
Treasury   Notes
    	
41
    
	
 
    	
 
    	
 
    
	
ARTICLE 3 REDEMPTION
    	
42
    
	
 
    	
 
    	
 
    
	
Section 3.01.
    	
Notice   of Redemption
    	
42
    
	
Section 3.02.
    	
Deposit   of Redemption or Purchase Price
    	
42
    
	
Section 3.03.
    	
Optional   Redemption
    	
43
    
	
Section 3.04.
    	
Mandatory   Redemption
    	
44
    
	
Section 3.05.
    	
Offers   to Repurchase by Application of Excess Proceeds
    	
44
    
	
 
    	
 
    	
 
    
	
ARTICLE 4 COVENANTS
    	
46
    
	
 
    	
 
    	
 
    
	
Section 4.01.
    	
Payment   of Principal, Premium and Interest
    	
46
    
	
Section 4.02.
    	
Maintenance   of Office or Agency
    	
46
    
	
Section 4.03.
    	
Statement   by Officers as to Default
    	
46
    
	
Section 4.04.
    	
Stay,   Extension and Usury Laws
    	
47
    
	
Section 4.05.
    	
Reports   and Other Information
    	
47
    
	
Section 4.06.
    	
Limitation   on Restricted Payments
    	
48
    
	
Section 4.07.
    	
Limitation   on Restrictions on Distribution From Restricted Subsidiaries
    	
54
    
	
Section 4.08.
    	
Limitation   on Indebtedness
    	
57
    
	
Section 4.09.
    	
Asset   Dispositions
    	
62
    
	
Section 4.10.
    	
Transactions   with Affiliates
    	
64
    
	
Section 4.11.
    	
Limitation   on Liens
    	
66
    
	
Section 4.12.
    	
Offer   to Repurchase Upon Change of Control
    	
67
    
	
Section 4.13.
    	
Future   Subsidiary Guarantors
    	
69
    
	
Section 4.14.
    	
Effectiveness   of Covenants
    	
69
    
	
Section 4.15.
    	
Applicability   of Covenants Contained in the Base Indenture
    	
70
    
	
 
    	
 
    	
 
    
	
ARTICLE 5 SUCCESSORS
    	
70
    
	
 
    	
 
    	
 
    
	
Section 5.01.
    	
Merger,   Consolidation or Sale of All or Substantially All Assets
    	
71
    
	
Section 5.02.
    	
Successor   Entity Substituted
    	
72
    

 

i

 

	
ARTICLE 6 DEFAULTS AND REMEDIES
    	
72
    
	
 
    	
 
    	
 
    
	
Section 6.01.
    	
Events   of Default
    	
73
    
	
Section 6.02.
    	
Acceleration
    	
75
    
	
Section 6.03.
    	
[Reserved]
    	
76
    
	
Section 6.04.
    	
Limitation   on Suits
    	
76
    
	
Section 6.05.
    	
[Reserved]
    	
76
    
	
Section 6.06.
    	
Control   by Noteholders
    	
76
    
	
 
    	
 
    	
 
    
	
ARTICLE 7 [RESERVED]
    	
76
    
	
 
    	
 
    	
 
    
	
ARTICLE 8 CONCERNING THE HOLDERS
    	
77
    
	
 
    	
 
    	
 
    
	
Section 8.01.
    	
Evidence   of Action by Holders
    	
77
    
	
 
    	
 
    	
 
    
	
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER
    	
78
    
	
 
    	
 
    	
 
    
	
Section 9.01.
    	
Without   Consent of Holders
    	
78
    
	
Section 9.02.
    	
With   Consent of Holders
    	
79
    
	
Section 9.03.
    	
Compliance   with Trust Indenture Act
    	
81
    
	
Section 9.04.
    	
Revocation   and Effect of Consents
    	
81
    
	
Section 9.05.
    	
Notation   on or Exchange of Notes
    	
82
    
	
Section 9.06.
    	
Trustee   to Sign Amendments, etc.
    	
82
    
	
Section 9.07.
    	
Payment   for Consent
    	
82
    
	
 
    	
 
    	
 
    
	
ARTICLE 10 GUARANTEES
    	
82
    
	
 
    	
 
    	
 
    
	
Section 10.01.
    	
Guarantee
    	
82
    
	
Section 10.02.
    	
Limitation   on Subsidiary Guarantor Liability
    	
84
    
	
Section 10.03.
    	
Execution   and Delivery
    	
84
    
	
Section 10.04.
    	
Subrogation
    	
85
    
	
Section 10.05.
    	
Benefits   Acknowledged
    	
85
    
	
Section 10.06.
    	
Release   of Subsidiary Guarantees
    	
85
    
	
Section 10.07.
    	
Further   Assurances
    	
86
    
	
 
    	
 
    	
 
    
	
ARTICLE 11 SATISFACTION AND DISCHARGE
    	
86
    
	
 
    	
 
    	
 
    
	
Section 11.01.
    	
Satisfaction   and Discharge of Indenture
    	
86
    
	
Section 11.02.
    	
 
    	
86
    
	
 
    	
 
    	
 
    
	
ARTICLE 12   IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
    	
87
    
	
 
    	
 
    	
 
    
	
ARTICLE 13 LEGAL DEFEASANCE AND COVENANT   DEFEASANCE
    	
87
    
	
 
    	
 
    	
 
    
	
Section 13.01.
    	
Company’s   Option to Effect Legal Defeasance or Covenant Defeasance
    	
87
    
	
Section 13.02.
    	
Legal   Defeasance
    	
87
    
	
Section 13.03.
    	
Covenant   Defeasance
    	
87
    
	
Section 13.04.
    	
Conditions   to Legal or Covenant Defeasance
    	
88
    

 

ii

 

	
ARTICLE 14 MISCELLANEOUS
    	
90
    
	
 
    	
 
    	
 
    
	
Section 14.03.
    	
Notices
    	
90
    
	
Section 14.11.
    	
Communication   by Holders with Other Holders
    	
91
    
	
Section 14.12.
    	
Rules by   Trustee and Agents
    	
92
    
	
Section 14.13.
    	
Governing   Law
    	
92
    
	
Section 14.14.
    	
Waiver   of Jury Trial
    	
92
    
	
Section 14.15.
    	
Force   Majeure
    	
92
    
	
Section 14.16.
    	
No   Adverse Interpretation of Other Agreements
    	
92
    
	
Section 14.17.
    	
Successors
    	
92
    
	
Section 14.18.
    	
Severability
    	
92
    
	
Section 14.19.
    	
Table   of Contents, Headings, etc.
    	
93
    
	
Section 14.20.
    	
Facsimile   and PDF Delivery of Signature Pages
    	
93
    
	
Section 14.21.
    	
U.S.A.   PATRIOT Act
    	
93
    
	
Section 14.22.
    	
The   Trustee
    	
93
    
	
 
    	
 
    	
 
    
	
Appendix   A
    	
Provisions   Relating to Initial Notes and Additional Notes
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
Form of   Note
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibit B
    	
Form of   Supplemental Indenture to Be Delivered by Subsequent Subsidiary Guarantors
    	
 
    

 

iii

 

SECOND SUPPLEMENTAL INDENTURE, dated as of July 17, 2013 (this “Second Supplemental Indenture”), between AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY, an Iowa corporation (the “Company”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as trustee (the “Trustee”), under the Amended and Restated Indenture, dated as of April 22, 2004, between the Company and U.S. Bank National Association (the “Base Indenture” and, as supplemented by the First Supplemental Indenture, dated as of July 17, 2013, among the Company, U.S. Bank National Association, and the Trustee, and as further supplemented by this Second Supplemental Indenture, the “Indenture”).

 

W I T N E S S E T H

 

WHEREAS, the Company has duly authorized the execution and delivery of the Base Indenture (as amended, supplemented, waived or otherwise modified), to provide for the issuance from time to time of its unsecured debt securities, debentures, notes, bonds or other evidence of indebtedness to be issued in one or more series (the “Securities”), as provided in the Base Indenture, up to such principal amount or amounts as may from time to time be authorized in or pursuant to one or more resolutions of the Board of Directors;

 

WHEREAS, pursuant to the terms of the Base Indenture, the Company desires to provide for the establishment of a new series of its Securities to be known as its 6.625% Senior Notes due 2021 (the “Initial Notes”), the form of such Securities and the terms, provisions and conditions thereof to be set forth as provided in this Second Supplemental Indenture;

 

WHEREAS, the Company has requested that the Trustee execute and deliver this Second Supplemental Indenture;

 

WHEREAS, all requirements necessary to make this Second Supplemental Indenture a legal, valid, binding and enforceable instrument in accordance with its terms, and to make the Notes, when executed, authenticated and delivered by the Company, the legal, valid, binding and enforceable obligations of the Company, have been done and performed; and

 

WHEREAS, the execution and delivery of this Second Supplemental Indenture has been duly authorized in all respects.

 

NOW THEREFORE, in consideration of the purchase and acceptance of the Notes by the Holders thereof, and for the purpose of setting forth, as provided in the Base Indenture, the form and terms of the Notes, the Company covenants and agrees with the Trustee as follows, solely for purposes of the Notes and not for purposes of any other Securities:

 

ARTICLE 1

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.   Definitions.  Unless the context otherwise requires (including for purposes of the Recitals):

 

(a)           a term defined in the Base Indenture has the same meaning when used in this Second Supplemental Indenture unless otherwise specified herein;

 

(b)           a term defined anywhere in this Second Supplemental Indenture has the same meaning throughout;

 

 

(c)           the definition of any term in this Second Supplemental Indenture that is also defined in the Base Indenture shall for the purposes of this Second Supplemental Indenture supersede the definition of such term in the Base Indenture;

 

(d)           the definition of a term in this Second Supplemental Indenture is not intended to have any effect on the meaning or definition of an identical term that is defined in the Base Indenture insofar as the use or effect of such term in the Base Indenture, as previously defined, is concerned;

 

(e)           references to section or subsection numbers in this Second Supplemental Indenture are references to the applicable section of this Second Supplemental Indenture unless otherwise specified; and

 

(f)            the following terms have the meanings given to them in this Section 1.01(f), solely for purposes of the Notes and not for purposes of any other Securities:

 

“2010 Warrants” means each of the warrant transaction confirmation letter agreements, dated September 16, 2010 and September 17, 2010, between the Company and one or more financial institutions, and any additional warrant transaction confirmation letter agreements entered into by the Company in connection with the Convertible 2010 Debt.

 

“Acquired Indebtedness” means, with respect to any Person, (A) Indebtedness (1) of a Person or any of its Subsidiaries existing at the time such Person is merged or consolidated with the Company or a Restricted Subsidiary or becomes a Restricted Subsidiary or (2) assumed in connection with the acquisition of assets from such Person, in each case whether or not Incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary or such acquisition, and (B) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. Acquired Indebtedness shall be deemed to have been Incurred, with respect to clause (A)(1) of the preceding sentence, on the date such Person is merged or consolidated with the Company or a Restricted Subsidiary or becomes a Restricted Subsidiary and, with respect to clause (A)(2) of the preceding sentence, on the date of consummation of such acquisition of assets.

 

“Additional Notes” means additional Notes (other than the Initial Notes) issued from time to time under this Indenture in accordance with Section 2.01 and Section 4.08.

 

“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 Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Agent” means any Security Registrar or Paying Agent.

 

“Aggregate RBC Ratio” means, with respect to the Insurance Subsidiaries taken as a whole, on any date of determination, one-half of the ratio (expressed as a percentage) of (a) the aggregate “Total Adjusted Capital” (as defined by the applicable Insurance Regulatory Authority) for each such Insurance Subsidiary to (b) the aggregate “Authorized Control Level Risk-Based Capital” (as defined by the applicable Insurance Regulatory Authority) for each such Insurance Subsidiary.

 

“Annual Statement” means the annual statutory financial statement of any Insurance Subsidiary required to be filed with the insurance commissioner (or similar authority) of its jurisdiction of incorporation, which statement shall be in the form required by such Insurance Subsidiary’s jurisdiction

 

2

 

of incorporation or, if no specific form is so required, in the form of financial statements permitted by such insurance commissioner (or such similar authority) to be used for filing annual statutory financial statements and shall contain the type of information permitted or required by such insurance commissioner (or such similar authority) to be disclosed therein, together with all exhibits or schedules filed therewith.

 

“Applicable Premium” means, as determined by the Company with respect to a Note on any date of redemption, the greater of:

 

(1)           1.0% of the principal amount of such Note; and

 

(2)           the excess, if any, of (a) the present value as of such date of redemption of (i) the redemption price of such Note on July 15, 2017 (such redemption price being set forth under Section 3.03(d)), plus (ii) the remaining scheduled interest payments due on such Note through July 15, 2017 (excluding accrued but unpaid interest to the date of redemption), computed using a discount rate equal to the Treasury Rate as of such date of redemption plus 50 basis points, over (b) the then outstanding principal amount of such Note.

 

“Asset Acquisition” means (1) an Investment by the Company or any Restricted Subsidiary in any other Person pursuant to which such Person shall become a Restricted Subsidiary or shall be consolidated or merged with the Company or any Restricted Subsidiary or (2) the acquisition by the Company or any Restricted Subsidiary of assets of any Person.

 

“Asset Disposition” means:

 

(1)                              any sale, lease (other than an operating lease entered into in the ordinary course of business), transfer or other disposition, or a series of related sales, leases, transfers or dispositions that are part of a common plan, including any transaction pursuant to a Reinsurance Agreement, of property or other assets (it being understood that the Capital Stock of the Company is not an asset of the Company) (each referred to for the purposes of this definition as a “disposition”) by the Company or any of the Restricted Subsidiaries, including any disposition by means of a merger, consolidation or similar transaction; and

 

(2)           any issuance or disposition, or a series of related issuances or dispositions that are part of a common plan, of shares of Capital Stock of a Restricted Subsidiary, including any transaction pursuant to a Reinsurance Agreement (other than directors’ qualifying shares or local ownership shares).

 

Notwithstanding the preceding, the following items shall not be deemed to be Asset Dispositions:

 

(1)           a disposition of assets by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary;

 

(2)           the disposition of Cash Equivalents in the ordinary course of business or the unwinding or termination of any Hedging Obligations or Swap Contracts;

 

(3)           a disposition of equipment, inventory, accounts receivable and other assets in the ordinary course of business;

 

3

 

(4)           a disposition of used, obsolete, worn out, damaged or surplus equipment or equipment or assets that are no longer used or useful in the conduct of the business of the Company and the Restricted Subsidiaries and that is disposed of in each case in the ordinary course of business;

 

(5)           the disposition of all or substantially all of the assets of the Company in a manner permitted pursuant to Section 5.01 or any disposition that constitutes a Change of Control pursuant to this Indenture;

 

(6)           an issuance of Capital Stock by a Restricted Subsidiary to the Company or to a Restricted Subsidiary;

 

(7)           for purposes of Section 4.09 only, the making of a Permitted Investment or a disposition subject to Section 4.06;

 

(8)           dispositions of Capital Stock of a Restricted Subsidiary or property or other assets in a single transaction or a series of related transactions with an aggregate Fair Market Value of less than $10.0 million;

 

(9)           the creation of a Permitted Lien and dispositions in connection with Permitted Liens;

 

(10)         dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;

 

(11)         the licensing or sublicensing of patents, trade secrets, know-how and other intellectual property, knowhow or other general intangibles and licenses, leases or subleases of other property which do not materially interfere with the business of the Company and the Restricted Subsidiaries as operated immediately prior to the granting of such license, sublicense, lease or sublease;

 

(12)         to the extent allowable under Section 1031 of the Code, any exchange of like property for use in a Related Business;

 

(13)         foreclosure, condemnation, casualty or any similar action with respect to property or other assets;

 

(14)         sales of assets received by the Company or any of the Restricted Subsidiaries upon the foreclosure on a Lien;

 

(15)         any sale of Capital Stock, Indebtedness or other securities of an Unrestricted Subsidiary;

 

(16)         a Sale/Leaseback Transaction that is made for cash consideration in an amount not less than the cost of the underlying fixed or capital asset and is consummated within 180 days after the Company or any Restricted Subsidiary acquires or completes the acquisition of such fixed or capital asset;

 

(17)         the receipt by the Company or any Restricted Subsidiary of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of their respective property or assets;

 

4

 

 

(18)         operating leases in the ordinary course of business;

 

(19)         the surrender or waiver of contract rights or litigation rights or the settlement, release or surrender of tort or other litigation claims of any kind;

 

(20)         the transfer of improvements, additions or alterations in connection with the lease of any property;

 

(21)         dispositions of Investments by any Insurance Subsidiary (other than any of its Investments in Subsidiaries engaged in insurance lines of business) and dispositions by the Company of Investments described in clause (18) or (19) of the definition of “Permitted Investments,” in each case, in the ordinary course of business consistent with past practices of the Company and its Subsidiaries taken as a whole and the investment policy approved by the Board of Directors of such Insurance Subsidiary or the Company, as the case may be;

 

(22)         dispositions by Insurance Subsidiaries and Special Purpose Subsidiaries pursuant to Reinsurance Agreements and Statutory Reserve Financings so long as such disposition is entered into in the ordinary course of business for the purpose of managing insurance risk consistent with industry practice; and

 

(23)         dispositions of Investments made out of the cash proceeds received from any Insurance Subsidiary pending further distribution in accordance with Section 4.06.

 

“Attributable Indebtedness” in respect of a Sale/Leaseback Transaction means, as at the time of determination, (1) if such Sale/Leaseback Transaction does not constitute a Capitalized Lease Obligation, the present value (discounted at the interest rate implicit in the transaction) of the total obligations of the lessee for net rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended), determined in accordance with GAAP or (2) if such Sale/Leaseback Transaction constitutes a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capitalized Lease Obligations.”

 

“Average Life” means, as of the date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by dividing (1) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Preferred Stock multiplied by the amount of such payment by (2) the sum of all such payments.

 

“Bankruptcy Law” means Title 11, U.S. Code, as amended, or any similar federal, state or foreign law for the relief of debtors.

 

“Base Indenture” shall have the meaning set forth in the recitals hereto.

 

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially Owns” and “Beneficially Owned” shall have a corresponding meaning.

 

5

 

“Board of Directors” means:

 

(1)           with respect to a corporation, the Board of Directors of the corporation or any committee thereof duly authorized to act on behalf of the Board of Directors with respect to the relevant matter;

 

(2)           with respect to a partnership, the Board of Directors of the general partner of the partnership; and

 

(3)           with respect to any other Person, the board or committee of such Person serving a similar function.

 

“Business Day” means each day that is not a Saturday, Sunday or other day on which commercial banking institutions in New York, New York or the offices of the Trustee are authorized or required by law, regulation or executive order to close.

 

“Capital and Surplus” means, as to any Insurance Subsidiary, as of any date, total assets minus total liabilities of such Insurance Subsidiary, as at the end of the most recently ended fiscal quarter of such Insurance Subsidiary for which financial statements are available, determined in accordance with SAP.

 

“Capital Stock” of any Person means (1) with respect to any Person that is a corporation, any and all shares, interests, rights to purchase, warrants, options (including any Permitted Bond Hedge), participations or other equivalents of or interests in (however designated) equity of such Person, including any Common Stock or Preferred Stock, and (2) with respect to any Person that is not a corporation, any and all partnership, limited liability company, membership or other equity interests of such Person, but in each case excluding any debt securities convertible into any of the foregoing.

 

“Capitalized Expenditures” means, for any period, (a) the additions to property, plant and equipment capitalized in accordance with GAAP and other capital expenditures of the Company and its Subsidiaries that are (or would be) set forth in a consolidated statement of cash flows of the Company and its Subsidiaries for such period prepared in accordance with GAAP and (b) any Capitalized Lease Obligations incurred by the Company and its Subsidiaries during such period.

 

“Capitalized Lease Obligation” means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation will be the capitalized amount of such obligation at the time any determination thereof is to be made as determined in accordance with GAAP, and the Stated Maturity thereof will be the date of the last payment of rent or any other amount due under such lease prior to the first date such lease may be terminated by the lessee without payment of a penalty.

 

“Cash Equivalents” means:

 

(1)           U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union, or in the case of any Foreign Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

 

(2)           securities issued or directly and fully guaranteed or insured by the United States Government or issued by any agency or instrumentality of the United States, having maturities of not more than one year from the date of acquisition;

 

6

 

(3)           marketable general obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition and, at the time of acquisition, having a credit rating of “A” or better from S&P or A2 or better from Moody’s;

 

(4)           certificates of deposit, demand deposits, time deposits, eurodollar time deposits, overnight bank deposits, money market deposits or bankers’ acceptances having maturities of not more than one year from the date of acquisition thereof issued by any bank or trust company (x) the long-term debt of which is rated at the time of acquisition thereof at least “A” or the equivalent thereof by a nationally recognized statistical rating organization or (y) the short-term commercial paper of such bank or trust company or their respective parent companies is rated at the time of acquisition thereof at least “A-1” or the equivalent thereof by S&P or “P-1” or the equivalent thereof by Moody’s, and having combined capital and surplus in excess of $100.0 million;

 

(5)           repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2), (3) and (4) above, entered into with any financial institution meeting the qualifications specified in clause (4) above;

 

(6)           commercial paper rated at the time of acquisition thereof at least “A-2” or the equivalent thereof by S&P or “P-2” or the equivalent thereof by Moody’s, or carrying an equivalent rating by a nationally recognized statistical rating organization, if both of the two named statistical rating organizations cease publishing ratings of investments, and in any case maturing within one year after the date of acquisition thereof;

 

(7)           instruments equivalent to those referred to in clauses (1) through (6) above denominated in euros or any foreign currency comparable in credit quality and tenor to those referred to in such clauses and customarily used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business conducted by any Restricted Subsidiary organized in such jurisdiction;

 

(8)           interests in any investment company or money market fund that invests 95% or more of its assets in instruments of the type specified in clauses (1) through (7) above and clause (10) below;

 

(9)           money market funds that (i) comply with the criteria set forth in Rule 2A-7 of the Investment Company Act of 1940, as amended, (ii) are rated at the time of acquisition thereof “AAA” or the equivalent by a nationally recognized statistical rating organization and (iii) have portfolio assets of at least $5.0 billion; and

 

(10)         securities with maturities of one year or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the requirements of clause (4) of this definition.

 

“CBOs” means notes or other instruments (other than CMOs) secured by collateral consisting primarily of debt securities and/or other types of debt obligations, including loans.

 

“Ceded Reinsurance” means risk that is ceded (whether by co-insurance, reinsurance or equivalent relationship otherwise named) by any Insurance Subsidiary to any other Person (other than to another Insurance Subsidiary).

 

7

 

“Change of Control” means:

 

(1)           any “person” or “group” of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the ultimate Beneficial Owner, directly or indirectly, of a majority of the total voting power of the Voting Stock of the Company (or its successors by merger, consolidation or purchase of all or substantially all of its assets);

 

(2)           the sale, assignment, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole to any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act);

 

(3)           the adoption by the stockholders of the Company of a plan or proposal for the liquidation or dissolution of the Company; or

 

(4)          the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors.

 

For purposes of this definition, any direct or indirect holding company of the Company shall not itself be considered a “person” or “group” for purposes of clause (1) above, provided that no “person” or “group” (other than another such holding company) Beneficially Owns, directly or indirectly, more than 50% of the voting power of the Voting Stock of such company, and a majority of the Voting Stock of such holding company immediately following it becoming the holding company of the Company is Beneficially Owned by the Persons who Beneficially Owned the voting power of the Voting Stock of the Company immediately prior to it becoming such holding company.

 

“CMOs” means Notes or other instruments secured by collateral consisting primarily of mortgages, mortgage-backed securities and/or other types of mortgage-related obligations.

 

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

 

“Common Stock” means with respect to any Person, any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or nonvoting) of such Person’s common stock whether or not outstanding on the Issue Date, and includes, without limitation, all series and classes of such common stock.

 

“Company” means the party named as such in the first paragraph of this Indenture or any successor obligor to its obligations under this Indenture and the Notes pursuant to Article 5.

 

“Company Order” means a written order signed in the name of the Company by an Officer of the Company.

 

“Consolidated Assets” means, as at any date of determination, the net book value of all assets of the Company and its Subsidiaries as of such date classified as assets in accordance with GAAP and determined on a consolidated basis.

 

“Consolidated EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period:

 

(1)           increased (without duplication) by the following items to the extent deducted in calculating such Consolidated Net Income:

 

8

 

(a)           Consolidated Interest Expense; plus

 

(b)           Consolidated Income Taxes; plus

 

(c)           consolidated depreciation expense; plus

 

(d)           consolidated amortization expense or impairment charges recorded in connection with the application of FASB ASC 350 and FASB ASC 360; plus

 

(e)           other non-cash charges reducing Consolidated Net Income, including any write-offs or write-downs (excluding any such non-cash charge to the extent it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash expense that was paid in a prior period not included in the calculation); plus

 

(f)            any fees, charges or other expenses made or Incurred in connection with any actual or proposed nonordinary course Investment, asset sale, acquisition, recapitalization or issuance of Capital Stock or Incurrence of Indebtedness or any amendment or modification of Indebtedness (including as a result of Statement of FASB ASC 805), including such fees, expenses or charges related to the Transactions; plus

 

(g)           the amount of any restructuring charges (including lease termination, severance and relocation expenses), integration costs or non-ordinary course reserves or other non-recurring or unusual charges or expenses deducted (and not added back) in such period in computing Consolidated Net Income;

 

(2)           decreased (without duplication) by non-cash items increasing Consolidated Net Income of such Person for such period (excluding any items which represent the recognition of deferred revenue, the reversal of any accrual of, or reserve for, anticipated cash charges that reduced Consolidated EBITDA in any prior period and any items for which cash was received in a prior period that did not increase Consolidated EBITDA in any prior period); and

 

(3)           increased or decreased (without duplication) to eliminate the following items to the extent reflected in Consolidated Net Income:

 

(a)           any non-ordinary course net gain or loss resulting in such period from Hedging Obligations and the application of FASB ASC 815;

 

(b)           all unrealized gains and losses relating to financial instruments or liabilities to which fair market value accounting is applied;

 

(c)           any net gain or loss resulting in such period from currency translation gains or losses related to currency remeasurements of Indebtedness (including any net loss or gain resulting from Hedging Obligations for currency exchange risk); and

 

(d)           effects of adjustments (including the effects of such adjustments pushed down to the Company and the Restricted Subsidiaries) in any line item in such Person’s consolidated financial statements pursuant to GAAP resulting from the application of purchase accounting in relation to any completed acquisition.

 

9

 

“Consolidated Income Taxes” means, for any period, taxes imposed upon the Company and the Restricted Subsidiaries or other payments required to be made by the Company and the Restricted Subsidiaries by any governmental authority which taxes or other payments are calculated by reference to the income or profits or capital of the Company or the Restricted Subsidiaries (to the extent such income or profits were included in computing Consolidated Net Income for such period), including, without limitation, state, franchise and similar taxes and foreign withholding taxes regardless of whether such taxes or payments are required to be remitted to any governmental authority.

 

“Consolidated Interest Expense” means, for any period, the interest expense of the Company and the Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, including but not limited to the portion of any payments or accruals with respect to Capitalized Lease Obligations that are allocable to interest expense, excluding (w) any write-offs of capitalized fees under agreements governing Indebtedness and all amendments thereto, (x) all non-cash charges for the amortization of deferred financing fees and debt issuance costs, (y) any interest on tax reserves to the extent the Company has elected to treat such interest as an interest expense under FASB ASC 450 since its adoption and (z) any interest-sensitive and index product benefits credited to policyholders of any Insurance Subsidiary and amortization of deferred sales inducements.

 

“Consolidated Net Income” means, for any period, the net income (loss) of the Company and its Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP (before preferred stock dividends); provided, however, that (without duplication):

 

(1)           any net income (loss) of any Person if such Person is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be excluded from such Consolidated Net Income, except that:

 

(a)           subject to the limitations contained in clauses (2) through (10) below, the Company’s equity in the net income of any such Person for such period will be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution; and

 

(b)           the Company’s equity in a net loss of any such Person for such period will be included in determining such Consolidated Net Income to the extent such loss has been funded with cash from the Company or a Restricted Subsidiary during such period;

 

(2)           any net income (but not loss) of the Insurance Subsidiaries determined on a combined basis shall be excluded from such Consolidated Net Income; provided that, notwithstanding the foregoing, with respect to any fiscal quarter, (i) there shall be included in Consolidated Net Income any such amount that could have been distributed by any Insurance Subsidiary to the Company as a dividend, distribution or return of capital or as a payment of interest or principal on any Surplus Note to the extent the distribution or payment of such amount would not cause the Aggregate RBC Ratio to be less than 225% as of the last day of such fiscal quarter, determined on a pro forma basis for (x) any dividends, distributions or returns of capital made during the period less any capital contributions made by the Company or a Restricted Subsidiary (other than an Insurance Subsidiary) in the Insurance Subsidiaries during such period, in each case to the extent not otherwise reflected in Consolidated Net Income of the Company and the Restricted Subsidiaries (other than the Insurance Subsidiaries) for such period and (y) any dividends, distributions or returns of capital made by the Insurance Subsidiaries after

 

10

 

such period and through the date of determination and any capital contributions made by the Company or a Restricted Subsidiary (other than an Insurance Subsidiary) in the Insurance Subsidiaries after such period and through the date of determination and (ii) the amount referenced in the immediately preceding clause (i) shall in no event exceed the aggregate net income of the Insurance Subsidiaries, determined on a consolidated basis for such period;

 

(3)           any after-tax effect of gain or loss (less all fees and expenses relating thereto) realized upon sales or other dispositions of any assets of the Company or such Restricted Subsidiary (including pursuant to any Sale/Leaseback Transaction) other than in the ordinary course of business shall be excluded from such Consolidated Net Income;

 

(4)           any after-tax effect of income (loss) from the early extinguishment of Indebtedness or early termination of Hedging Obligations or other derivative instruments shall be excluded from such Consolidated Net Income;

 

(5)           the after-tax effect of extraordinary gain or loss shall be excluded from such Consolidated Net Income;

 

(6)           the after-tax effect of the cumulative effect of a change in accounting principles shall be excluded from such Consolidated Net Income;

 

(7)           any after-tax effect of non-cash impairment charges recorded in connection with the application of FASB ASC 350 and FASB ASC 360 shall be excluded from such Consolidated Net Income;

 

(8)           any non-cash compensation expense realized for grants of performance shares, stock options or other rights to officers, directors and employees of the Company or any Restricted Subsidiary shall be excluded from such Consolidated Net Income;

 

(9)           all impairment charges in connection with Investments made by any Insurance Subsidiary in the ordinary course of business shall be excluded from such Consolidated Net Income; provided that the amount of any cash charges relating to such impairment charges shall not be excluded from Consolidated Net Income by operation of this clause (9) to the extent such cash charges reduce “Total Adjusted Capital” (as defined by the applicable Insurance Regulatory Authority); and

 

(10)         interest related realized net investment portfolio trading losses of any Insurance Subsidiary (other than any Insurance Subsidiary that is a Foreign Subsidiary) shall be excluded from Consolidated Net Income to the extent such losses do not reduce such Insurance Subsidiary’s “Total Adjusted Capital” (as defined by the applicable Insurance Regulatory Authority).

 

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

 

(1)           was a member of such Board of Directors on the Issue Date; or

 

(2)           was nominated for election or elected to such Board of Directors with the approval of the majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.

 

11

 

“Convertible 2009 Debt” means Indebtedness of $115,839,000 in aggregate principal amount issued under the Convertible 2009 Debt Documents.

 

“Convertible 2009 Debt Documents” means the Indenture in respect of the Convertible 2009 Debt, dated as of December 22, 2009, by and between the Company and U.S. Bank National Association, as trustee, the Company’s 5.25% Contingent Convertible Senior Notes due 2029 issued thereunder, and related instruments, agreements and other documents, as amended and supplemented from time to time.

 

“Convertible 2010 Debt” means Indebtedness of $200,000,000 in aggregate principal amount issued under the Convertible 2010 Debt Documents.

 

“Convertible 2010 Debt Documents” means the Indenture in respect of the Convertible 2010 Debt, dated as of September 22, 2010, by and between the Company and U.S. Bank National Association, as trustee, the Company’s 3.5% Convertible Senior Notes due 2015 issued thereunder, and related instruments, agreements and other documents, as amended and supplemented from time to time.

 

“Convertible 2010 Debt Hedges” means each of the call option transaction confirmation letter agreements dated September 16, 2010 and September 17, 2010 referencing the Convertible 2010 Debt Documents between the Company and one or more financial institutions, and any additional call option transaction confirmation letter agreements entered into by the Company referencing the Convertible 2010 Debt Documents.

 

“Corporate Trust Office of the Trustee” shall be at the address of the Trustee specified in Section 12.01 or such other address as to which the Trustee may give notice to the Holders and the Company.

 

“Currency Agreement” means in respect of a Person any foreign exchange contract, currency swap agreement, currency futures contract, currency option contract or other similar agreement as to which such Person is a party or a beneficiary.

 

“Custodian” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.

 

“Debt Facility” or “Debt Facilities” means, with respect to the Company or any of the Restricted Subsidiaries, one or more financing arrangements (including, without limitation, credit facilities, indentures and note purchase agreements and including the Senior Credit Agreement) providing for revolving credit loans, term loans, letters of credit or other long-term indebtedness or issuances of debt securities evidenced by notes, debentures, bonds or similar instruments, in each case, as amended, restated, supplemented, modified, renewed, refunded, replaced or refinanced (including by means of sales of debt securities) in whole or in part from time to time (and whether or not with the original trustee, administrative agent, holders and lenders or another trustee, administrative agent or agents), including, without limitation, any agreement extending the maturity thereof or increasing the amount of available borrowings thereunder pursuant to incremental facilities or adding Subsidiaries of the Company as additional guarantors thereunder, and whether or not increasing the amount of Indebtedness that may be issued thereunder.

 

“Debt to Total Capitalization Ratio” means, as of any date, and giving pro forma effect to any Restricted Payment made or Indebtedness Incurred subsequent to such date, as well as any other pro forma adjustments in a manner consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio, the ratio of (a) the principal amount of, and accrued but unpaid interest on, all Indebtedness of the Company and the Restricted Subsidiaries outstanding on such

 

12

 

date, other than (i) Indebtedness owing to the Company or any Subsidiary Guarantor and (ii) the Obligations (if any) of the Company or any Restricted Subsidiary in respect of Swap Contracts as determined by reference to the Swap Termination Value thereof, to (b) Total Capitalization on such date.

 

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

 

“Definitive Note” means a certificated Initial Note or Additional Note that does not include the Global Notes Legend.

 

“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 as the Depositary with respect to the Notes, and any and all successors thereto appointed as Depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

 

“Designated Non-cash Consideration” means any consideration which is not cash or Cash Equivalents received by the Company or the Restricted Subsidiaries in connection with an Asset Disposition that is designated as Designated Non-cash Consideration pursuant to an Officers’ Certificate executed by the Company at the time of such Asset Disposition. Any particular item of Designated Non-cash Consideration will cease to be considered to be outstanding once it has been transferred, sold or otherwise exchanged for or converted into or for cash or Cash Equivalents.

 

“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event:

 

(1)           matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;

 

(2)           is convertible into or exchangeable for Indebtedness or Disqualified Stock of such Person (excluding Capital Stock which is convertible or exchangeable solely at the option of the Company or a Restricted Subsidiary (it being understood that upon such conversion or exchange it shall be an Incurrence of such Indebtedness or Disqualified Stock)); or

 

(3)           is redeemable at the option of the holder of the Capital Stock in whole or in part,

 

in each case prior to the date 91 days after the final maturity date of the Notes; provided, however, that only the portion of Capital Stock that so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date will be deemed to be Disqualified Stock; provided, further, that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company or any of its Subsidiaries to repurchase such Capital Stock upon the occurrence of a “change of control” or “asset disposition” (each defined in a similar manner to the corresponding definitions in this Indenture) shall not constitute Disqualified Stock if the terms of such Capital Stock (and all such securities into which it is convertible or for which it is ratable or exchangeable) provide that the Company or any such Subsidiary may not repurchase or redeem any such Capital Stock (and all such securities into which it is convertible or for which it is ratable or exchangeable) pursuant to such provision prior to compliance by the Company or such Subsidiary with the provisions of this Indenture set forth in Sections 4.09 and 4.12 and such repurchase or redemption complies with Section 4.06. In addition, any Capital Stock held by any future, present or former employee, director, officer, manager or consultant (or their estates, spouses or former spouses) of such Person, any of its Subsidiaries or any direct or indirect parent company of such Person pursuant to any stockholders agreement, management equity plan or stock option plan or any other management or employee benefit plan or agreement shall not constitute Disqualified Stock solely because

 

13

 

it may be required to be repurchased by such Person or its Subsidiaries following the termination of employment or death or disability of such employee, director, officer, manager or consultant with such Person or any of its Subsidiaries or in order to satisfy applicable regulatory or statutory obligation (so long as, in each case referred to in this sentence, any such requirement is made subject to compliance with this Indenture).

 

“Domestic Subsidiary” means any Subsidiary that is not a Foreign Subsidiary.

 

“DTC” means The Depository Trust Company.

 

“Equity Interest” means (a) the interest of any (i) shareholder in a corporation, (ii) partner in a partnership (whether general, limited, limited liability or joint venture), (iii) member in a limited liability company, or (iv) other Person having any other form of equity security or ownership interest and (b) all of the rights to purchase, warrants, participations or other equivalents of or interests in (however designated) equity of any Person described in clause (a) (including through debt securities convertible into any of the foregoing).

 

“Equity Offering” means any public or private sale for cash, after the Issue Date, by the Company of its Capital Stock (other than Disqualified Stock) other than issuances registered on Form S-4 or S-8 or any successor thereto or any issuance to a Subsidiary of the Company or pursuant to employee benefit plans or otherwise in compensation to officers, directors or employees.

 

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

 

“Excluded Subsidiary” means (a) any Foreign Subsidiary, (b) any Domestic Subsidiary, substantially all of the assets of which consist of Equity Interests in one or more Foreign Subsidiaries, (c) any Immaterial Subsidiary, (d) any Insurance Subsidiary or any Subsidiary of an Insurance Subsidiary, (e) any Unrestricted Subsidiary and (f) any Restricted Subsidiary that is not permitted by law or regulation to guarantee the Obligations with respect to the Notes or that would be required to obtain governmental (including regulatory) consent, approval, license or authorization to guarantee the Obligations with respect to the Notes (unless such consent, approval, license or authorization has been received).

 

“Existing Convertible Notes” means, collectively, the Convertible 2009 Debt and the Convertible 2010 Debt.

 

“Fair Market Value” means, with respect to any asset or property, the price that would reasonably be expected to be paid in an arm’s length free market transaction, for cash, between a willing seller and a willing buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value shall be determined, except as otherwise provided, by (x) if such decision involves a determination of Fair Market Value equal or less than $50.0 million, in Good Faith by the Company and (y) if such decision involves the determination of Fair Market Value in excess of $50.0 million, in good faith by the Board of Directors of the Company.

 

“Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the ratio of Consolidated EBITDA of such Person for such period to the Fixed Charges of such Person for such period.

 

In the event that the Company or any of the Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than in the case of revolving credit borrowings, in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues, repurchases or redeems Disqualified Stock or Preferred Stock

 

14

 

 

subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

 

For purposes of making the computation referred to above, Investments, Asset Dispositions, Asset Acquisitions, mergers, consolidations and discontinued operations (as determined in accordance with GAAP), and any operational changes that the Company or any Restricted Subsidiary has determined to make and/or has made during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such events (and the change of any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period shall have made any Investment, Asset Disposition, Asset Acquisition, merger, consolidation or discontinued operation or operational change that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such event had occurred at the beginning of the applicable four-quarter period.

 

For purposes of this definition, whenever pro forma effect is to be given to any event, the pro forma calculations shall be made in Good Faith by the Company. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of the Company, to reflect operating expense reductions and other operating improvements, synergies or cost savings reasonably expected to result from such relevant pro forma event based on actions already taken and for which the full run-rate effect of such actions is expected to be realized within 12 months of such action.

 

If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Company may designate.

 

For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve-month period immediately prior to the date of determination in a manner consistent with that used in calculating Consolidated EBITDA for the applicable period.

 

“Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of:

 

15

 

(1)           Consolidated Interest Expense of such Person for such period, and

 

(2)           all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and the Restricted Subsidiaries.

 

“Foreign Subsidiary” means any Subsidiary that is not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia and any Subsidiary of such Subsidiary.

 

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the Issue Date (except with respect to the financial statements being furnished pursuant to Section 4.05, as to which such principles in effect from time to time shall apply), including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession. All ratios and computations based on GAAP contained in this Indenture will be computed in conformity with GAAP, except that in the event the Company is acquired in a transaction that is accounted for using purchase accounting, the effects of the application of purchase accounting shall be disregarded in the calculation of such ratios and other computations contained in this Indenture.

 

“Good Faith by the Company” means the decision in good faith by a responsible financial or accounting officer of the Company.

 

“Guarantee” means any obligation, contingent or otherwise, of any Person, directly or indirectly, guaranteeing any Indebtedness or other financial obligations of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:

 

(1)           to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or

 

(2)           entered into for purposes of assuring in any other manner the obligee of such Indebtedness or other financial obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);

 

provided, however, that the term “Guarantee” will not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

 

“Hedging Obligations” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement or Currency Agreement, excluding any Obligations of Insurance Subsidiaries with respect to Swap Contracts entered into in the ordinary course of business and consistent with the investment policy approved by the Board of Directors of such Insurance Subsidiary.

 

“Holder” means a Person in whose name a Note is registered on the Security Registrar’s books.

 

“Immaterial Subsidiary” means any Subsidiary (other than an Insurance Subsidiary) that (a) (x) solely for purposes of the definition of “Excluded Subsidiary” when used in clause (i) of Section 4.13(a), holds, directly or indirectly, 5% or less of the Consolidated Assets of the Company and its Subsidiaries and (y) solely for purposes of the definition of “Excluded Subsidiary” when used in clause (iii) of Section 4.13(a), holds, directly or indirectly, assets with an aggregate fair market value less than

 

16

 

$2.5 million as of the end of the most recently ended fiscal quarter of the Company, (b) (x) solely for purposes of the definition of “Excluded Subsidiary” when used in clause (i) of Section 4.13(a), accounts for 5% or less of the consolidated revenues of the Company and its Subsidiaries and (y) solely for purposes of the definition of “Excluded Subsidiary” when used in clause (iii) of Section 4.13(a), accounts for aggregate revenues of less than $2.5 million for the period of four consecutive fiscal quarters most recently ended, (c) has no Indebtedness (other than Indebtedness existing on the Issue Date and other Indebtedness in an aggregate principal amount not exceeding at any time one-half of the Fair Market Value of the assets of such Subsidiary at such time), (d) is not integral to the business or operations of the Company or its Subsidiaries (other than Immaterial Subsidiaries) and (e) has no Subsidiaries (other than Immaterial Subsidiaries).

 

“Incur” means to issue, create, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be deemed to be Incurred by such Person at the time it becomes a Subsidiary; and the terms “Incurred” and “Incurrence” have meanings correlative to the foregoing. Any Indebtedness issued at a discount (including Indebtedness on which interest is payable through the issuance of additional Indebtedness) shall be deemed incurred at the time of original issuance of the Indebtedness at the initial accreted amount thereof.

 

“Indebtedness” means, with respect to any Person on any date of determination (without duplication):

 

(1)           the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money (other than unspent cash deposits or securities held in escrow by or in favor of such Person, or in a segregated deposit or securities account, as applicable, controlled by such Person, in each case in the ordinary course of business to secure the performance obligations of, or damages owing from, one or more third parties);

 

(2)           the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

 

(3)           all unpaid obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit, letters of guaranty, bankers’ acceptances or other similar instruments (other than (i) cash-collateralized letters of credit to secure the performance of workers’ compensation, unemployment insurance, other social security laws or regulations, bids, trade contracts, leases, environmental and other statutory obligations, surety and appeal bonds, performance bonds and other obligations of like nature, in each case, obtained in the ordinary course of business) and (ii) other obligations with respect to letters of credit, letters of guaranty, bankers’ acceptances or other similar instruments securing obligations (other than obligations described in clauses (1) and (2) above and clause (5) below) entered into in the ordinary course of business of such Person to the extent such letters of credit, letters of guaranty, bankers’ acceptances or similar instruments are not drawn upon or, to the extent drawn upon, such drawing is reimbursed no later than the fifth Business Day following receipt by such Person of a demand for reimbursement following payment on the letter of credit, letter of guaranty, bankers’ acceptance or similar instrument);

 

(4)           the principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property (except Trade Payables), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto, except (i) any such balance that constitutes a Trade Payable, accrued liability

 

17

 

or similar obligation to a trade creditor, in each case accrued in the ordinary course of business, (ii) any earn-out obligation until the amount of such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and (iii) any such balance or unpaid purchase price to the extent that it is either required to be or at the option of such Person may be satisfied solely through the issuance of Equity Interests of the Company that are not Disqualified Stock;

 

(5)           Capitalized Lease Obligations and all Attributable Indebtedness of such Person (whether or not such items would appear on the balance sheet of the guarantor or obligor);

 

(6)           the principal component or liquidation preference of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock or, with respect to any Subsidiary that is not a Subsidiary Guarantor, any Preferred Stock (but excluding, in each case, any accrued dividends);

 

(7)           the principal component of all indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of such Indebtedness will be the lesser of (a) the Fair Market Value of such asset at such date of determination and (b) the amount of such indebtedness of such other Persons;

 

(8)           the principal component of Indebtedness of other Persons to the extent Guaranteed by such Person (whether or not such items would appear on the balance sheet of the guarantor or obligor); and

 

(9)           to the extent not otherwise included in this definition, net Hedging Obligations of such Person (the amount of any such obligations to be equal at any time to the termination value of such agreement or arrangement giving rise to such Hedging Obligation that would be payable by such Person at such time).

 

In no event shall the term “Indebtedness” include (i) any indebtedness under any overdraft or cash management facilities so long as any such indebtedness is repaid in full no later than five Business Days following the date on which it was incurred or in the case of such indebtedness in respect of credit or purchase cards, within 60 days of its incurrence, (ii) except as provided in clause (5) above, any obligations in respect of a lease properly classified as an operating lease in accordance with GAAP, (iii) any liability for federal, state, local or other taxes not yet delinquent or being contested in good faith and for which adequate reserves have been established to the extent required by GAAP or (iv) any customer deposits or advance payments received in the ordinary course of business, (v) Obligations of Insurance Subsidiaries with respect to Swap Contracts entered into in the ordinary course of business and consistent with the investment policy approved by the Board of Directors of such Insurance Subsidiary, (vi) the following obligations issued or undertaken in connection with a Statutory Reserve Financing: (A) Surplus Notes or other obligations of any Special Purpose Subsidiary of the Company (“Reserve Financing Notes”), (B) any securities backed by such Reserve Financing Notes by an entity formed in connection with a Statutory Reserve Financing, (C) letters of credit issued for the account of any Special Purpose Subsidiary of the Company, (D) reimbursement obligations of any Special Purpose Subsidiary, (E) any guarantees by the Company of the obligations described in (A), (B), (C) or (D) above, (F) reimbursement obligations of the Company or (G) capital maintenance or similar obligations of the Company in favor of any Special Purpose Subsidiary, (vii) any obligations with respect to insurance policies, annuities, guaranteed investment contracts and similar policies underwritten by, or Reinsurance Agreements or Retrocession Agreements entered into by, an Insurance Subsidiary, in each case, in the ordinary course of business, (viii) obligations with respect to Surplus Relief Reinsurance ceded by an

 

18

 

Insurance Subsidiary, (ix) obligations in the ordinary course of business to purchase securities that arise out of or in connection with the sale of the same or substantially similar securities or to return collateral consisting of securities arising out of or in connection with the loan of the same or substantially similar securities and (xi) other than for purposes of clause (5) of the definition of “Events of Default,” any payment obligation under any 2010 Warrants or other warrants or call options in respect of the Company’s Common Stock sold by the Company concurrently with any Permitted Bond Hedge, except to the extent that any such payment obligation, if and when any such payment obligation may arise, is greater than the amount of any concurrent payment or payments received by the Company in connection with the termination, cancellation or early unwind of any Convertible 2010 Debt Hedges or other Permitted Bond Hedges.

 

The amount of Indebtedness of any Person at any date will be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date; provided that (x) contingent obligations arising in the ordinary course of business and not with respect to borrowed money of such Person or other Persons and (y) the obligations of any Person under Reinsurance Agreements shall be deemed not to constitute Indebtedness. Notwithstanding the foregoing, money borrowed and set aside at the time of the Incurrence of any Indebtedness in order to prefund the payment of interest on such Indebtedness shall not be deemed to be “Indebtedness”; provided that such money is held to secure the payment of such interest.

 

“Independent Financial Advisor” means (1) an accounting, appraisal or investment banking firm or (2) a consultant to Persons engaged in a Related Business, in each case of nationally recognized standing that is, in the good faith judgment of the Company, qualified to perform the task for which it has been engaged.

 

“Initial Notes” has the meaning set forth in the recitals hereto.

 

“Insurance Subsidiary” means any Restricted Subsidiary of the Company that is required to be licensed as an insurer or reinsurer.

 

“Interest Payment Date” means January 15 and July 15 of each year to stated maturity of the Notes.

 

“Interest Rate Agreement” means with respect to any Person any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement as to which such Person is party or a beneficiary.

 

“Insurance Regulatory Authority” means, with respect to any Insurance Subsidiary, the governmental or regulatory authority or agency charged with regulating the insurance business of insurance companies or insurance holding companies, in its jurisdiction of legal domicile.

 

“Investment” means, with respect to any Person, all investments by such Person in other Persons by means of any direct or indirect advance, loan (other than advances or extensions of credit in the ordinary course of business that are in conformity with GAAP recorded as accounts receivable on the balance sheet of the Company or the Restricted Subsidiaries) or other extensions of credit (including by way of Guarantee or similar arrangement, but excluding any debt or extension of credit represented by a bank deposit other than a time deposit) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by, such Person

 

19

 

and all other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided that none of the following will be deemed to be an Investment:

 

(1)           Hedging Obligations and Swap Contracts entered into in the ordinary course of business and in compliance with this Indenture;

 

(2)           endorsements of negotiable instruments and documents in the ordinary course of business;

 

(3)           an acquisition of assets, Capital Stock or other securities by the Company or a Subsidiary for consideration to the extent such consideration consists of Common Stock of the Company;

 

(4)           a deposit of funds in connection with an acquisition of assets, Capital Stock or other securities; provided that either such acquisition is consummated by or through a Restricted Subsidiary or such deposit is returned to the Person who made it;

 

(5)           an account receivable arising, or prepaid expenses or deposits made, in the ordinary course of business; and

 

(6)           licensing or transfer of know-how or intellectual property or the providing of services in the ordinary course of business.

 

For purposes of Section 4.06,

 

(1)           “Investment” will include the portion (proportionate to the Company’s equity interest in a Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the Fair Market Value of the net assets of such Restricted Subsidiary at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company will be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (a) the Company’s aggregate “Investment” in such Subsidiary as of the time of such redesignation less (b) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets (as conclusively determined in good faith by the Board of Directors of the Company) of such Subsidiary at the time that such Subsidiary is so redesignated a Restricted Subsidiary;

 

(2)           any property transferred to or from an Unrestricted Subsidiary will be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by the Board of Directors of the Company; and

 

(3)           the value of any “Investment” made by an Insurance Subsidiary shall be calculated net of any liabilities of the Insurance Subsidiary that are assumed by the Person in whom the Investment is being made.

 

“Investment Grade Asset” means any Investment with a fixed maturity that has a rating of (x) at least BBB- by S&P and, if such Investment is rated by Moody’s, at least Ba2 from Moody’s or (y) at least Baa3 by Moody’s and, if such Investment is rated by S&P, at least BB from S&P, or, if such Investment is not rated by either S&P or Moody’s, an NAIC rating of at least Class 2.

 

20

 

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, in each case, with a stable or better outlook; provided that a change in outlook shall not by itself cause the Company to lose its Investment Grade Rating.

 

“Investment Income” means the amount of earnings of the Company on Investments, net of expenses actually incurred in connection with such Investments and taking into account realized gains and losses on such Investments.

 

“Issue Date” means July 17, 2013.

 

“Lien” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease (or any filing or agreement to give any financing statement in connection therewith) be deemed to constitute a Lien.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor to its rating agency business.

 

“NAIC” means the National Association of Insurance Commissioners or any successor thereto, or in the absence of the National Association of Insurance Commissioners or such successor, any other association, agency or other organization performing advisory, coordination or other like functions among insurance departments, insurance commissioners and similar governmental authorities of the various states of the United States toward the promotion of uniformity in the practices of such governmental authorities.

 

“Net Available Cash” from an Asset Disposition means an amount equal to the cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and net proceeds from the sale or other disposition of any securities or other assets received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Disposition or received in any other non-cash form) therefrom, in each case net of:

 

(1)           all brokerage, legal, accounting, investment banking, title and recording tax expenses, commissions and other fees and expenses incurred, and all Federal, state, provincial, foreign and local taxes required to be paid or accrued as a liability under GAAP (after taking into account any available tax credits or deductions and the Tax Sharing Agreement), as a consequence of such Asset Disposition;

 

(2)           all payments made on any Indebtedness that is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon such assets, or that must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law be repaid out of the proceeds from such Asset Disposition;

 

(3)           all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition;

 

21

 

(4)           the deduction of appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed of in such Asset Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters;

 

(5)           any portion of the purchase price from an Asset Disposition placed in escrow (whether as a reserve for adjustment of the purchase price, or for satisfaction of indemnities in respect of such Asset Disposition); and

 

(6)           in the case of an Asset Disposition by an Insurance Subsidiary, proceeds that are not permitted to be paid as a dividend or distribution by such Insurance Subsidiary pursuant to regulatory restrictions;

 

provided, however, that in the cases of clauses (4) and (5), upon reversal of any such reserve or the termination of any such escrow, Net Available Cash shall be increased by the amount of such reversal or any portion of funds released from escrow to the Company or any Restricted Subsidiary.

 

“Net Cash Proceeds” means, with respect to any issuance or sale of Capital Stock of the Company or any Restricted Subsidiary or Indebtedness, the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, listing fees, discounts or commissions and brokerage, consultant and other fees, charges and expenses actually Incurred in connection with such issuance or sale and net of taxes paid or payable as a result of such issuance or sale (after taking into account any available tax credit or deductions and any tax sharing arrangements).

 

“Net Excess Cash Flow” means, for any period, the sum, without duplication, of:

 

(1)           dividends paid in cash to the Company by any Subsidiary of the Company, net of Investments made in cash by the Company in any such Subsidiary; plus

 

(2)           interest paid in cash to the Company by any Subsidiary of the Company pursuant to any Indebtedness owing by such Subsidiary to the Company; plus

 

(3)           interest or principal paid in cash to the Company with respect to any Surplus Note; plus

 

(4)           management and other similar fees received by the Company under investment advisory service agreement, servicing agreements or otherwise from any Subsidiary of the Company; plus

 

(5)           amounts paid in cash to the Company pursuant to a loan made to it by any Subsidiary of the Company; plus

 

(6)           amounts paid in cash to the Company pursuant to the Tax Sharing Agreement by any Subsidiary of the Company; plus

 

(7)           the Company’s Investment Income received in cash; minus

 

(8)           cash operating expenses of the Company, which, for the avoidance of doubt, shall exclude the redemption price, repurchase price, premiums, fees, costs and expenses paid in cash incurred in connection with any redemption or repurchase of the Convertible 2009 Debt, the Convertible 2010 Debt, its subordinated debentures outstanding as of the Issue Date or any bonds, debentures or notes issued subsequent to the Issue Date; minus

 

22

 

(9)           Capitalized Expenditures of the Company made in cash; minus

 

(10)         any amounts paid in cash in respect of the Company’s Fixed Charges, scheduled principal amortization of Indebtedness and mandatory repayments of Indebtedness (other than mandatory repayments of Indebtedness in connection with any Restricted Payment); minus

 

(11)         any amounts paid by the Company in respect of interest on or in repayment of any loan referred to in clause (5) above; minus

 

(12)         any amounts paid in cash by the Company to any Insurance Subsidiary in respect of any overpayment by such Insurance Subsidiary of amounts required to be paid by such Insurance Subsidiary to the Company under the Tax Sharing Agreement, in each case for such period.

 

“Non-Guarantor Subsidiary” means any Restricted Subsidiary that is not a Subsidiary Guarantor.

 

“Non-Recourse Debt” means Indebtedness of a Person:

 

(1)           as to which neither the Company nor any Restricted Subsidiary (a) provides any Guarantee or credit support of any kind (including any undertaking, Guarantee, indemnity, agreement or instrument that would constitute Indebtedness) other than a pledge of Equity Interests of the Unrestricted Subsidiary that is the obligor thereunder or (b) is directly or indirectly liable (as a guarantor or otherwise);

 

(2)           no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness (other than the Notes) of the Company or any Restricted Subsidiary to declare a default under such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated Maturity; and

 

(3)           the explicit terms of which provide there is no recourse against any of the assets of the Company or the Restricted Subsidiaries other than recourse against any Equity Interests of the Unrestricted Subsidiary that is the obligor thereunder to the extent such Equity Interests are pledged in connection with such Indebtedness.

 

“Notes” means the Initial Notes and, more particularly, means any Note authenticated and delivered under this Indenture.  For all purposes of this Indenture, the term “Notes” shall also include any Additional Notes that may be issued under a supplemental indenture and Notes to be issued or authenticated upon transfer, replacement or exchange of Notes.

 

“Obligations” means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foregoing law), penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.

 

“Offer to Purchase” means an Asset Disposition Offer or a Change of Control Offer.

 

23

 

“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Company or, in the event that a Person is a partnership or a limited liability company that has no such officers, a person duly authorized under applicable law by the general partner, managers, members or a similar body to act on behalf of such Person. Officer of any Subsidiary Guarantor has a correlative meaning.

 

“Officers’ Certificate” means a certificate signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company.

 

“Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or a Restricted Subsidiary.

 

“Paying Agent” means initially, the Trustee and, thereafter, a replacement agent chosen by the Company in accordance with this Indenture.

 

“Permitted Bond Hedge” means (a) any net-settled call options or capped call options referencing the Company’s Common Stock purchased by the Company in connection with the issuance of convertible or exchangeable debt securities by the Company or any Restricted Subsidiary to hedge the Company’s or such Restricted Subsidiary’s obligations to deliver Common Stock under such Indebtedness, which call options are either “capped” or are purchased concurrently with the sale by the Company of a call option or options in respect of its Common Stock, in either case on terms that are customary for “call spread” transactions entered in connection with the issuance of convertible or exchangeable debt securities, and (b) the Convertible 2010 Debt Hedges.

 

“Permitted Investment” means:

 

(1)           any Investment in the Company or a Restricted Subsidiary, including through the purchase of Capital Stock of a Restricted Subsidiary;

 

(2)           any Investment by the Company or any Restricted Subsidiary in a Person, if as a result of such Investment:

 

(a)           such Person becomes a Restricted Subsidiary; or

 

(b)           such Person, in one transaction or a series of related transactions, is merged or consolidated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary,

 

and, in each case, any Investment held by such Person; provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation or transfer;

 

(3)           any Investment (a) in cash and Cash Equivalents or Investments that constituted cash or Cash Equivalents at the time made or (b) with a fixed maturity that has a rating of (x) at least AA- by S&P and, if such Investment is rated by Moody’s, at least Aa3 from Moody’s or (y) at least Aa3 by Moody’s and, if such Investment is rated by S&P, at least AA- from S&P.

 

(4)           any Investment consisting of receivables owing to the Company or any Restricted Subsidiary created or acquired in the ordinary course of business and payable or

 

24

 

 

dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;

 

(5)                                 any Investment consisting of commission, relocation, entertainment, payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

 

(6)                                 any Investment consisting of loans or advances to, or guarantees of third party loans to, employees, officers or directors of the Company or any Subsidiary in the ordinary course of business in an aggregate amount outstanding at any time not in excess of $2.0 million with respect to all loans or advances or guarantees made since the Issue Date (without giving effect to the forgiveness of any such loan) or to fund such Person’s purchase of Capital Stock of the Company or any direct or indirect parent of the Company;

 

(7)                                 any Investment acquired by the Company or any Restricted Subsidiary:

 

(a)                                 in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a judgment, bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable;

 

(b)                                 as a result of a foreclosure by the Company or any Restricted Subsidiary with respect to any secured Investment or other transfer of title with respect to any secured Investment in default; or

 

(c)                                  in the form of notes payable, or stock or other securities issued by account debtors to the Company or any Restricted Subsidiary pursuant to negotiated agreements with respect to the settlement of such account debtor’s accounts, and other Investments arising in connection with the compromise, settlement or collection of accounts receivable, in each case in the ordinary course of business;

 

(8)                                 any Investment made as a result of the receipt of non-cash consideration (including Designated Non-cash Consideration) from an Asset Disposition that was made pursuant to and in compliance with Section 4.09 or any other disposition of assets not constituting an Asset Disposition;

 

(9)                                 any Investment in existence on the Issue Date and any Investment committed to be made as of the Issue Date, and any extension, modification or renewal of any such Investments, or Investments purchased or received in exchange for such Investments, existing on, or committed to be made as of, the Issue Date, but only to the extent not involving additional advances, contributions or other Investments of cash or other assets or other increases thereof (other than as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities, in each case, pursuant to the terms of such Investment as in effect on the Issue Date);

 

(10)                          any Investment in any Person to the extent such Investment consists of Hedging Obligations or Swap Contracts, which transactions or obligations are Incurred in compliance with Section 4.08;

 

25

 

(11)                          any Investment consisting of a Guarantee of Indebtedness issued in accordance Section 4.08, and any Investment consisting of a guarantee to suppliers, licensors or the providers of operating leases (other than guarantees of Indebtedness) in the ordinary course of business;

 

(12)                          any Investment made in connection with the funding of contributions under any non-qualified retirement plan or similar employee compensation plan, including, without limitation, split-dollar insurance policies, in an amount not to exceed the amount of compensation expense recognized by the Company and any Restricted Subsidiary in connection with such plans;

 

(13)                          any Investment received in settlement of debts created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments or pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of a debtor;

 

(14)                          any Investment in any Person to the extent such Investment consists of prepaid expenses, negotiable instruments held for collection and lease, utility, unemployment insurance, workers’ compensation, performance and other similar deposits made in the ordinary course of business by the Company or any Restricted Subsidiary;

 

(15)                          any Investment consisting of prepayments and other credits to suppliers made in the ordinary course of business;

 

(16)                          any Investment consisting of endorsements of negotiable instruments and documents in the ordinary course of business;

 

(17)                          any Investment consisting of loans or advances or similar transactions with customers, distributors, clients, developers, suppliers or purchasers of goods or services in the ordinary course of business;

 

(18)                          Investment by an Insurance Subsidiary (including by any Subsidiary of such Insurance Subsidiary that is not itself an Insurance Subsidiary) (a) in the ordinary course of business and consistent with the investment policy approved by the Board of Directors of such Insurance Subsidiary, (b) consistent with Investment guidelines approved by the applicable Insurance Regulatory Authority or (c) otherwise permitted by the applicable Insurance Regulatory Authority;

 

(19)                          any Investment by the Company that constitute an Investment that would be permitted to be made by an Insurance Subsidiary pursuant to clause (18) of this definition of “Permitted Investments”;

 

(20)                          any Investment of the type described in clause (vi) of the second paragraph of the definition of “Indebtedness” in connection with Statutory Reserve Financings;

 

(21)                          any Investment the payment for which consists of Equity Interests of the Company (other than Disqualified Stock); provided, however, that such Equity Interests will not increase the amount available under Section 4.06(a)(C);

 

(22)                          any Investment to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions in Section 4.10(b)(2), (5) or (10);

 

26

 

(23)                          any Investments consisting of Permitted Bond Hedges; and

 

(24)                          Investments by the Company or any of its Restricted Subsidiaries, together with all other Investments pursuant to this clause (24), in an aggregate amount at the time of such Investment not to exceed $75.0 million outstanding at any one time (with the Fair Market Value of such Investment being measured at the time made and without giving effect to subsequent changes in value).

 

“Permitted Liens” means, with respect to any Person:

 

(1)                                 (x) pledges or deposits by such Person under workers’ compensation laws, unemployment, general insurance and other insurance laws and old age pensions and other social security or retirement benefits or similar legislation (including, without limitation, deposits made in the ordinary course of business to cash collateralize letters of credit described in clause (3) of the definition of “Indebtedness”), or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory or regulatory obligations of such Person or deposits of cash or United States government bonds to secure surety or appeal bonds to which such Person is a party, or good faith deposits as security for contested taxes or import or customs duties or for the payment of rent or other obligations of like nature, in each case Incurred in the ordinary course of business and (y) collateral consisting of Cash Equivalents securing letters of credit issued in respect of obligations to insurers in an aggregate amount not to exceed $10.0 million at any time outstanding;

 

(2)                                 Liens imposed by law and carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens arising in the ordinary course of business;

 

(3)                                 Liens for taxes, assessments or other governmental charges or levies not yet due or that are being contested in good faith by appropriate proceedings provided appropriate reserves required pursuant to GAAP have been made in respect thereof;

 

(4)                                 Liens in favor of issuers of surety, appeal or performance bonds or letters of credit or bankers’ acceptances or similar obligations issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

 

(5)                                 minor survey exceptions, encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building codes or other restrictions (including, without limitation, minor defects or irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

 

(6)                                 Liens securing Hedging Obligations or Swap Contracts relating to Indebtedness so long as the related Indebtedness is, and is permitted to be under this Indenture, secured by a Lien on the same property securing such Hedging Obligation or Swap Contracts;

 

27

 

(7)                                 Liens in favor of clearing agencies or securities trading exchanges in connection with option derivative transactions arising due to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated thereunder;

 

(8)                                 leases, licenses, subleases and sublicenses of assets (including, without limitation, real property and intellectual property rights) that do not materially interfere with the ordinary conduct of the business of the Company or any of the Restricted Subsidiaries;

 

(9)                                 judgment Liens not giving rise to an Event of Default, and Liens securing appeal or surety bonds related to such judgment, so long as any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

 

(10)                          Liens for the purpose of securing the payment of all or a part of the purchase price of, or Capitalized Lease Obligations, mortgage financings, purchase money indebtedness or other payments Incurred to finance assets or property (other than Capital Stock or other Investments) acquired, constructed, improved or leased in the ordinary course of business; provided that, in the case of this clause (10):

 

(a)                                 the aggregate principal amount of Indebtedness secured by such Liens does not exceed the cost of the assets or property so acquired, constructed or improved, plus reasonable fees and expenses of such Person incurred in connection therewith; and

 

(b)                                 such Liens are created within 180 days of construction, acquisition or improvement of such assets or property and do not encumber any other assets or property of the Company or any Restricted Subsidiary other than such assets or property and assets affixed or appurtenant thereto and the proceeds thereof;

 

(11)                          Liens that constitute banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a bank, depositary or other financial institution, whether arising by operation of law or pursuant to contract;

 

(12)                          Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Company and the Restricted Subsidiaries in the ordinary course of business;

 

(13)                          Liens existing on the Issue Date (other than Liens permitted under clause (33) below);

 

(14)                          Liens on property, assets or shares of stock of a Person at the time such Person is acquired by, merged with or into or consolidated, combined or amalgamated with the Company or any Restricted Subsidiary; provided, that such Liens were not Incurred in connection with, or in contemplation of, such acquisition, merger, consolidation, combination or amalgamation; provided, further, that any such Lien may not extend to any other property owned by the Company or any Restricted Subsidiary;

 

(15)                          Liens on property existing at the time the Company or a Restricted Subsidiary acquired the property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided, that such Liens were not Incurred in connection with, or in contemplation of, such acquisition; provided, further,

 

28

 

that any such Lien may not extend to any other property owned by the Company or any Restricted Subsidiary;

 

(16)                          Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary;

 

(17)                          Liens on Capital Stock of Unrestricted Subsidiaries and Liens on property of an Unrestricted Subsidiary at the time that it is designated as a Restricted Subsidiary; provided that such Liens were not incurred in connection with or in contemplation of such designation;

 

(18)                          good faith deposits as security for contested taxes or contested import to customs duties;

 

(19)                          Liens securing Refinancing Indebtedness Incurred to refinance, refund, replace, amend, extend or modify, as a whole or in part, Indebtedness that was previously so secured pursuant to clauses (9), (10), (12), (13), (14), (15), (16) and (19) of this definition; provided that any such Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the indebtedness being refinanced or is in respect of property that is the security for a Permitted Lien hereunder;

 

(20)                          any interest or title of a lessor under any operating lease;

 

(21)                          Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

 

(22)                          Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with importation of goods;

 

(23)                          Liens arising out of conditional sale, title retention, consignment or similar arrangements, or that are contractual rights of set-off, relating to the sale or purchase of goods entered into by the Company or any of the Restricted Subsidiaries in the ordinary course of business;

 

(24)                          Liens on funds of the Company or any Subsidiary held in deposit accounts with third party providers of payment services securing credit card charge-back reimbursement and similar cash management obligations of the Company or the Subsidiaries;

 

(25)                          Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being collected upon;

 

(26)                          Liens arising by operation of law or contract on insurance policies and the proceeds thereof to secure premiums thereunder;

 

(27)                          Liens arising under escrows, trusts, custodianships, separate accounts, funds withheld procedures, and similar deposits, arrangements or agreements established with respect to insurance policies, annuities, guaranteed investment contracts and similar products

 

29

 

underwritten by, or Reinsurance Agreements entered into by, any Insurance Subsidiary in the ordinary course of business;

 

(28)                          Deposits with Insurance Regulatory Authorities in the ordinary course of business;

 

(29)                          Liens on insurance policies and proceeds of insurance policies (including rebates of premiums) securing Indebtedness incurred pursuant to Section 4.08(b)(12) to finance the payment of premiums on the insurance policies subject to such Liens;

 

(30)                          statutory, common law or contractual Liens of landlords;

 

(31)                          customary Liens granted in favor of a trustee to secure fees and other amounts owing to such trustee under an indenture or other agreement pursuant to which Indebtedness permitted under Section 4.08 is Incurred;

 

(32)                          Liens on any cash earnest money deposit made by the Company or any Restricted Subsidiary in connection with any letter of intent or acquisition agreement that is not prohibited by this Indenture;

 

(33)                          Liens securing (A) Obligations with respect to Indebtedness Incurred pursuant to Section 4.08(b)(2) and (B) Hedging Obligations and cash management obligations that are secured ratably (other than with respect to cash collateral for letters of credit) with Indebtedness outstanding pursuant to Section 4.08(b)(2);

 

(34)                          Liens in favor of credit card processors granted in the ordinary course of business;

 

(35)                          Liens arising in connection with Cash Equivalents described in clause (5) of the definition of Cash Equivalents;

 

(36)                          Liens securing other obligations in an amount not to exceed $50.0 million at any time outstanding;

 

(37)                          Liens securing cash management obligations incurred in the ordinary course of business;

 

(38)                          Liens securing Indebtedness incurred pursuant to Section 4.08(b)(13) in an aggregate amount not to exceed $5.0 million and customary set-off rights in favor of depositary banks;

 

(39)                          Liens on the assets of a Non-Guarantor Subsidiary securing Indebtedness of a Non-Guarantor Subsidiary that was permitted by the terms of this Indenture to be incurred.

 

(40)                          any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any non-majority-owned joint venture or similar arrangement pursuant to any joint venture or similar arrangement the Investment in which was permitted under this Indenture;

 

(41)                          collateral consisting of Cash Equivalents securing Permitted Swap Obligations in an aggregate amount not to exceed, at any time, $10.0 million; provided that, for purposes of this clause (41), in the case of Cash Equivalents described in clauses (2), (3), (4) and (10) of the definition thereof, the one-year maturity limitations set forth in such clauses shall be disregarded;

 

30

 

(42)                          Liens encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business and not for speculative purposes; and

 

(43)                          Liens on property of any Foreign Subsidiary securing Indebtedness of such Foreign Subsidiary to the extent such Indebtedness is permitted to be Incurred pursuant to Section 4.08(b).

 

“Permitted Swap Obligations” means all Obligations of the Company or any of its Subsidiaries existing or arising under Swap Contracts; provided that such Obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of mitigating risks associated with liabilities, commitments or assets held by such Person, or changes in the value of securities issued by such Person in conjunction with a securities repurchase program not otherwise prohibited under this Indenture, and not for purposes of speculation or taking a “market view.”

 

“Permitted Transactions” means (a) mortgage-backed security transactions in which an investor sells mortgage collateral, such as securities issued by the Government National Mortgage Association and the Federal Home Loan Mortgage Corporation, for delivery in the current month while simultaneously contracting to repurchase “substantially the same” (as determined by the Public Securities Association and GAAP) collateral for a later settlement, (b) transactions in which an investor lends cash to a primary dealer and the primary dealer collateralizes the borrowing of the cash with certain securities, (c) transactions in which an investor lends securities to a primary dealer and the primary dealer collateralizes the borrowing of the securities with cash collateral, (d) transactions in which an investor makes loans of securities to a broker-dealer under an agreement requiring such loans to be continuously secured by cash collateral or United States government securities, (e) transactions structured as, and submitted to the NAIC Security Valuation Office for approval as, Replication (Synthetic Asset) Transactions (RSAT) (provided that, to the extent that such approval is not granted in respect of any such transaction, such transaction shall cease to constitute a Permitted Transaction 30 days following the date of such rejection, denial or non-approval), and (f) transactions in which a federal home loan mortgage bank (a “FHLMB”) makes loans to an Insurance Subsidiary, that are sufficiently secured by appropriate assets of such Insurance Subsidiary consisting of government agency mortgage-backed securities in accordance with the rules, regulations and guidelines of such FHLMB for its loan programs.

 

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

 

“Preferred Stock” means, as applied to the Capital Stock of any corporation, Capital Stock of any class or classes (however designated) that is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

 

“Rating Agencies” means S&P and Fitch Ratings, Inc. or if S&P or Fitch Ratings, Inc. or both shall not make a rating on the Notes publicly available, a nationally recognized statistical rating organization or organizations, as the case may be, selected by the Company (as certified by a resolution of the Board of Directors) which shall be substituted for S&P or Fitch Ratings, Inc. or both, as the case may be.

 

“Record Date” for the interest payable on any applicable Interest Payment Date means the January 1 or July 1 (whether or not a Business Day) next preceding such Interest Payment Date.

 

31

 

“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, refund, replace, repay, prepay, purchase, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for or to consolidate, such Indebtedness. “Refinanced” and “Refinancing” shall have correlative meanings.

 

“Refinancing Indebtedness” means any Indebtedness that Refinances any other Indebtedness, including any successive Refinancings, so long as:

 

(1)                                 such Indebtedness is in an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) not in excess of the sum of:

 

(a)                                 the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being Refinanced, and

 

(b)                                 an amount necessary to pay any fees and expenses, including accrued and unpaid interest, premiums, transaction costs and defeasance costs, related to such Refinancing,

 

(2)                                 other than in the case of the Convertible 2009 Debt or the Convertible 2010 Debt, the Average Life of such Indebtedness is equal to or greater than the Average Life of the Indebtedness being Refinanced,

 

(3)                                 the Stated Maturity of such Indebtedness (other than the Convertible 2009 Debt and Convertible 2010 Debt) is no earlier than the Stated Maturity of the Indebtedness being Refinanced,

 

(4)                                 in the case of the Convertible 2009 Debt and the Convertible 2010 Debt, (i) the Stated Maturity of such Indebtedness is no earlier than 91 days after the Stated Maturity of the Notes and (ii) the Average Life of such Indebtedness extends at least to the date that is 91 days after the Stated Maturity of the Notes; and

 

(5)                                 if the Indebtedness being Refinanced was subordinated to the Notes or the Subsidiary Guarantees, the new Indebtedness shall be subordinated to the Notes or the Subsidiary Guarantees, as applicable, at least to the same extent as such Indebtedness being Refinanced;

 

provided, however, that Refinancing Indebtedness shall not include:

 

(x)                                 Indebtedness of a Restricted Subsidiary of the Company that is not a Subsidiary Guarantor that Refinances Indebtedness of the Company or a Subsidiary Guarantor, or

 

(y)                                 Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.

 

“Reinsurance Agreements” means any agreement, contract, treaty, certificate or other arrangement providing for Ceded Reinsurance by any Insurance Subsidiary or any Subsidiary of any Insurance Subsidiary under one or more insurance, annuity, reinsurance or retrocession policies, agreements, contracts, treaties, certificates or similar arrangements. Reinsurance Agreements shall include, but not be limited to, any agreement, contract, treaty, certificate or other arrangement that is treated as such by the applicable Insurance Regulatory Authority.

 

32

 

“Related Business” means any business that is the same as or related, ancillary or complementary to any of the businesses of the Company and the Restricted Subsidiaries on the Issue Date and any reasonable extension or evolution of any of the forgoing.

 

“Restricted Investment” means any Investment other than a Permitted Investment.

 

“Restricted Subsidiary” means any Subsidiary of the Company other than an Unrestricted Subsidiary.

 

“Retrocession Agreement” means any agreement, contract, treaty or other arrangement whereby any Insurance Subsidiary or any Subsidiary of any Insurances Subsidiary cedes reinsurance to other insurers (other than to another Insurance Subsidiary or a Subsidiary of another Insurance Subsidiary).

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.

 

“Sale/Leaseback Transaction” means any direct or indirect arrangement relating to property now owned or hereafter acquired by the Company or a Restricted Subsidiary whereby the Company or such Restricted Subsidiary transfers such property to a Person (other than the Company or any of its Subsidiaries) and the Company or such Restricted Subsidiary leases it from such Person.

 

“SAP” shall mean, with respect to any Insurance Subsidiary, the statutory accounting practices prescribed or permitted by the Insurance Regulatory Authority of its jurisdiction of legal domicile, consistently applied as in effect from time to time.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Second Supplemental Indenture” shall have the meaning set forth in the recitals hereto.

 

“Securities” shall have the meaning set forth in the recitals hereto.

 

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

 

“Security Registrar” means initially, the Trustee and, thereafter, a replacement registrar chosen by the Company in accordance with this Indenture.

 

“Senior Credit Agreement” means the Credit Agreement, dated January 28, 2011, among the Company, JPMorgan Chase Bank, N.A., SunTrust Bank and Deutsche Bank Securities, Inc., as amended by the First Amendment, dated as of July 12, 2013.

 

“Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

 

“Special Purpose Subsidiary” means any Restricted Subsidiary formed solely to issue Surplus Notes or other obligations in connection with a Statutory Reserve Financing or enter into Reinsurance Agreements in connection with a Statutory Reserve Financing or enter into ancillary obligations in respect of the foregoing.

 

“Stated Maturity” means, with respect to any security, the date specified in the agreement governing or certificate relating to such security as the fixed date on which the final payment of principal

 

33

 

of such security is due and payable, including pursuant to any mandatory redemption provision, but shall not include any contingent obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof.

 

“Statutory Reserve Financing” means a transaction or series of transactions entered into primarily for the purpose of financing a portion of the statutory reserves required to be held by an Insurance Subsidiary, where the proceeds or funding obligations provided by the financing counterparty or counterparties in such transaction or transactions are not expected, as of the date such transaction or transactions are entered into, to be used or applied to pay insurance or reinsurance claims reasonably projected to be payable as of the date such transaction or transactions are entered into.

 

“Subordinated Obligation” means any Indebtedness of the Company or a Restricted Subsidiary (whether outstanding on the Issue Date or thereafter Incurred) that is subordinated or junior in right of payment to the Notes pursuant to its terms. No Indebtedness of the Company shall be deemed to be subordinated or junior in right of payment to any other Indebtedness of the Company solely by virtue of Liens, Guarantees, maturity or payments or structural subordination.

 

“Subsidiary” of any Person means (1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof), or (2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or one or more Subsidiaries of such Person (or any combination thereof). Unless otherwise specified herein, each reference to a Subsidiary will refer to a Subsidiary of the Company.

 

“Subsidiary Guarantee” means, individually, any Guarantee by a Subsidiary Guarantor pursuant to the terms of this Indenture and any supplemental indenture thereto, and, collectively, all such Guarantees. Each such Subsidiary Guarantee will be set forth in a supplement to this Indenture.

 

“Subsidiary Guarantor” means any Restricted Subsidiary that provides a Subsidiary Guarantee in accordance with this Indenture; provided that upon release or discharge of such Restricted Subsidiary from its Subsidiary Guarantee in accordance with this Indenture, such Restricted Subsidiary ceases to be a Subsidiary Guarantor.

 

“substantially concurrent” means, with respect to two or more events, the occurrence of such events within 60 days of each other.

 

“Surplus Note” means a promissory note executed by an Insurance Subsidiary of the type generally described in the insurance industry as a “surplus note,” the principal amount of which an insurance regulator permits the issuer to record as an addition to Capital and Surplus rather than as a liability in accordance with SAP.

 

“Surplus Relief Reinsurance” means any transaction in which any Insurance Subsidiary or any Subsidiary of an Insurance Subsidiary cedes business under a Reinsurance Agreement that would be considered a “financing-type” reinsurance agreement as determined in accordance with GAAP.

 

“Swap Contract” means any agreement relating to any transaction (whether or not arising under a master agreement) that is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond, note or bill option, interest rate option, futures contract, forward foreign exchange transaction, cap, collar or floor transaction, currency swap,

 

34

 

 

cross-currency rate swap, swaption, currency option, credit derivative transaction or any other similar transaction (including any option to enter into any of the foregoing) or any combination of the foregoing, and any master agreement relating to or governing any or all of the foregoing; provided that, for the avoidance of doubt, “Swap Contracts” shall not include any Permitted Bond Hedges or the 2010 Warrants.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined by the Company based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts.

 

“Tax Sharing Agreement” means the consolidated income tax agreement, dated April 11, 2011, among the Company and certain of its Subsidiaries as in effect on the Issue Date or as thereafter amended in any manner, that, taken as a whole, is not more disadvantageous to the Holders in any material respect than any such agreement as it was in effect on the Issue Date, it being understood that, any amendment the purpose of which is to add Subsidiaries of the Company as parties to such agreement shall not be to be more disadvantageous to the Holders solely by virtue of adding such Subsidiaries as parties..

 

“Total Capitalization” means, without duplication, (a) the amount described in clause (a) of the definition of “Debt to Total Capitalization Ratio” plus (b) the Total Shareholders’ Equity of the Company.

 

“Total Shareholders’ Equity” means the total common and preferred shareholders’ equity of the Company as determined in accordance with GAAP (calculated excluding (i) unrealized gains (losses) on securities as determined in accordance with FASB ASC 320 (Investments—Debt and Equity Securities) and (ii) any charges taken to write off any goodwill included on the Company’s balance sheet on the Issue Date to the extent such charges are required by FASB ASC 320 (Investments—Debt and Equity Securities) and ASC 350 (Intangibles—Goodwill and Others)).

 

“Trade Payables” means, with respect to any Person, any accounts payable to trade creditors created, assumed or Guaranteed by such Person arising in the ordinary course of business in connection with the acquisition of goods or services.

 

“Transactions” means, collectively, the offering of the Notes, the proposed redemption or repurchase of the Convertible 2009 Debt and the 2010 Convertible Debt and the use of the remaining proceeds of the offering of the Notes as described in the Prospectus Supplement, dated July 12, 2013, of the Company.

 

“Treasury Rate” means, as obtained by the Company, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to July 15, 2017; provided, however, that if the period from the redemption date to July 15, 2017 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the redemption date to July 15, 2017 is less than one year, the weekly

 

35

 

average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year will be used.

 

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.

 

“Trustee” means the party named as such in this Indenture until a successor replaces it and, thereafter, means such successor.

 

“Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from time to time.

 

“Unrestricted Subsidiary” means:

 

(1)                                 any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Company in the manner provided below; and

 

(2)                                 any Subsidiary of an Unrestricted Subsidiary.

 

The Board of Directors of the Company may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary or a Person becoming a Subsidiary through merger or consolidation or Investment therein) to be an Unrestricted Subsidiary only if:

 

(1)                                 such Subsidiary or any of its Subsidiaries does not own any Capital Stock or Indebtedness of or have any Investment in, or own or hold any Lien on any property of, any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary;

 

(2)                                 all the Indebtedness of such Subsidiary and its Subsidiaries shall, at the date of designation, and will at all times thereafter while they are Unrestricted Subsidiaries, consist of Non-Recourse Debt;

 

(3)                                 such designation and the Investment of the Company in such Subsidiary complies with Section 4.06;

 

(4)                                 such Subsidiary, either alone or in the aggregate with all other Unrestricted Subsidiaries, does not operate, directly or indirectly, all or substantially all of the business of the Company and its Subsidiaries; and

 

(5)                                 such Subsidiary is a Person with respect to which neither the Company nor any of the Restricted Subsidiaries has any direct or indirect obligation:

 

(a)                                 to subscribe for additional Capital Stock of such Person; or

 

(b)                                 to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results.

 

Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a resolution of the Board of Directors of the Company giving effect to such designation and an Officers’ Certificate certifying that such designation complies with the foregoing conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as

 

36

 

an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary shall be deemed to be Incurred as of such date.

 

The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof and the Company could Incur at least $1.00 of additional Indebtedness pursuant to Section 4.08(a) on a pro forma basis taking into account such designation.

 

“U.S. Government Obligations” means securities that are (1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depositary receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the Holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depositary receipt.

 

“Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled to vote in the election of directors, managers or trustees, as applicable, of such Person.

 

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

 

Section 1.02.   Other Definitions.

 

	
Term
    	
 
    	
Defined in Section
    
	
“Agent Members”
    	
 
    	
2.1(c) of Appendix A
    
	
“Affiliate Transaction”
    	
 
    	
4.10(a)
    
	
“Applicable Procedures”
    	
 
    	
1.1(a) of Appendix A
    
	
“Asset Disposition Offer”
    	
 
    	
4.09(c)
    
	
“Asset Disposition Offer Amount”
    	
 
    	
3.05(b)
    
	
“Asset Disposition Offer Period”
    	
 
    	
3.05(b)
    
	
“Asset Disposition Purchase Date”
    	
 
    	
3.05(b)
    
	
“Change of Control Offer”
    	
 
    	
4.12(b)
    
	
“Change of Control Payment”
    	
 
    	
4.12(b)
    
	
“Change of Control Payment Date”
    	
 
    	
4.12(b)
    
	
“Clearstream”
    	
 
    	
1.1(a) of Appendix A
    
	
“Covenant Defeasance”
    	
 
    	
13.03
    
	
“Defeasance”
    	
 
    	
13.02 of Base Indenture
    
	
“Euroclear”
    	
 
    	
1.1(a) of Appendix A
    
	
“Event of Default”
    	
 
    	
6.01(a)
    
	
“Excess Proceeds”
    	
 
    	
4.09(c)
    
	
“Expiration Date”
    	
 
    	
8.01(b)
    

 

37

 

	
Term
    	
 
    	
Defined in Section
    
	
“Global Note”
    	
 
    	
2.02(b)
    
	
“Global Notes Legend”
    	
 
    	
2.3(d) of Appendix A
    
	
“Guaranteed Obligations”
    	
 
    	
10.01(a)
    
	
“Increased Amount”
    	
 
    	
4.11(b)
    
	
“OID Notes Legend”
    	
 
    	
2.3(d) of Appendix A
    
	
“Pari Passu Indebtedness”
    	
 
    	
4.09(c)
    
	
“payment default”
    	
 
    	
6.01(a)(5)(a)
    
	
“PDF”
    	
 
    	
14.19
    
	
“Reinstatement Date”
    	
 
    	
4.14(b)
    
	
“Restricted Payment”
    	
 
    	
4.06(a)
    
	
“Security Register”
    	
 
    	
2.05(b) of Base Indenture
    
	
“Successor Company”
    	
 
    	
5.01(a)
    
	
“Successor Guarantor”
    	
 
    	
5.01(c)
    
	
“Suspended Covenants”
    	
 
    	
4.14(a)
    
	
“Suspension Period”
    	
 
    	
4.14(b)
    

 

Section 1.03.   Rules of Construction.

 

Unless the context otherwise requires:

 

(1)                                 a term defined in Section 1.01 or 1.02 has the meaning assigned to it therein, and a term used herein that is defined in the Trust Indenture Act, either directly or by reference therein, shall have the meaning assigned to it therein;

 

(2)                                 an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(3)                                 “or” is not exclusive;

 

(4)                                 words in the singular include the plural, and words in the plural include the singular;

 

(5)                                 provisions apply to successive events and transactions;

 

(6)                                 unless the context otherwise requires, any reference to an “Appendix,” “Article,” “Section,” “clause,” “Schedule” or “Exhibit” refers to an Appendix, Article, Section, clause, Schedule or Exhibit, as the case may be, of this Indenture;

 

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

 

(8)                                 “including” means including without limitation;

 

(9)                                 references to sections of, or rules under, the Securities Act, the Exchange Act or the Trust Indenture Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

 

38

 

(10)                          unless otherwise provided, references to agreements and other instruments shall be deemed to include all amendments and other modifications to such agreements or instruments, but only to the extent such amendments and other modifications are not prohibited by the terms of this Indenture; and

 

(11)                          in the event that a transaction meets the criteria of more than one category of permitted transactions or listed exceptions, the Company may classify such transaction as it, in its sole discretion, determines.

 

Section 1.04.   Incorporation by Reference of Trust Indenture Act.

 

Whenever this Indenture refers to a provision of the Trust Indenture Act as applicable to this Indenture, the provision is incorporated by reference in and made a part of this Indenture.

 

The following Trust Indenture Act term used in this Indenture has the following meaning:

 

“obligor” on the Notes and the Subsidiary Guarantees means the Company and the Subsidiary Guarantors, respectively, and any successor obligor upon the Notes and the Subsidiary Guarantees, respectively.

 

All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by SEC rule under the Trust Indenture Act have the meanings so assigned to them.

 

Section 1.05.   Status of Base Indenture.

 

The amendments and other modifications of the Base Indenture set forth in this Second Supplemental Indenture shall apply solely for purposes of the Notes and not for purposes of any other Securities.  Any provision of the Base Indenture amended or otherwise modified by this Second Supplemental Indenture shall apply to the Notes as so amended or modified, and any provision of the Base Indenture not amended or modified by this Second Supplemental Indenture shall apply to the Notes unless otherwise specifically stated in this Second Supplemental Indenture.

 

ARTICLE 2

 

THE NOTES

 

Section 2.01.   Designation, Principal Amount and Issuance. There is hereby authorized a series of Securities designated as the 6.625% Senior Notes due 2021, in an aggregate initial principal amount of $400,000,000, except for Notes authenticated, executed and delivered upon registration of transfer of, in exchange for, or in lieu of, other Notes pursuant to Section 2.05, Section 2.06, Section 2.07 or Section 9.04 of the Base Indenture. The Notes, upon execution of this Second Supplemental Indenture, shall be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Notes in accordance with an Officers’ Certificate. The Notes shall be senior obligations of the Company.

 

Additional Notes ranking pari passu with the Initial Notes may be created and issued from time to time by the Company without notice to or consent of the Holders and shall be consolidated with and form a single class with the Initial Notes and shall have the same terms as to status, redemption or otherwise (other than issue date, issue price and, if applicable, the first interest payment date and the initial interest accrual date); provided that the Company’s ability to issue Additional Notes shall be 

 

39

 

subject to the Company’s compliance with Section 4.08. Any Additional Notes shall be issued with the benefit of an indenture supplemental to this Indenture.

 

Section 2.02.   Form, Payment and Appointment.

 

(a)                                 Provisions relating to the Initial Notes, Additional Notes and any other Notes issued under this Indenture are set forth in Appendix A hereto, which is hereby incorporated in and expressly made a part of this Indenture.  The Notes and the Trustee’s certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture.  The Notes may have notations, legends or endorsements required by law, rules or agreements with national securities exchanges to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company).

 

(b)                                 The Notes will be Global Securities and will initially be issued in fully registered, permanent global form without coupons (a “Global Note”), and the Depositary shall be DTC or such other depositary as any Officer of the Company may from time to time designate. Solely for purposes of the Notes and not for purposes of any other Securities, the Base Indenture is hereby modified to provide that each Global Note shall bear the Global Notes Legend rather than the legend set forth in Section 2.11(a)(iv) of the Base Indenture.

 

(c)                                  Installments on the Notes will be payable, the transfer of such Notes will be registrable and such Notes will be exchangeable for Notes of a like aggregate principal amount bearing identical terms and provisions, at the office or agency of the Company, which shall initially be the Corporate Trust Office of the Trustee.

 

(d)                                 The Security Registrar and Paying Agent for the Notes shall initially be the Trustee.

 

(e)                                  The Notes shall be issuable in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

Section 2.03.   Security Registrar and Paying Agent.

 

(a)                                 The Company shall maintain at least one office or agency where Notes may be presented for payment (“Paying Agent”).  The Company may appoint one or more additional paying agents.  The term “Paying Agent” includes any additional paying agent.  The Company may change any Paying Agent or Securities Registrar without prior notice to any Holder.  The Company shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture.  If the Company fails to appoint or maintain another entity as Security Registrar or Paying Agent, the Trustee shall act as such.  The Company or any of its Restricted Subsidiaries may act as Paying Agent or Security Registrar.

 

(b)                                 The Company initially appoints The Depository Trust Company to act as Depositary with respect to the Global Notes.

 

Section 2.04.   Paying Agent to Hold Money in Trust.

 

The Company shall, no later than 11:00 a.m. (New York City time) on each due date for the payment of principal, premium, if any, and interest on any of the Notes, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held in trust for the Holders entitled to the same, and (unless such Paying Agent is the Trustee) the Company shall promptly notify the Trustee of its action or failure so to act.  The Company shall require each Paying Agent other than the Trustee to agree in writing 

 

40

 

that such Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by such Paying Agent for the payment of principal, premium, if any, and interest on the Notes.  While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee.  The Company at any time may require a Paying Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, a Paying Agent shall have no further liability for the money.  If the Company or a Subsidiary of the Company acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent.  Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes.

 

Section 2.05.   Outstanding Notes.

 

(a)                              The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.06 as not outstanding.  Except as set forth in Section 2.07, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.

 

(b)                                 If a Note is replaced pursuant to Section 2.07 of the Base Indenture, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser, as such term is defined in Section 8-303 of the Uniform Commercial Code in effect in the State of New York.

 

(c)                                  If the principal amount of any Note is considered paid under Section 4.01 of the Base Indenture, it ceases to be outstanding and interest on it ceases to accrue from and after the date of such payment.

 

(d)                                 If a Paying Agent (other than the Company, a Subsidiary of the Company or an Affiliate of any thereof) holds, on the maturity date, any redemption date or any date of purchase pursuant to an Offer to Purchase, money sufficient to pay Notes payable or to be redeemed or purchased on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest.

 

Section 2.06.   Treasury Notes.

 

In determining whether the Holders of the requisite principal amount of Notes have concurred in any direction, waiver or consent, Notes beneficially owned by the Company, or by any Affiliate of the Company, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee knows are so owned shall be so disregarded.  Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right to deliver any such direction, waiver or consent with respect to the Notes and that the pledgee is not the Company or any obligor upon the Notes or any Affiliate of the Company or of such other obligor.

 

41

 

ARTICLE 3

 

REDEMPTION

 

Section 3.01.   Notice of Redemption.

 

Solely for purposes of the Notes and not for purposes of any other Securities, the first sentence of Section 3.02(a) of the Base Indenture is hereby amended by replacing such sentence with the following sentences:

 

In case the Company shall desire to exercise such right to redeem all or, as the case may be, a portion of the Notes in accordance with the right reserved so to do, the Company shall, or shall cause the Trustee to, give notice of such redemption to the Holders, with a copy to the Trustee, at least 30 and not more than 60 days prior to the applicable redemption date mailed by first class mail, postage prepaid, to each Holder’s registered address or in accordance with the Applicable Procedures.  Notwithstanding the foregoing, redemption notices may be mailed or otherwise provided more than 60 days prior to a redemption date if such notice is issued in connection with the discharge of the obligations of the Company and the Subsidiary Guarantors under the Notes pursuant to the Company’s exercise of the defeasance or satisfaction and discharge provisions under this Indenture.

 

In addition, solely for purposes of the Notes and not for purposes of any other Securities, the first paragraph of Section 3.02(b) of the Base Indenture is hereby amended by replacing such paragraph with the following:

 

If less than all the Securities of a series are to be redeemed, the Company shall give the Trustee at least 45 days’ notice in advance of the date fixed for redemption (or such shorter notice period as the Trustee may agree) as to the aggregate principal amount of Notes to be redeemed, and thereupon the Trustee shall select the Notes for redemption in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not listed, then on as nearly a pro rata basis as possible or by lot or such other similar method in accordance with the Applicable Procedures (subject to such rounding as may be necessary so that Notes are redeemed in whole increments of $1,000 and no Note of $2,000 in original principal amount or less will be redeemed in part), and the Trustee shall thereafter promptly notify the Company in writing of the numbers of the Notes to be redeemed, in whole or in part.

 

Section 3.02.   Deposit of Redemption or Purchase Price.

 

(a)                                 No later than 11:00 a.m. (New York City time) on the redemption or purchase date (or such later time as such date to which the Trustee may reasonably agree), the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued and unpaid interest on all Notes to be redeemed or purchased on that date.  The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption or purchase price of, and accrued and unpaid interest on, all Notes to be redeemed or purchased.  Solely for purposes of the Notes and not for purposes of any other Securities, the last sentence of Section 3.03(a) of the Base Indenture is hereby amended and restated in its entirety as follows:

 

On presentation and surrender of the Notes on or after the date fixed for redemption at the place of payment specified in the notice, the Notes shall be paid and redeemed at the applicable redemption price, together with interest accrued thereon to the date fixed for redemption (but if the date fixed for redemption is on or after a Record Date and on or before the related Interest Payment Date, the accrued and unpaid interest, if any, will be paid to the Person in whose name the Note is registered at the close of 

 

42

 

business on such Record Date, and no additional interest shall be payable to Holders whose Notes will be subject to redemption by the Company).

 

(b)                                 If the Company complies with the provisions of Section 3.03 of the Base Indenture and Section 3.02(a), on and after the redemption or purchase date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption or purchase.  If any Note called for redemption or purchase shall not be so paid upon surrender for redemption or purchase because of the failure of the Company to comply with Section 3.02(a), interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and, to the extent lawful, on any interest accrued to the redemption or purchase date but not paid on such unpaid principal, in each case at the rate provided in the Notes.

 

Section 3.03.   Optional Redemption.

 

(a)                                 At any time prior to July 15, 2017, the Company may redeem the Notes, in whole or in part, on any one or more occasions, at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).

 

(b)                                 The Company may on any one or more occasions prior to July 15, 2016 redeem up to 35% of the original principal amount of the Notes (including any Additional Notes) with the Net Cash Proceeds of one or more Equity Offerings at a redemption price equal to 106.625% of the principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided that (1) at least 65% of the original principal amount of the Notes (including any Additional Notes) remains outstanding after each such redemption; and (2) the redemption occurs within 90 days after the closing of such Equity Offering.

 

(c)                                  Except pursuant to clause (a) or (b) of this Section 3.03, the Notes shall not be redeemable at the Company’s option prior to July 15, 2017.

 

(d)                                 On and after July 15, 2017, the Company may redeem all or, from time to time, a part of the Notes at the following redemption prices (expressed as a percentage of principal amount of the Notes to be redeemed) plus accrued and unpaid interest on the Notes, if any, to, but excluding, the applicable redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant Interest Payment Date), if redeemed during the twelve-month period beginning on July 15 of the years indicated below:

 

	
Year
    	
 
    	
Percentage
    	
 
    
	
2017   
    	
 
    	
103.313
    	
%
    
	
2018   
    	
 
    	
101.656
    	
%
    
	
2019   and thereafter 
    	
 
    	
100.000
    	
%
    

 

(e)                                  Any redemption pursuant to this Section 3.03 shall be made pursuant to the provisions of Sections 3.01 through 3.05 of the Base Indenture, as amended hereby.

 

(f)                                   Any redemption notice in connection with this Section 3.03 may, at the Company’s discretion, be subject to one or more conditions precedent, including completion of an Equity Offering or other corporate transaction.

 

43

 

Section 3.04.   Mandatory Redemption.

 

The Company will not be required to make mandatory redemption or sinking fund payments with respect to the Notes.  Sections 3.04, 3.05 and 3.06 of the Base Indenture shall not apply to the Notes.

 

Section 3.05.   Offers to Repurchase by Application of Excess Proceeds.

 

(a)                                 In the event that, pursuant to Section 4.09, the Company is required to commence an Asset Disposition Offer, the Company will follow the procedures specified below.

 

(b)                                 The Asset Disposition Offer will remain open for a period of 20 Business Days following its commencement, except to the extent that a longer period is required by applicable law (the “Asset Disposition Offer Period”). No later than five Business Days after the termination of the Asset Disposition Offer Period (the “Asset Disposition Purchase Date”), the Company will purchase the principal amount of Notes required to be purchased pursuant to Section 4.09 (the “Asset Disposition Offer Amount”) or, if less than the Asset Disposition Offer Amount has been so validly tendered and not properly withdrawn, all Notes validly tendered in response to the Asset Disposition Offer. Payment for any Notes so purchased will be made in the same manner as interest payments on the Notes are made.

 

(c)                                  If the Asset Disposition Purchase Date is on or after a Record Date and on or before the related Interest Payment Date, any accrued and unpaid interest up to but excluding the Asset Disposition Purchase Date, shall be paid to the Person in whose name a Note is registered at the close of business on such Record Date.

 

(d)                                 Upon the commencement of an Asset Disposition Offer, the Company shall send a notice (or, in the case of Global Notes, otherwise communicate in accordance with the Applicable Procedures) to each of the Holders, with a copy to the Trustee.  The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Disposition Offer.  The Asset Disposition Offer shall be made to all Holders and, if required, all holders of Pari Passu Indebtedness.  The notice, which shall govern the terms of the Asset Disposition Offer, shall state:

 

(1)                                 that the Asset Disposition Offer is being made pursuant to this Section 3.05 and Section 4.09 and the length of time the Asset Disposition Offer shall remain open;

 

(2)                                 the Asset Disposition Offer Amount, the purchase price, including the portion thereof representing any accrued and unpaid interest, and the Asset Disposition Purchase Date;

 

(3)                                 that any Note not properly tendered or accepted for payment shall continue to accrue interest;

 

(4)                                 that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Disposition Offer will cease to accrue interest on and after the Asset Disposition Purchase Date;

 

(5)                                 that Holders electing to have a Note purchased pursuant to an Asset Disposition Offer may elect to have Notes purchased in integral multiples of $1,000 only (except that no Note will be purchased in part if the remaining principal amount would be less than $2,000);

 

(6)                                 that Holders electing to have a Note purchased pursuant to any Asset Disposition Offer shall be required to surrender the Note, with the form entitled “Option of Holder to Elect

 

44

 

 

Purchase” attached to the Note completed, or transfer by book-entry transfer, to the Company, the Depositary, if applicable, or a Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Asset Disposition Purchase Date;

 

(7)                                 that Holders shall be entitled to withdraw their election if the Company, the Depositary or the Paying Agent, as the case may be, receives at the address specified in the notice, not later than the expiration of the Asset Disposition Offer Period, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes the Holder tendered for purchase and a statement that such Holder is withdrawing its tendered Notes and its election to have such Note purchased;

 

(8)                                 that, if the aggregate principal amount of Notes and Pari Passu Indebtedness surrendered by the Holders thereof exceeds the Asset Disposition Offer Amount, then the Notes and such Pari Passu Indebtedness will be purchased on a pro rata basis based on the aggregate accreted value or principal amount, as applicable, of the Notes or such Pari Passu Indebtedness tendered, and the selection of the Notes for purchase shall be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not listed, then on as nearly a pro rata basis as possible (subject to such rounding as may be necessary so that Notes are redeemed in whole increments of $1,000 and no Note of $2,000 in original principal amount or less will be redeemed in part); and

 

(9)                                 that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) representing the same Indebtedness to the extent not repurchased.

 

(e)                                  On or before the Asset Disposition Purchase Date, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Asset Disposition Offer Amount of Notes or portions of Notes validly tendered and not properly withdrawn pursuant to the Asset Disposition Offer, or if less than the Asset Disposition Offer Amount has been validly tendered and not properly withdrawn, all Notes validly tendered and not properly withdrawn, in each case in minimum denominations of $1,000 (except that no Note will be purchased in part if the remaining principal amount would be less than $2,000). The Company or the Paying Agent, as the case may be, will promptly (but in any case not later than five Business Days after termination of the Asset Disposition Offer Period) mail or deliver (or cause to be transferred by book-entry) to each tendering Holder of Notes an amount equal to the purchase price of the Notes validly tendered and not properly withdrawn by such holder and accepted by the Company for purchase, and the Company will promptly issue a new Note, and the Trustee, upon receipt of an Officers’ Certificate from the Company, will authenticate and mail or deliver such new Note to such Holder (it being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel will be required for the Trustee to authenticate and mail or deliver such new Note), in a principal amount equal to any unpurchased portion of the Note surrendered; provided that each such new Note will be in a minimum principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. Any Note not so accepted will be promptly mailed or delivered by the Company to the Holder thereof.  The Company will publicly announce the results of the Asset Disposition Offer on the Asset Disposition Purchase Date.

 

(f)                                   Other than as specifically provided in this Section 3.05 or Section 4.09, any purchase pursuant to this Section 3.05 shall be made pursuant to the applicable provisions of Sections 3.01 through 3.06 of the Base Indenture, as amended hereby.

 

45

 

ARTICLE 4

 

COVENANTS

 

Section 4.01.   Payment of Principal, Premium and Interest.

 

(a)                                 Solely for purposes of the Notes and not for purposes of any other Securities, the second sentence of Section 4.01(a) of the Base Indenture is hereby amended and restated in its entirety as follows:

 

An installment of principal, premium, if any, or interest shall be considered paid on the applicable due date if on such date the Paying Agent, if other than the Company or a Restricted Subsidiary, holds as of 11:00 a.m. (New York City) time, in accordance with this Indenture, money sufficient to pay all of such installment then due.

 

In addition, solely for purposes of the Notes and not for purposes of any other Securities, Section 4.01(a) of the Base Indenture is further amended by adding the following sentence at the end thereof:

 

The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, at the rate equal to the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful.

 

(b)                                 Section 4.01(b) of the Base Indenture relating to Deferral Periods (as defined in the Base Indenture) shall not apply to the Notes.

 

Section 4.02.   Maintenance of Office or Agency(a)            .

 

The Company has initially designated the Corporate Trust Office of the Trustee as the “Place of Payment” for purposes of Section 4.02 of the Base Indenture.

 

Section 4.03.   Statement by Officers as to Default(a)  .

 

Solely for purposes of the Notes and not for purposes of any other Securities, Section 4.04 of the Base Indenture is hereby amended and restated in its entirety as follows:

 

The Company and each Subsidiary Guarantor (to the extent that such Subsidiary Guarantor is so required under the Trust Indenture Act) will deliver to the Trustee, within 120 days after the end of each fiscal year ending after the Issue Date, a certificate from the principal executive officer, principal financial officer or principal accounting officer stating that a review of the activities of the Company and the Restricted Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officer with a view to determining whether the Company and each Subsidiary Guarantor have kept, observed, performed and fulfilled their obligations under this Indenture, and further stating, as to such Officer signing such certificate, that to the best of his or her knowledge, the Company and each Subsidiary Guarantor have kept, observed, performed and fulfilled each and every condition and covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions, covenants and conditions of this Indenture (or, if a Default shall have occurred, describing all such 

 

46

 

Defaults of which he or she may have knowledge and what action the Company and each Subsidiary Guarantor are taking or propose to take with respect thereto).

 

When any Default has occurred and is continuing under this Indenture, or if the Trustee or the holder of any other evidence of Indebtedness of the Company or any Subsidiary of the Company gives any notice or takes any other action with respect to a claimed Default, the Company will promptly (which shall be within 30 days after the knowledge thereof if such event is still continuing) send to the Trustee an Officers’ Certificate specifying such event, its status and what action the Company is taking or proposes to take with respect thereof.

 

Section 4.04.   Stay, Extension and Usury Laws.

 

The Company and each Subsidiary Guarantor 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 wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and each Subsidiary Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenant that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted.

 

Section 4.05.   Reports and Other Information.

 

(a)                                 Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will furnish to the Trustee and the registered Holders of the Notes, within 15 days of the applicable time periods specified in the relevant forms: (1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such Forms, including a “Management’s discussion and analysis of financial condition and results of operations” and, with respect to the annual information only, a report on the annual financial statements by the Company’s independent registered public accounting firm; and (2) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports; provided, however, that to the extent such reports are filed with the SEC and publicly available, such reports shall have been deemed to have been provided to the Trustee and the Holders and no additional copies need to be provided to the Trustee and the Holders.

 

(b)                                 If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries and such Unrestricted Subsidiaries, either individually or collectively, would otherwise have been a Significant Subsidiary, then the quarterly and annual financial information required by Section 4.05(a) shall include a summary presentation, in the footnotes to the financial statements, of the financial condition and results of operations of the Company and the Restricted Subsidiaries.

 

(c)                                  Unless such reports are otherwise filed with the SEC, the Company shall maintain a website to which all of the reports and press releases required by this Section 4.05 are posted to which access will be given to the Trustee, and Holders, prospective purchasers of the Notes, securities analysts and market making institutions that certify their status as such to the reasonable satisfaction of the Company.

 

(d)                                 In addition, if at any time any direct or indirect parent company of the Company guarantees the Notes (there being no obligation of any such parent to do so), such entity holds no material 

 

47

 

assets other than cash, cash equivalents and the Capital Stock of the Company or any other direct or indirect parent of the Company (and performs the related incidental activities associated with such ownership) and would comply with the requirements of Rule 3-10 of Regulation S-X promulgated by the SEC (or any successor provision), the reports, information and other documents required to be furnished to Holders pursuant to this Section 4.05 may, at the option of the Company, be furnished by and be those of such parent rather than the Company.

 

(e)                                  Any and all Defaults or Events of Default arising from a failure to furnish or file in a timely manner a report required by this Section 4.05 shall be deemed cured (and the Company shall be deemed to be in compliance with this Section 4.05) upon furnishing or filing such report or certification as contemplated by this Section 4.05 (but without regard to the date on which such report or certification is so furnished or filed); provided that such cure shall not otherwise affect the rights of the Holders pursuant to Article VI of the Base Indenture, as amended by Article 6 of this Second Supplemental Indenture, if the principal, premium, if any, and accrued interest have been accelerated in accordance with the terms of this Indenture and such acceleration has not been rescinded or cancelled prior to such cure.

 

Section 4.06.   Limitation on Restricted Payments.

 

(a)                                 Unless the Debt to Total Capitalization Ratio as of the last day of the Company’s most recently ended fiscal quarter for which internal financial statements are available that immediately precedes the date of any Restricted Payment, calculated immediately after giving effect to such Restricted Payment and any related transactions on a pro forma basis, is equal to or less than 17.5%, the Company will not, and will not permit any of the Restricted Subsidiaries, directly or indirectly, to:

 

(1)                                 declare or pay any dividend or make any distribution (whether made in cash, securities or other property) on or in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) other than:

 

(a)                                 dividends or distributions payable solely in Capital Stock of the Company (other than Disqualified Stock) or in options, warrants or other rights to purchase such Capital Stock of the Company; and

 

(b)                                 dividends or distributions by a Restricted Subsidiary payable to the Company or another Restricted Subsidiary (and if such Restricted Subsidiary is not a Wholly Owned Subsidiary, to its other holders of any series or class of Capital Stock on a pro rata basis in respect of such series or class or on a basis that results in the receipt by the Company or a Restricted Subsidiary of dividends or distributions of a greater value than it would receive on a pro rata basis);

 

(2)                                 purchase, redeem, retire or otherwise acquire for value any Capital Stock of the Company held by Persons other than the Company or a Restricted Subsidiary (other than in exchange for Capital Stock of the Company (other than Disqualified Stock)); provided that, for the avoidance of doubt, the redemption price or repurchase price paid in cash in connection with any redemption or repurchase of any convertible or exchangeable debt securities (other than Subordinated Obligations) shall not constitute a Restricted Payment;

 

(3)                                 make any principal payment on, or purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled maturity, scheduled repayment or 

 

48

 

scheduled sinking fund payment, any Subordinated Obligations other than the purchase, repurchase, redemption, defeasance or other acquisition of (a) any Subordinated Obligations in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase, redemption, defeasance or acquisition or (b) Indebtedness of the Company owing to and held by any Subsidiary Guarantor or Indebtedness of a Subsidiary Guarantor owing to and held by the Company or any other Subsidiary Guarantor permitted to be Incurred pursuant to Section 4.08(b)(4); or

 

(4)                                 make any Restricted Investment

 

(all such payments and other actions referred to in clauses (1) through (4) above (other than any exception thereto) shall be referred to as a “Restricted Payment”), unless, at the time of and after giving effect to such Restricted Payment:

 

(A)                               no Default shall have occurred and be continuing (or would result therefrom);

 

(B)                               immediately after giving effect to such transaction on a pro forma basis, (1) the Company could Incur $1.00 of additional Indebtedness under Section 4.08(a); and (2) the Aggregate RBC Ratio exceeds 225%;

 

(C)                               the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made subsequent to the Issue Date (excluding Restricted Payments made pursuant to Section 4.06(b)(1), (2), (3), (5), (6), (7), (8), (9), (10), (12), (13), (14), (15) and (16)) would not exceed the sum of, without duplication:

 

(i)                                     50% of the Net Excess Cash Flow for the period (taken as one accounting period) beginning with the first day of the fiscal quarter in which the Issue Date occurs to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the case such Net Excess Cash Flow for such period is a deficit, minus 100% of such deficit), plus

 

(ii)                                100% of the aggregate Net Cash Proceeds and the Fair Market Value of marketable securities or other property received by the Company or a Restricted Subsidiary from the issue or sale of its Capital Stock (other than Disqualified Stock) or other capital contributions subsequent to the Issue Date, other than:

 

(A)                               Net Cash Proceeds received from an issuance or sale of such Capital Stock to a Subsidiary of the Company or to an employee stock ownership plan, option plan or similar trust to the extent such sale to an employee stock ownership plan, option plan or similar trust is financed by loans from or Guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination; and

 

(B)                               Net Cash Proceeds received by the Company from the issue and sale of its Capital Stock or capital contributions to the extent applied to redeem Notes in compliance with Section 3.03(b); plus

 

(iii)                             the amount by which Indebtedness of the Company and the Restricted Subsidiaries is reduced on the Company’s consolidated balance sheet upon the 

 

49

 

conversion or exchange subsequent to the Issue Date of any Indebtedness of the Company or the Restricted Subsidiaries for Capital Stock (other than Disqualified Stock) of the Company (less the amount of any cash, or the Fair Market Value of any other property, distributed by the Company upon such conversion or exchange); plus

 

(iv)                             100% of the Net Cash Proceeds and the Fair Market Value of property other than cash and marketable securities from the sale or other disposition (other than to the Company or a Restricted Subsidiary) of Restricted Investments made after the Issue Date and redemptions and repurchases of such Restricted Investments from the Company or the Restricted Subsidiaries and repayment of Restricted Investments in the form of loans or advances from the Company and the Restricted Subsidiaries and releases of Guarantees that constitute Restricted Investments by the Company and the Restricted Subsidiaries; plus

 

(v)                                100% of the Net Cash Proceeds and the Fair Market Value of property other than cash and marketable securities received by the Company or the Restricted Subsidiaries from the sale (other than to the Company or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary (other than in each case to the extent the Investment in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to Section 4.06(b)(11) or (20) or to the extent such Investment constituted a Permitted Investment); plus

 

(vi)                              to the extent that any Unrestricted Subsidiary designated as such after the Issue Date is redesignated as a Restricted Subsidiary or any Unrestricted Subsidiary merges into or consolidates with the Company or any of the Restricted Subsidiaries or any Unrestricted Subsidiary transfers, dividends or distributes assets to the Company or a Restricted Subsidiary, in each case after the Issue Date, the Fair Market Value of such Subsidiary as of the date of such redesignation or such merger or consolidation, or in the case of the transfer, dividend or distribution of assets of an Unrestricted Subsidiary to the Company or a Restricted Subsidiary, the Fair Market Value of such assets of the Unrestricted Subsidiary, as determined at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary or at the time of such merger, consolidation or transfer, dividend or distribution of assets (other than an Unrestricted Subsidiary to the extent the Investment in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to Section 4.06(b)(11) or (20) of or to the extent such Investment constituted a Permitted Investment).

 

(b)                                 The provisions of Section 4.06(a) will not prohibit:

 

(1)                                 any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Capital Stock, Disqualified Stock or Subordinated Obligations or any Restricted Investment made in exchange for, or out of the proceeds of a contribution to the common equity capital of the Company or the substantially concurrent sale of, Capital Stock of the Company (other than (x) Disqualified Stock and (y) Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan, option plan or similar trust to the extent such sale to an employee stock ownership plan, option plan or similar trust is financed by loans from or Guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of 

 

50

 

determination); provided, however, that the Net Cash Proceeds from such contribution or sale of Capital Stock will be excluded from Section 4.06(a)(C)(ii);

 

(2)                                 any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations made in exchange for, or out of the proceeds of the substantially concurrent Incurrence of, Refinancing Indebtedness;

 

(3)                                 any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Disqualified Stock of the Company or a Restricted Subsidiary made in exchange for, or out of the proceeds of the substantially concurrent sale of Disqualified Stock of the Company or such Restricted Subsidiary, as the case may be, so long as such Disqualified Stock is permitted to be Incurred pursuant to Section 4.08;

 

(4)                                 dividends paid or redemptions made within 60 days after the date of declaration or the giving of the redemption notice if at such date of declaration or notice such dividend or redemption would have complied with this provision;

 

(5)                                 the purchase, repurchase, redemption or other acquisition (including by cancellation of indebtedness), cancellation or retirement for value of Capital Stock, or options, warrants, equity appreciation rights or other rights to purchase or acquire Capital Stock of the Company held by any existing or former employees, management or directors of or consultants to the Company or any Subsidiary of the Company or their assigns, estates or heirs, in each case in connection with the repurchase or payment provisions under employee stock option or stock purchase agreements or other compensatory agreements approved by the Board of Directors of the Company or the compensation committee thereof; provided that such purchases, repurchases, redemptions, acquisitions, cancellations or retirements pursuant to this clause (5) will not exceed $5.0 million in the aggregate during any calendar year (with any unused amounts in a given calendar year being available in succeeding calendar years so long as the amount does not exceed $10.0 million in any given calendar year); provided that amount in any calendar year (with any unused amounts in a given calendar year being available in succeeding calendar years) may be increased by an amount not to exceed:

 

(a)                                 the Net Cash Proceeds from the sale of Capital Stock (other than Disqualified Stock) of the Company to existing or former employees or members of management of the Company or any of its Subsidiaries that occurs after the Issue Date, to the extent the Net Cash Proceeds from the sale of such Capital Stock have not otherwise been applied to the payment of Restricted Payments (provided that the Net Cash Proceeds from such sales will be excluded from Section 4.06(a)(C)(ii)); plus

 

(b)                                 the cash proceeds of key man life insurance policies received by the Company or its Restricted Subsidiaries after the Issue Date relating to the Company’s or such Restricted Subsidiaries’ key persons who are so insured; less

 

(c)                                  the amount of any Restricted Payments previously made with the Net Cash Proceeds described in clauses (a) and (b) of this clause (5);

 

provided that cancellation of Indebtedness owing to the Company or any Restricted Subsidiary from any existing or former employees, management, directors or consultants of the Company or any Restricted Subsidiary in connection with a repurchase of Capital 

 

51

 

Stock of the Company will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of this Indenture;

 

(6)                                 the accrual, declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary or Preferred Stock of any Restricted Subsidiary issued in accordance with the terms of this Indenture to the extent such dividends are included in the definition of Fixed Charges and payment of any redemption price or liquidation value of any such Disqualified Stock or Preferred Stock when due at final maturity in accordance with its terms;

 

(7)                                 repurchases or other acquisitions of Capital Stock deemed to occur (i) upon the exercise of stock options, warrants, restricted stock units or other rights to purchase Capital Stock or other convertible securities if such Capital Stock represents a portion of the exercise price thereof or conversion price thereof or (ii) in connection with withholdings or similar taxes payable by any future, present or former employee, director or officer;

 

(8)                                 the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Obligations at a purchase price not greater than 101% of the principal amount of (plus accrued and unpaid interest on) such Subordinated Obligation in the event of a Change of Control in accordance with provisions similar to those set forth in Section 4.12; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made a Change of Control Offer under this Indenture and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer under this Indenture;

 

(9)                                 cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of the Company or other exchanges of securities of the Company or a Restricted Subsidiary in exchange for Capital Stock of the Company;

 

(10)                          the purchase, repurchase, redemption, acquisition or retirement of Subordinated Obligations with unutilized Excess Proceeds remaining after an Asset Disposition Offer pursuant to Section 4.09;

 

(11)                          other Restricted Payments not to exceed $50.0 million in the aggregate since the Issue Date;

 

(12)                          the purchase of fractional shares of Capital Stock of the Company arising out of stock dividends, splits or combinations or mergers, consolidations or other acquisitions;

 

(13)                          in connection with any acquisition by the Company or any of its Subsidiaries, the receipt or acceptance of the return to the Company or any of the Restricted Subsidiaries of Capital Stock of the Company constituting a portion of the purchase price consideration in settlement of indemnification claims or as a result of a purchase price adjustment (including earn outs or similar obligations);

 

(14)                          the distribution of rights pursuant to any shareholder rights plan or the redemption of such for nominal consideration in accordance with the terms of any shareholder rights plan;

 

52

 

(15)                          payments or distributions to stockholders pursuant to appraisal rights required under applicable law in connection with any merger, consolidation or other acquisition by the Company or any Restricted Subsidiary;

 

(16)                          the distribution or transfer, as a dividend, Investment or otherwise, of shares of Capital Stock of Unrestricted Subsidiaries;

 

(17)                          the declaration and payment of dividends on the Company’s Common Stock in an amount not to exceed $15.0 million in the aggregate during any calendar year;

 

(18)                          any payment of cash by the Company or any Subsidiary issuer to a holder of Existing Convertible Notes upon conversion or exchange of the Existing Convertible Notes which cash payment (i) is required pursuant to the terms of the Convertible 2009 Debt Documents or the Convertible 2010 Debt Documents, as the case may be (including, without limitation, due to an election of the holder of such Existing Convertible Notes in accordance with the terms thereof), as in effect on the Issue Date and (ii) in the case of the Convertible 2009 Debt, does not exceed an amount equal to the principal amount of the Convertible 2009 Debt that is converted or exchanged and any accrued interest paid thereon;

 

(19)                          (i) the purchase of any Permitted Bond Hedge or (ii) any cash payment made in connection with the exercise or early termination of the Convertible 2010 Debt Hedges which cash payment is required pursuant to the terms of the Convertible 2010 Debt Hedges, as in effect on the Issue Date; and

 

(20)                          Investments in Unrestricted Subsidiaries having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (20) that are at the time outstanding, not to exceed $5.0 million at the time of such investment; provided, that the dollar amount of Investments made pursuant to this clause (20) may be reduced by the Fair Market Value of the proceeds received by the Company and/or the Restricted Subsidiaries from the subsequent sale, disposition or other transfer of such Investments (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

 

provided, however, that at the time of and after giving effect to any Restricted Payment permitted under Section 4.06(b)(8), (10), (11), (15) and (17), no Default shall have occurred and be continuing or would occur as a consequence thereof.

 

(c)                                  The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of such Restricted Payment of the assets or securities proposed to be paid, transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment. The Fair Market Value of any cash Restricted Payment shall be its face amount, and any non-cash Restricted Payment shall be determined conclusively in Good Faith by the Company.

 

(d)                                 For purposes of determining compliance with this Section 4.06, in the event that a proposed Restricted Payment (or portion thereof) meets the criteria of more than one of the categories of Restricted Payments described in Section 4.06(b)(1) through (20) above, or is entitled to be made pursuant to Section 4.06(a), the Company will be entitled to divide and classify such Restricted Payment (or portion thereof) on the date of its payment in any manner that complies with this Section 4.06.

 

53

 

(e)                                  If the Company or any Restricted Subsidiary makes a Restricted Investment or a Permitted Investment and the Person in which such Investment was made subsequently becomes a Restricted Subsidiary, to the extent such Investment resulted in a reduction of the amounts calculated pursuant to Section 4.06(a) or any other provision of this Section 4.06 or the definition of Permitted Investment (which was not subsequently reversed), then such amount shall be increased by the amount of such reduction to the extent of the lesser of (x) the amount of such Investment and (y) the Fair Market Value of such Investment at the time such Person becomes a Restricted Subsidiary.

 

(f)                                   The Company will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the last sentence of the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Company and the Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the definition of “Investment.” Such designation will be permitted only if a Restricted Payment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

 

Section 4.07.   Limitation on Restrictions on Distribution From Restricted Subsidiaries.

 

(a)                                 The Company will not, and will not permit any Restricted Subsidiary to create or otherwise cause or permit to exist any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

 

(1)                                 (A) pay dividends or make any other distributions on its Capital Stock to the Company or any of the Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits or (B) pay any Indebtedness or other obligations owed to the Company or any Restricted Subsidiary (it being understood that the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on Common Stock shall not be deemed a restriction on the ability to make distributions on Capital Stock);

 

(2)                                 make any loans or advances to the Company or any Restricted Subsidiary (it being understood that the subordination of loans or advances made to the Company or any Restricted Subsidiary to other Indebtedness Incurred by the Company or any Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances); or

 

(3)                                 sell, lease or transfer any of its property or assets to the Company or any Restricted Subsidiary (it being understood that such transfers shall not include any type of transfer described in clause (1) or (2) above).

 

(b)                                 The preceding provisions will not prohibit encumbrances or restrictions existing under or by reason of:

 

(i)            any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date, including, without limitation, this Indenture, the Notes, the Subsidiary Guarantees and the Senior Credit Agreement in effect on such date;

 

(ii)                                any encumbrance or restriction with respect to a Person or assets pursuant to an agreement in effect on or before the date on which such Person became a Restricted Subsidiary or was acquired by, merged into or consolidated with the

 

54

 

 

Company or a Restricted Subsidiary (other than Capital Stock or Indebtedness Incurred as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was acquired by, merged into or consolidated with the Company or in contemplation of the transaction) or such assets were acquired by the Company or any Restricted Subsidiary; provided that any such encumbrance or restriction shall not extend to any Person or the assets or property of the Company or any other Restricted Subsidiary other than the Person and its Subsidiaries or the assets and property so acquired and that, in the case of Indebtedness, was permitted to be Incurred pursuant to this Indenture;

 

(iii)                             any encumbrance or restriction pursuant to an agreement effecting a Refinancing of Indebtedness incurred pursuant to an agreement referred to in clause (i) or (ii) of this Section 4.07(b) or this clause (iii) or contained in any amendment, restatement, modification, renewal, supplement, refunding, replacement or Refinancing of an agreement referred to in clause (i) or (ii) of this Section 4.07(b) or this clause (iii); provided, however, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such agreement are no less favorable (as determined in Good Faith by the Company) in any material respect, taken as a whole, to the Holders of the Notes than the encumbrances and restrictions contained in such agreements referred to in clause (i) or (ii) of this Section 4.07(b) on the Issue Date or the date such Restricted Subsidiary became a Restricted Subsidiary or was merged into or consolidated with a Restricted Subsidiary, whichever is applicable;

 

(iv)                             in the case of Section 4.07(a)(3), encumbrances or restrictions arising in connection with Liens permitted to be Incurred under Section 4.11 that apply only to the assets subject to such Liens;

 

(v)                                 purchase money obligations for property acquired and Capitalized Lease Obligations that impose restrictions of the nature described in Section 4.07(a)(3) on the property so acquired;

 

(vi)                             contracts for the sale of assets, including customary restrictions with respect to a Subsidiary of the Company pursuant to an agreement that has been entered into for the sale or disposition of all or a portion of the Capital Stock or assets of such Subsidiary;

 

(vii)                          restrictions on cash or other deposits or net worth imposed by customers or lessors or required by insurance, surety or bonding companies under contracts entered into in the ordinary course of business;

 

(viii)                      any customary provisions in leases, subleases or licenses and other agreements entered into by the Company or any Restricted Subsidiary in the ordinary course of business;

 

(ix)                             encumbrances or restrictions arising or existing by reason of applicable law or any applicable rule, regulation, order, permit or grant, including for the avoidance of doubt, any encumbrance or restriction on any Insurance Subsidiary 

 

55

 

by any governmental authority having the power to regulate such Insurance Subsidiary;

 

(x)                                 encumbrances or restrictions contained in or arising under indentures or debt instruments or other debt arrangements Incurred or Preferred Stock issued by the Company or any Restricted Subsidiary subsequent to the Issue Date pursuant to Section 4.08 that are not more restrictive, taken as a whole (as determined in Good Faith by the Company), than those applicable to the Company in this Indenture on the Issue Date;

 

(xi)                              encumbrances or restrictions contained in or arising under indentures or other debt instruments or other debt arrangements Incurred or Preferred Stock issued by the Company or any Subsidiary subsequent to the Issue Date pursuant to Section 4.08(b)(2), (5), (6), (7) and (14) or contained or arising in connection with any Reinsurance Agreement or Statutory Reserve Financing or agreement entered into by an Insurance Subsidiary or Special Purpose Subsidiary; provided that such encumbrances and restrictions contained in any agreement or instrument will not materially adversely affect the Company’s ability to make anticipated principal or interest payments on the Notes or are otherwise customary for financings or arrangements of that type (in each case, as determined in Good Faith by the Company);

 

(xii)                         restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase or other agreement to which the Company or any of the Restricted Subsidiaries is a party and entered into in the ordinary course of business; provided that such agreement prohibits the encumbrance of solely the property or assets of the Company or such Restricted Subsidiary that are the subject of such agreement, the payment rights arising thereunder or the proceeds thereof and does not extend to any other asset or property of the Company or such Restricted Subsidiary or the assets or property of any other Restricted Subsidiary;

 

(xiii)                      customary provisions in joint venture agreements and other similar agreements;

 

(xiv)                      customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business;

 

(xv)                          any instrument governing any Indebtedness or Capital Stock of a Person that is an Unrestricted Subsidiary as in effect on the date that such Person becomes a Restricted Subsidiary, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person who became a Restricted Subsidiary or the property or assets of the Person who became a Restricted Subsidiary, and was not entered into in contemplation of the designation of such Subsidiary as a Restricted Subsidiary; provided that in the case of Indebtedness, the incurrence of such Indebtedness as a result of such Person becoming a Restricted Subsidiary was permitted by the terms of this Indenture;

 

(xvi)                       encumbrances or restrictions contained in or arising under any contract, instrument or agreement relating to Indebtedness of any Foreign Subsidiary 

 

56

 

permitted to be Incurred pursuant to Sections 4.08 and 4.11 that imposes restrictions solely on such Foreign Subsidiary and its Subsidiaries; and

 

(xvii)                  encumbrances or restrictions (A) by virtue of any transfer of, agreement to transfer, option or right with respect to, or Lien on, any property or assets of the Company or any Restricted Subsidiary not otherwise prohibited by this Indenture, (B) contained in mortgages, pledges or other security agreements securing Indebtedness of a Restricted Subsidiary to the extent restricting the transfer of the property or assets subject thereto, (C) pursuant to customary provisions restricting dispositions of real property interests set forth in any reciprocal easement agreements of the Company or any Restricted Subsidiary, (D) pursuant to customary provisions in Hedging Obligations and Swap Contracts or (E) that arise or are agreed to in the ordinary course of business and do not detract from the value of property or assets of the Company or any Restricted Subsidiary in any manner material to the Company or such Restricted Subsidiary.

 

Section 4.08.   Limitation on Indebtedness.

 

(a)                                 The Company will not, and will not permit any of the Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness); provided, however, that the Company and any Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) if the Fixed Charge Coverage Ratio of the Company and the Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.

 

(b)                                 The provisions of Section 4.08(a) will not prohibit the Incurrence of the following Indebtedness:

 

(1)                                 Indebtedness of the Company evidenced by the Notes (other than Additional Notes) and Indebtedness of Subsidiary Guarantors evidenced by the Subsidiary Guarantees relating to the Notes (other than Additional Notes);

 

(2)                                 Indebtedness Incurred pursuant to Debt Facilities in an aggregate principal amount not to exceed $200.0 million, at any time outstanding less, to the extent a permanent repayment or commitment reduction is required thereunder as a result of such application, the aggregate principal amount of all principal repayments following the Issue Date actually made under any Debt Facilities Incurred in reliance on this clause (2) with Net Available Cash from Asset Dispositions;

 

(3)                                 Guarantees by (x) the Company or a Subsidiary Guarantor (including any Restricted Subsidiary the Company elects to cause to become a Subsidiary Guarantor in connection therewith) of Indebtedness permitted to be Incurred by the Company or a Restricted Subsidiary in accordance with the provisions of this Indenture; provided that if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Subsidiary Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Subsidiary Guarantor’s Guarantee with respect to the Notes substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee of 

 

57

 

such Restricted Subsidiary, as applicable, and (y) Non-Guarantor Subsidiaries of Indebtedness Incurred by Non-Guarantor Subsidiaries in accordance with the provisions of this Indenture;

 

(4)                                 Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any other Restricted Subsidiary; provided, however,

 

(a)                                 if the Company is the obligor on Indebtedness owing to a Non-Guarantor Subsidiary, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes;

 

(b)                                 if a Subsidiary Guarantor is the obligor on such Indebtedness and a Non-Guarantor Subsidiary is the obligee, such Indebtedness is subordinated in right of payment to the Subsidiary Guarantees of such Subsidiary Guarantor; and

 

(c)                                  (i)            any subsequent issuance or transfer of Capital Stock or any other event that results in any such Indebtedness being beneficially held by a Person other than the Company or a Restricted Subsidiary; and

 

(ii)           any subsequent sale or other transfer of any such Indebtedness to a Person other than the Company or a Restricted Subsidiary,

 

shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company or such Subsidiary, as the case may be;

 

(5)                                 any Indebtedness (other than the Indebtedness described in clause (1) of this Section 4.08(b)) outstanding on the Issue Date, and any Refinancing Indebtedness Incurred in respect of any Indebtedness described under clause (1), this clause (5) or clause (6) of this Section 4.08(b) or Incurred pursuant to Section 4.08(a);

 

(6)                                 Indebtedness of Persons Incurred and outstanding on the date on which such Person became a Restricted Subsidiary or was acquired by, or merged or consolidated with or into, the Company or any Restricted Subsidiary (other than Indebtedness Incurred in connection with, or in contemplation of, such acquisition, merger or consolidation); provided, however, that at the time such Person is acquired by, or merged or consolidated with or into, the Company or any Restricted Subsidiary and after giving effect to the Incurrence of such Indebtedness pursuant to this clause (6), either (i) the Company would have been able to incur $1.00 of additional Indebtedness pursuant to Section 4.08(a) or (ii) the Fixed Charge Coverage Ratio for the Company and the Restricted Subsidiaries would be greater than such Fixed Charge Coverage Ratio immediately prior to such acquisition, merger or consolidation;

 

(7)                                 Indebtedness under Hedging Obligations or Swap Contracts; provided, however, that such Hedging Obligations or Swap Contracts are entered into (i) in the ordinary course of business by any Insurance Subsidiary or (ii) to fix, manage or hedge interest rate or currency or commodity exposure of the Company or any Restricted Subsidiary and not for speculative purposes;

 

(8)                                 the incurrence by the Company or any Restricted Subsidiary of Indebtedness (including Capitalized Lease Obligations, mortgage financings or purchase money obligations), 

 

58

 

incurred for the purpose of financing or reimbursing all or any part of the purchase price or cost of the acquisition, development, construction, purchase, lease, repair, addition or improvement of property (real or personal), plant, equipment or other fixed or capital assets that are used or useful in a Related Business, whether through the direct purchase of assets or the purchase of Equity Interests of any Person owning such assets (in each case, incurred within 180 days of such acquisition, development, construction, purchase, lease, repair, addition or improvement) and all Indebtedness incurred to refund, refinance or replace any such Indebtedness, in an aggregate principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (8), will not exceed $10.0 million at any one time outstanding;

 

(9)                              Indebtedness Incurred by the Company or the Restricted Subsidiaries in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance, self-insurance obligations, performance, bid, surety, appeal and similar bonds and completion Guarantees (not for borrowed money) or security deposits, letters of credit, banker’s guarantees or banker’s acceptances, in each case in the ordinary course of business (including letters of credit issued in connection with reinsurance transactions entered into in the ordinary course of business);

 

(10)                          Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earn-outs or similar obligations, in each case, Incurred or assumed in connection with the acquisition or disposition of any business or assets of the Company or any business, assets or Capital Stock of a Subsidiary of the Company, other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Capital Stock for the purpose of financing such acquisition;

 

(11)                          Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument, including, but not limited to, electronic transfers, wire transfers and commercial card payments drawn against insufficient funds in the ordinary course of business (except in the form of committed or uncommitted lines of credit); provided, however, that such Indebtedness is extinguished within ten Business Days of Incurrence;

 

(12)                          Indebtedness Incurred by the Company or any Restricted Subsidiary in connection with third-party insurance premium financing arrangements in the ordinary course of business;

 

(13)                          Indebtedness owed to banks and other financial institutions Incurred in the ordinary course of business of the Company and its Restricted Subsidiaries with such banks or financial institutions that arise in connection with ordinary banking arrangements to provide treasury services or to manage cash balances of the Company and the Restricted Subsidiaries;

 

(14)                          guarantees to suppliers or licensors (other than guarantees of Indebtedness) in the ordinary course of business;

 

(15)                          Indebtedness of the Company or any Restricted Subsidiary to the extent that the net proceeds thereof are promptly deposited to defease the Notes pursuant to Article XIII of the Base Indenture, as amended by Article 13 of this Second Supplemental Indenture;

 

59

 

(16)                          Indebtedness in connection with Permitted Transactions entered into by Insurance Subsidiaries or by the Company in connection with Investments permitted by clauses (18), (19) and (20) of the definition of “Permitted Investment”;

 

(17)                          Non-Recourse Debt of Insurance Subsidiaries incurred in the ordinary course of business (i) existing or arising under Swap Contracts entered into by Insurance Subsidiaries or (ii) resulting from the sale or securitization of non-admitted assets, policy loans, CBOs and CMOs;

 

(18)                          Indebtedness of the Company owing to any Non-Guarantor Subsidiary pursuant to the Tax Sharing Agreement;

 

(19)                          Indebtedness of Non-Guarantor Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (19) and then outstanding, will not exceed $25.0 million at any one time outstanding;

 

(20)                          Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;

 

(21)                          Indebtedness arising under agreements of the Company to maintain a specified net worth of Eagle Life Insurance Company, as required by one or more Insurance Regulatory Authorities;

 

(22)                          in addition to the items referred to in clauses (1) through (21) above, Indebtedness of the Company and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (22) and then outstanding, will not exceed $75.0 million at any one time outstanding.

 

(c)                                  For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this Section 4.08:

 

(1)                                 in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 4.08(b) or could be incurred pursuant to Section 4.08(a), the Company, in its sole discretion, may divide and classify such item of Indebtedness (or any portion thereof) on the date of Incurrence and may later reclassify such item of Indebtedness (or any portion thereof) in any manner that complies with this covenant and only be required to include the amount and type of such Indebtedness once; provided that all Indebtedness outstanding on the Issue Date under the Senior Credit Agreement shall be deemed Incurred on the Issue Date pursuant to Section 4.08(b)(2) and may not later be reclassified;

 

(2)                                 Guarantees of, or obligations in respect of letters of credit or banker’s acceptances related thereto relating to, Indebtedness that is otherwise included in the determination of a particular amount of Indebtedness shall not be included;

 

(3)                                 if obligations in respect of letters of credit are Incurred pursuant to a Debt Facility and are being treated as Incurred pursuant to Section 4.08(b)(2) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;

 

60

 

(4)                                 the principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary, or Preferred Stock of a Non-Guarantor Subsidiary, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof;

 

(5)                                 Indebtedness permitted by this covenant need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Indebtedness; and

 

(6)                                 the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.

 

Accrual of interest, accrual of dividends, the accretion of accreted value or the amortization of debt discount, the payment of interest in the form of additional Indebtedness and the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock will not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.08. The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount or the aggregate principal amount outstanding in the case of Indebtedness issued with interest payable-in-kind, (ii) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness, (iii) in the case of the guarantee by a specified Person of Indebtedness of another Person, the maximum liability to which the specified Person may be subject upon the occurrence of the contingency giving rise to the obligation and (iv) in the case of Indebtedness of others guaranteed solely by means of a Lien on any asset or property of the Company or any Restricted Subsidiary (and not to their other assets or properties generally), the lesser of (x) the Fair Market Value of such asset or property on the date on which such Indebtedness is Incurred and (y) the amount of the Indebtedness so secured.

 

For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is Incurred to Refinance other Indebtedness denominated in a foreign currency, and such Refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing Indebtedness does not exceed the principal amount of such Indebtedness being Refinanced plus the amount of any reasonable premium (including reasonable tender premiums), defeasance costs and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness. Notwithstanding any other provision of this Section 4.08, the maximum amount of Indebtedness that the Company may Incur pursuant to this Section 4.08 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness Incurred to Refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being Refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such Refinancing.

 

61

 

Section 4.09.   Asset Dispositions.

 

(a)                                 The Company will not, and will not permit any of its Restricted Subsidiaries to, make any Asset Disposition following the Issue Date unless:

 

(i)            the Company or such Restricted Subsidiary, as the case may be, receives consideration at least equal to the Fair Market Value (such Fair Market Value to be determined as of the date of contractually agreeing to such Asset Disposition) of the assets subject to such Asset Disposition; and

 

(ii)           at least 75% of the consideration from such Asset Disposition received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents.

 

The Company shall determine the Fair Market Value of any consideration from such Asset Disposition that is not cash or Cash Equivalents.

 

(b)                                 Any Net Available Cash received by the Company or any Restricted Subsidiary from any Asset Disposition shall be applied at the Company’s election:

 

(v)                                 to prepay, repay or repurchase secured Indebtedness of the Company or any Restricted Subsidiary (other than Disqualified Stock or Subordinated Obligations) and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto, in each case other than Indebtedness owed to the Company or an Affiliate of the Company;

 

(w)                               to prepay, repay or repurchase Indebtedness of a Non-Guarantor Subsidiary, other than Indebtedness owed to the Company or an Affiliate of the Company;

 

(x)                                 to prepay, repay or repurchase other Indebtedness of the Company or a Subsidiary Guarantor, in each case other than Indebtedness owed to the Company or an Affiliate of the Company; provided that the Company shall equally and ratably reduce Obligations under the Notes, pursuant to Section 3.03, through open market purchases at or above 100% of the principal amount thereof or by making an offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to all Holders to purchase their Notes at 100% of the principal amount thereof, in each case plus the amount of accrued but unpaid interest on the Notes that are purchased or redeemed;

 

(y)                                 to reinvest in or acquire any one or more businesses, properties or assets (including Capital Stock or other securities purchased in connection with the acquisition of Capital Stock or property of another Person that is or becomes a Restricted Subsidiary or that would constitute a Permitted Investment under clause (2) of the definition thereof) used or useful in a Related Business or that replace the businesses, properties and/or assets that are the subject of such Asset Disposition (including, in the case of Asset Dispositions by an Insurance Subsidiary, securities or other investment assets of the type purchased by such Insurance Subsidiary in the ordinary course of business); or

 

(z)                                  any combination of the foregoing.

 

(c)                                  All Net Available Cash that is not applied or invested (or committed pursuant to a written agreement to be applied or invested) as provided in Section 4.09(b)(v), (w), (x), (y) or (z) within 365 days after receipt (or in the case of any amount committed to be so applied or reinvested, which are not actually so applied or reinvested within 180 days following such 365-day period) will be deemed to constitute “Excess Proceeds.” Within 30 days after the aggregate amount of Excess Proceeds exceeds 

 

62

 

$50.0 million, the Company will make an offer (“Asset Disposition Offer”) to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes or any Subsidiary Guarantee (without giving effect to collateral arrangements) (“Pari Passu Indebtedness”) containing provisions similar to those set forth in this Indenture with respect to offers to purchase with the proceeds of sales of assets, to purchase the maximum principal amount of the Notes and such other Pari Passu Indebtedness that may be purchased out of the Excess Proceeds. The Company and the Restricted Subsidiaries may make an Asset Disposition Offer under this Section 4.09 using Net Available Cash prior to the time any such Net Available Cash becomes Excess Proceeds, in which case such Net Available Cash shall be deemed to have been applied within the time frame required by this Section 4.09. The offer price in any Asset Disposition Offer will be equal to 100% of the principal amount of the Notes and such other Pari Passu Indebtedness plus accrued and unpaid interest thereon to, but excluding, the date of purchase (subject to the rights of Holders of record on any Record Date to receive payments of interest on the related Interest Payment Date), and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Disposition Offer, the Company may use such Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of the Notes and such other Pari Passu Indebtedness tendered into such Asset Disposition Offer exceeds the amount of Excess Proceeds, the Notes and such other Pari Passu Indebtedness shall be purchased on a pro rata basis based on the principal amount of the Notes and such other Pari Passu Indebtedness tendered. Upon completion of each Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero.

 

(d)                                 For the purposes of this Section 4.09, the following are deemed to be Cash Equivalents:

 

(i)            any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of the Company or any Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are assumed by the transferee of any such assets (including, without limitation, liabilities relating to insurance products);

 

(ii)           any notes or other obligations or other securities or assets received by the Company or such Restricted Subsidiary from such transferee that are converted within 180 days by the Company or such Restricted Subsidiary into cash (to the extent of the cash received); and

 

(iii)          any Designated Non-cash Consideration received by the Company or any of the Restricted Subsidiaries in such Asset Dispositions having an aggregate Fair Market Value (determined in Good Faith by the Company), taken together with all other Designated Non-cash Consideration received pursuant to this clause (iii) that is at that time outstanding, not to exceed $25.0 million at the time of the receipt of such Designated Noncash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value).

 

(e)                                  The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section 4.09. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.09, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached obligations of the Company under this Section 4.09.

 

63

 

(f)                                   Pending the final application of any such Net Available Cash, the Company or the Restricted Subsidiaries may temporarily reduce revolving indebtedness under any Debt Facility or otherwise invest such Net Available Cash in Cash Equivalents.

 

Section 4.10.   Transactions with Affiliates.

 

(a)                                 The Company will not, and will not permit any of the Restricted Subsidiaries to enter into or conduct any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of the Company (an “Affiliate Transaction”) involving payments of consideration in excess of $5.0 million unless:

 

(1)                                 the terms of such Affiliate Transaction, when viewed together with any related Affiliate Transactions, are not substantially as advantageous to the Company or such Restricted Subsidiary, as the case may be, than those that could have been obtained in a comparable transaction at the time of such transaction in arm’s length dealings with a Person who is not an Affiliate;

 

(2)                                 in the event such Affiliate Transaction involves an aggregate consideration in excess of $15.0 million, the terms of such transaction have been approved by a majority of the disinterested members of the Board of Directors of the Company (and such majority determines that such Affiliate Transaction satisfies the criteria in clause (1) above); and

 

(3)                                 in the event such Affiliate Transaction involves an aggregate consideration in excess of $25.0 million, the Company has received a written opinion from an Independent Financial Advisor stating that such Affiliate Transaction is fair, from a financial point of view, to the Company and the Restricted Subsidiaries, as applicable, or satisfies the criteria in clause (1) above.

 

(b)                                 Section 4.10(a) not apply to:

 

(1)                                 any (i) Restricted Payment permitted to be made pursuant to Section 4.06 and (ii) Permitted Investment in any Person that is an Affiliate of the Company solely as a result of the ownership of Investments in such Person by the Company or any Restricted Subsidiary;

 

(2)                                 any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements and other compensation arrangements, options to purchase Capital Stock of the Company pursuant to restricted stock plans, long-term incentive plans, stock appreciation rights plans, participation plans or similar employee benefits plans, pension plans or similar plans or agreements or arrangements approved by the Board of Directors of the Company or the compensation committee thereof;

 

(3)                                 loans or advances to employees, officers or directors of the Company or any Subsidiary of the Company in the ordinary course of business, in an aggregate amount outstanding at any time not in excess of $2.0 million (without giving effect to the forgiveness of any such loan);

 

(4)                                 any transaction between or among the Company and any Restricted Subsidiary or between or among Restricted Subsidiaries, and any Guarantees issued, and any Permitted

 

64

 

 

 

Swap Obligations entered into, by the Company or a Restricted Subsidiary for the benefit of the Company or a Restricted Subsidiary;

 

(5)                                 the payment of reasonable and customary compensation (including fees, benefits, severance, change of control payments and incentive arrangements) to, and employee benefit arrangements, including, without limitation, split-dollar insurance policies, and indemnity or similar arrangements provided on behalf of, directors, officers, employees and agents of the Company or any of its Subsidiaries, whether by charter, bylaw, statutory or contractual provisions;

 

(6)                                 the existence of, and the performance of obligations of the Company or any of the Restricted Subsidiaries under the terms of any agreement to which the Company or any of the Restricted Subsidiaries is a party as of or on the Issue Date, as these agreements may be amended, modified, supplemented, extended or renewed from time to time; provided, however, that any future amendment, modification, supplement, extension or renewal entered into after the Issue Date will be permitted to the extent that its terms, taken as a whole, are not more disadvantageous to the Holders of the Notes in any material respect, as determined in Good Faith by the Company, than the terms of the agreements in effect on the Issue Date;

 

(7)                                 any agreement between any Person and an Affiliate of such Person existing at the time such Person is acquired by or merged with or into or consolidated with the Company or a Restricted Subsidiary; provided that such agreement was not entered into in contemplation of such acquisition, merger or consolidation, or any amendment thereto (so long as any such amendment is not disadvantageous in any material respect to the Holders, as determined in Good Faith by the Company, when taken as a whole as compared to the applicable agreement as in effect on the date of such acquisition or merger);

 

(8)                                 insurance transactions, intercompany pooling and other reinsurance transactions entered into in the ordinary course of business;

 

(9)                                 any purchases by the Company’s Affiliates of Indebtedness of the Company or any of the Restricted Subsidiaries the majority of which Indebtedness is placed with Persons who are not Affiliates and payments of principal and interest on such Indebtedness;

 

(10)                          payment of reasonable fees to, and arrangements for indemnification payments for, directors and officers of the Company and its Subsidiaries;

 

(11)                          any issuance or sale of Capital Stock (other than Disqualified Stock) to Affiliates of the Company and the granting of registration and other customary rights in connection therewith or any contribution to the Capital Stock of the Company or any Restricted Subsidiary;

 

(12)                          payments by the Company or any of its Subsidiaries to any Affiliate for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which payments are on arm’s length terms and are approved by a majority of the disinterested members of the Board of Directors of the Company in Good Faith;

 

65

 

(13)                          transactions in which the Company or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair, from a financial point of view, to the Company or such Restricted Subsidiary or stating that the terms are not materially less favorable taken as a whole than those that might reasonably have been obtained by the Company or such Restricted Subsidiary in a comparable transaction at the time of such transaction in arm’s length dealings with a Person who is not an Affiliate;

 

(14)                          transactions with customers, clients, suppliers, joint ventures, joint venture partners, Unrestricted Subsidiaries or purchasers or sellers of goods and services and Investments by any Insurance Subsidiary in accordance with clauses (18), (19) and (20) of the definition of “Permitted Investments,” in each case in the ordinary course of business (as determined by the Company in Good Faith) and on terms no less favorable than that available from non-Affiliates (as determined by the Company in Good Faith) and otherwise not prohibited by this Indenture;

 

(15)                          any transaction with an Affiliate where the only consideration paid by the Company or any Restricted Subsidiary is Capital Stock of the Company (other than Disqualified Stock);

 

(16)                          any transaction entered into by an Insurance Subsidiary for which approval has been received from the applicable Insurance Regulatory Authority;

 

(17)                          any redemption or other repurchase of the Convertible 2009 Debt, the Convertible 2010 Debt or the subordinated debentures of the Company outstanding on the Issue Date; and

 

(18)                          any transaction with any Person who is not an Affiliate of the Company or of any Restricted Subsidiary immediately before the consummation of such transaction that becomes an Affiliate of the Company or of any Restricted Subsidiary as a result of such transaction.

 

Section 4.11.   Limitation on Liens.

 

(a)           The Company will not, and will not permit any of the Restricted Subsidiaries to create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind (other than Permitted Liens) upon any of their property or assets, now owned or hereafter acquired, that secures Indebtedness of the Company or any of the Restricted Subsidiaries without effectively providing that the Notes are secured equally and ratably with (or, if the Indebtedness to be secured by the Lien is subordinated in right of payment to the Notes or any Subsidiary Guarantee, prior to) the Indebtedness so secured for so long as such Indebtedness is so secured.

 

(b)           With respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time such Indebtedness was Incurred, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness.  The “Increased Amount” of any Indebtedness shall mean any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, the payment of dividends on preferred stock in the form of additional shares of preferred stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness.

 

66

 

(c)           Notwithstanding the foregoing, any Lien securing the Notes granted pursuant to this Section 4.11 shall be automatically and unconditionally released and discharged upon (i) the release by the holders of the Indebtedness described above of their Lien on the property or assets of the Company or any Restricted Subsidiary (including any deemed release upon payment in full of all obligations under such Indebtedness, except payment in full made with the proceeds from the foreclosure, sale or other realization from an enforcement on the collateral by the holders of the Indebtedness described above of their Lien), (ii) any sale, exchange or transfer to any Person other than the Company or any Restricted Subsidiary of the property or assets secured by such Lien, or of all of the Capital Stock held by the Company or any Restricted Subsidiary in, or all or substantially all of the assets of, any Restricted Subsidiary creating such Lien, in each case in accordance with the terms of this Indenture, (iii) payment in full of the principal of, and accrued and unpaid interest on, the Notes or (iv) the exercise by the Company of its legal defeasance option or covenant defeasance option set forth in Article XIII of the Base Indenture, as amended by Article 13 of this Second Supplemental Indenture, or the discharge of the Company’s obligations under this Indenture in accordance with the terms of Article XI of the Base Indenture, as amended by Article 11 of this Second Supplemental Indenture.

 

Section 4.12.   Offer to Repurchase Upon Change of Control.

 

(a)           If a Change of Control occurs, unless the Company has exercised its right to redeem all of the Notes pursuant to Section 3.03, each Holder will have the right to require the Company to repurchase all or any part (in integral multiples of $1,000 except that no Note may be tendered in part if the remaining principal amount would be less than $2,000) of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount of the Notes plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).

 

(b)           Prior to or within 30 days following any Change of Control, except to the extent the Company has exercised its right to redeem all of the Notes pursuant to Section 3.03, the Company will mail a notice (the “Change of Control Offer”) to each Holder or otherwise give notice in accordance with the Applicable Procedures, with a copy to the Trustee, stating:

 

(1)                                 that a Change of Control Offer is being made and that all Notes properly tendered pursuant to such Change of Control Offer will be accepted for purchase by the Company at a purchase price in cash equal to 101% of the principal amount of such Notes plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (subject to the right of Holders of record on a Record Date to receive interest on the relevant Interest Payment Date) (the “Change of Control Payment”);

 

(2)                                 the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed or otherwise delivered in accordance with the Applicable Procedures) (the “Change of Control Payment Date”);

 

(3)                                 the procedures determined by the Company, consistent with this Indenture, that a Holder must follow in order to have its Notes repurchased;

 

(4)                                 that any Notes not tendered will continue to accrue interest in accordance with the terms of this Indenture;

 

(5)                                 that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;

 

67

 

(6)                                 that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes delivered for purchase and a statement that such Holder is unconditionally withdrawing its election to have such Notes purchased;

 

(7)                                 if such notice is delivered prior to the occurrence of a Change of Control, stating that the Change of Control is conditional on the occurrence of such Change of Control; and

 

(8)                                 that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof.

 

(c)           On the Change of Control Payment Date, the Company will, to the extent lawful:

 

(1)                                 accept for payment all Notes or portions of Notes (in principal amounts of $2,000 or larger integral multiples of $1,000 in excess thereof) properly tendered pursuant to the Change of Control Offer;

 

(2)                                 deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes validly tendered; and

 

(3)                                 deliver or cause to be delivered to the Trustee for cancellation the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company.

 

(d)           The Paying Agent will promptly submit electronically or mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry in accordance with the Applicable Procedures) to each Holder a new Note (it being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officers’ Certificate will be required for the Trustee to authenticate or deliver such new Note) equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a minimum principal amount of $2,000 or integral multiples of $1,000 in excess thereof.

 

(e)           The Company will not be required to make a Change of Control Offer following a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer or (2) a notice of redemption for all of the outstanding Notes has been given pursuant to this Indenture unless and until there is a default in payment of the applicable redemption price, plus accrued and unpaid interest to, but excluding, the proposed redemption date. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making the Change of Control Offer.

 

(f)            The Company will comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws or regulations thereunder in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Indenture, the Company will comply

 

68

 

with the applicable securities laws and regulations and will not be deemed to have breached its obligations described in this Indenture by virtue of such compliance.

 

(g)           Other than as specifically provided in this Section 4.12, any purchase pursuant to this Section 4.12 shall be made pursuant to the provisions of Sections 3.02 and 3.03 of the Base Indenture, as amended by this Second Supplemental Indenture.

 

Section 4.13.   Future Subsidiary Guarantors.

 

(a)           The Company will cause (i) each Wholly Owned Subsidiary (other than any Excluded Subsidiary) that is formed or acquired following the Issue Date, within 15 days after such formation or acquisition, (ii) any other Restricted Subsidiary that Guarantees, on the Issue Date or any time thereafter, any Indebtedness of the Company or any Subsidiary Guarantor, within 15 days after giving such Guarantee, and (iii) if the Aggregate RBC Ratio is less than 225% as of the last day of any fiscal year or fiscal quarter of the Company, any other Wholly Owned Subsidiary (other than any Excluded Subsidiary) in existence on the Issue Date or formed or acquired after the Issue Date, within 15 days after financial information for such fiscal year or fiscal quarter is required to be furnished pursuant to Section 4.05, in each case to execute and deliver to the Trustee a supplemental indenture to this Indenture, the form of which is attached as Exhibit B, pursuant to which such Restricted Subsidiary will irrevocably and unconditionally Guarantee, on a joint and several basis, the full and prompt payment of the principal of, premium, if any, and interest in respect of the Notes on a senior basis and all other Obligations under this Indenture.

 

(b)           The obligations of each Subsidiary Guarantor will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its contribution obligations under this Indenture, result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law.

 

(c)           Each Subsidiary Guarantee by a Subsidiary Guarantor may be automatically and unconditionally released and discharged in accordance with Section 10.06.

 

Section 4.14.   Effectiveness of Covenants.

 

(a)           Following the first day: (1) the Notes have an Investment Grade Rating from both Rating Agencies; and (2) no Default has occurred and is continuing under this Indenture, the Company and the Restricted Subsidiaries shall not be subject to Sections 4.06, 4.07, 4.08, 4.09, 4.10, 4.13 and 5.01(a)(4) (collectively, the “Suspended Covenants”). Additionally, upon the commencement of a Suspension Period, the amount of Excess Proceeds will be reset to zero.

 

(b)           If at any time the Notes’ credit rating is downgraded from an Investment Grade Rating by any Rating Agency, then the Suspended Covenants will thereafter be reinstated as if such covenants had never been suspended (the “Reinstatement Date”) and be applicable pursuant to the terms of this Indenture (including in connection with performing any calculation or assessment to determine compliance with the terms of this Indenture), unless and until the Notes subsequently attain an Investment Grade Rating and no Default or Event of Default is in existence (in which event the Suspended Covenants shall no longer be in effect for such time that the Notes maintain an Investment Grade Rating); provided, however, that no Default, Event of Default or breach of any kind shall be deemed to exist or have occurred under this Indenture, the Notes or the Subsidiary Guarantees with respect to the Suspended

 

69

 

Covenants based on, and none of the Company or any of its Subsidiaries shall bear any liability for, any actions taken or events occurring during the Suspension Period, or any actions taken at any time pursuant to any contractual obligation arising prior to the Reinstatement Date, regardless of whether such actions or events would have been permitted if the applicable Suspended Covenants remained in effect during such period. The period of time between the date of suspension of the covenants and the Reinstatement Date is referred to as the “Suspension Period.”

 

(c)           On the Reinstatement Date, all Indebtedness Incurred during the Suspension Period will be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under Section 4.08(b)(5). In addition, for purposes of Section 4.10, all agreements and arrangements entered into by the Company and any Restricted Subsidiary with an Affiliate of the Company during the Suspension Period prior to such Reinstatement Date will be deemed to have been entered into on or prior to the Issue Date, and for purposes of Section 4.07, all contracts entered into during the Suspension Period prior to such Reinstatement Date that contain any of the restrictions contemplated by such Section 4.07 will be deemed to have been existing on the Issue Date. Calculations made after the Reinstatement Date of the amount available to be made as Restricted Payments under Section 4.06 will be made as though such Section 4.06 had been in effect since the Issue Date and throughout the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period will reduce the amount available to be made as Restricted Payments under such Section 4.06 to the extent such Restricted Payments were not otherwise permitted to be made pursuant to Section 4.06(b)(1) through (20); provided that the amount available to be made as Restricted Payments on the Reinstatement Date pursuant to Section 4.06(a) shall not be reduced below zero solely as a result of such Restricted Payments made during a Suspension Period.

 

(d)           During any period when the Suspended Covenants are suspended, the Board of Directors of the Company may not designate any of the Company’s Subsidiaries as Unrestricted Subsidiaries pursuant to this Indenture, unless such designation would have complied with Section 4.06 as if such Section 4.06 had been in effect during such period.

 

Section 4.15.   Applicability of Covenants Contained in the Base Indenture.

 

(a)           Each of the agreements and covenants of the Company contained in Article IV of the Base Indenture shall apply to the Notes, except as amended, modified or otherwise specified in this Second Supplemental Indenture.

 

(b)           Solely for purposes of the Notes and not for purposes of any other Securities, Article IX of the Base Indenture, as amended by Article 9 of this Second Supplemental Indenture, shall apply to the Notes in lieu of Section 4.08 of the Base Indenture, which shall have no force and effect with respect to the Notes.

 

ARTICLE 5

 

SUCCESSORS

 

Solely for purposes of the Notes and not for purposes of any other Securities, Article X of the Base Indenture shall not apply to, and shall have no force and effect with respect to, the Notes, and this Article 5 shall apply in lieu thereof.  Any reference to Article X or the Sections of Article X of the Base Indenture shall be superseded by, and be deemed to refer to, this Article 5 and the Sections of this Article 5, respectively.

 

70

 

Section 5.01.   Merger, Consolidation or Sale of All or Substantially All Assets.

 

(a)           The Company will not consolidate with or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of the properties and assets of the Company and the Restricted Subsidiaries, taken as a whole, in one or more related transactions, to, any Person unless:

 

(1)                                 if other than the Company, the resulting, surviving or transferee Person (the “Successor Company”) will be a corporation, partnership or limited liability company organized and existing under the laws of the United States of America, any State of the United States, the District of Columbia or any territory thereof;

 

(2)                                 the Successor Company (if other than the Company) and, in the case of a Successor Company that is not a corporation, a corporate co-issuer, assumes all of the obligations of the Company under the Notes and this Indenture pursuant to a supplemental indenture or other documentation executed and delivered to the Trustee;

 

(3)                                 immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Company, the Successor Company or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Company, the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing;

 

(4)                                 immediately after giving pro forma effect to such transaction and any related financing transactions, as if such transactions had occurred at the beginning of the applicable four-quarter period, (i) the Company or the Successor Company, as applicable, would be able to Incur at least $1.00 of additional Indebtedness pursuant to Section 4.08(a) or (ii) the Fixed Charge Coverage Ratio for the Successor Company and the Restricted Subsidiaries would be greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;

 

(5)                                 if the Successor Company is not the Company, each Subsidiary Guarantor (unless it is the other party to the transactions above, in which case 5.01(c)(1) shall apply) shall have by supplemental indenture confirmed that its Subsidiary Guarantee shall apply to such Person’s obligations in respect of this Indenture and the Notes; and

 

(6)                                 the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture.

 

(b)           Without compliance with Section 5.01(a)(3) and (4):

 

(1)                                 any Restricted Subsidiary may consolidate with, merge with or into or to the Company or a Subsidiary Guarantor, and

 

(2)                                 the Company may merge with an Affiliate of the Company solely for the purpose of reincorporating the Company in another jurisdiction.

 

(c)           In addition, the Company will not permit any Subsidiary Guarantor to consolidate with or merge with or into (whether or not the Subsidiary Guarantor is the surviving corporation), or sell, assign, convey, transfer, lease, convey or otherwise dispose of all or substantially all of its properties and assets, in one or more related transactions, to any Person (other than to the Company or another Subsidiary Guarantor) unless:

 

71

 

(1)                                 if such entity remains a Subsidiary Guarantor, (a) the resulting, surviving or transferee Person (the “Successor Guarantor”) will be a corporation, partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State of the United States, the District of Columbia or any other territory thereof; (b) the Successor Guarantor, if other than such Subsidiary Guarantor, expressly assumes in writing by supplemental indenture (and other applicable documents), executed and delivered to the Trustee, all the obligations of such Subsidiary Guarantor under the Subsidiary Guarantee and this Indenture; (c) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Guarantor or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Guarantor or such Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; and (d) the Company will have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture; and

 

(2)                                 if such transaction constitutes an Asset Disposition, the transaction is made in compliance with Section 4.09 (it being understood that only such portion of the Net Available Cash as is required to be applied on the date of such transaction in accordance with the terms of this Indenture needs to be applied in accordance therewith at such time), to the extent applicable.

 

(d)           Notwithstanding the foregoing, any Subsidiary Guarantor may (i) merge with or into or transfer all or part of its properties and assets to another Subsidiary Guarantor or the Company or (ii) merge with a Restricted Subsidiary solely for the purpose of reincorporating the Subsidiary Guarantor in a State of the United States or the District of Columbia.

 

Section 5.02.   Successor Entity Substituted.

 

Upon any consolidation, merger, wind up, sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of the assets of the Company or a Guarantor in accordance with Section 5.01, the Company or the applicable Subsidiary Guarantor, as the case may be, shall be released from its obligations under this Indenture and its Subsidiary Guarantee, as the case may be, and the Successor Company or the Successor Guarantor, as the case may be, shall succeed to, and be substituted for, and may exercise every right and power of, the Company or a Subsidiary Guarantor, as the case may be, under this Indenture, but, in the case of a lease of all or substantially all its assets, the predecessor Company shall not be released from the obligation to pay the principal of and interest on the Notes and a Subsidiary Guarantor will not be released from its obligations under its Subsidiary Guarantee.

 

Solely for the purpose of computing amounts described in Section 4.06(a)(C)(i) through (c)(vi), the Successor Company shall only be deemed to have succeeded and be substituted for the Company with respect to periods subsequent to the effective time of such merger, consolidation, combination or transfer of assets.

 

ARTICLE 6

 

DEFAULTS AND REMEDIES

 

Solely for purposes of the Notes and not for purposes of any other Securities, Section 6.01(a) through (c) of the Base Indenture shall not apply to, and shall have no force and effect with

 

72

 

respect to, the Notes, and any reference to Section 6.01(a) through (c) of the Base Indenture shall be superseded by, and references thereto shall be deemed to refer to, Sections 6.01 and 6.02, as applicable, of this Second Supplemental Indenture.  References in Section 6.09 of the Base Indenture to Section 6.01(a)(1) or (2) of the Base Indenture shall be deemed to refer to Section 6.01(a)(1) or (2), as applicable, of this Second Supplemental Indenture.  For the avoidance of doubt, all other sections and subsections of Article VI of the Base Indenture not specified in the preceding sentence shall apply to the Notes.

 

Section 6.01.   Events of Default.

 

(a)           Each of the following is an “Event of Default”:

 

(1)                                 default in any payment of interest on any Note when due, and the continuance of such default for 30 days;

 

(2)                                 default in the payment of principal of or premium, if any, on any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration of acceleration or otherwise;

 

(3)                                 failure by the Company to comply with its obligations under Sections 5.01 or 4.12;

 

(4)                                 failure by the Company to comply for 60 days after written notice as provided below with any of its obligations under the Notes or this Indenture (except as contained in clauses (1) through (3) above);

 

(5)                                 default under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), other than Indebtedness owed to the Company or a Restricted Subsidiary, whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, which default:

 

(a)                                 is caused by a failure to pay principal on such Indebtedness at its final stated maturity within the grace period provided in the agreements or instruments governing such Indebtedness (“payment default”); or

 

(b)                                 results in the acceleration of such Indebtedness prior to its stated final, maturity;

 

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates $30.0 million or more (or its foreign currency equivalent);

 

(6)                                 the Company, a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the date of the latest audited consolidated financial statements for the Company and its consolidated Subsidiaries), would constitute a Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy Law:

 

(A)                               commences proceedings to be adjudicated bankrupt or insolvent;

 

(B)                               consents to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking an arrangement of debt,

 

73

 

reorganization, dissolution, winding up or relief under applicable Bankruptcy Law;

 

(C)                               consents to the appointment of a receiver, interim receiver, receiver and manager, liquidator, assignee, trustee, sequestrator or other similar official of it or for all or substantially all of its property;

 

(D)                               makes a general assignment for the benefit of its creditors; or

 

(E)                                admits in writing its inability to pay its debts generally as they become due;

 

(7)                                 a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(A)                               is for relief against the Company, any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the date of the latest audited consolidated financial statements for the Company and its consolidated Subsidiaries), would constitute a Significant Subsidiary, in a proceeding in which the Company, any such Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the date of the latest audited consolidated financial statements for the Company and its consolidated Subsidiaries), would constitute a Significant Subsidiary, is to be adjudicated bankrupt or insolvent;

 

(B)                               appoints a receiver, interim receiver, receiver and manager, liquidator, assignee, trustee, sequestrator or other similar official of the Company, any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the date of the latest audited consolidated financial statements for the Company and its consolidated Subsidiaries), would constitute a Significant Subsidiary, or for all or substantially all of the property of the Company, any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the date of the latest audited consolidated financial statements for the Company and its consolidated Subsidiaries), would constitute a Significant Subsidiary; or

 

(C)                               orders the liquidation, dissolution or winding up of the Company, or any Restricted Subsidiary that is a Significant Subsidiary or any group of Subsidiaries that, taken together (as of the date of the latest audited consolidated financial statements for the Company and its consolidated Subsidiaries), would constitute a Significant Subsidiary;

 

and the order or decree remains unstayed and in effect for 60 consecutive days;

 

(8)                                 failure by the Company or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the date of the latest audited consolidated financial statements for the Company and its consolidated Subsidiaries), would constitute a Significant Subsidiary to pay final and non-appealable judgments aggregating in excess of $30.0 million (or its foreign currency equivalent) (net of any amounts that are covered by insurance), which judgments remain unsatisfied or undischarged for any period of 60 consecutive days during which a stay of enforcement of such judgments shall not be in effect; and

 

74

 

(9)                                 any Subsidiary Guarantee of a Significant Subsidiary or group of Restricted Subsidiaries that taken together (as of the date of the latest audited consolidated financial statements for the Company and its consolidated Subsidiaries), would constitute a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms of this Indenture and the Subsidiary Guarantees) or is declared null and void in a judicial proceeding or any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors that, taken together (as of the date of the latest audited consolidated financial statements of the Company and its consolidated Subsidiaries) would constitute a Significant Subsidiary denies or disaffirms its obligations under this Indenture or its Subsidiary Guarantee, and the Company fails to cause such Restricted Subsidiary or Restricted Subsidiaries, as the case may be, to rescind such denials or disaffirmations within 30 days.

 

(b)           However, a Default under clause (4) of this Section 6.01(a) will not constitute an Event of Default until the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes notify the Company of the Default and the Company does not cure such Default within the time specified in clause (4) of this Section 6.01(a) after receipt of such notice.

 

Section 6.02.   Acceleration.

 

(a)           If an Event of Default (other than an Event of Default described in Section 6.01(a)(6) or (7) with respect to the Company) occurs and is continuing, the Trustee by notice in writing specifying the Event of Default and that it is a “notice” to the Company, or the Holders of at least 25% in principal amount of the then outstanding Notes by notice to the Company and the Trustee, may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued and unpaid interest, if any, on all the Notes to be due and payable. Upon such a declaration, such principal, premium, if any, and accrued and unpaid interest, if any, will be due and payable immediately. In the event of a declaration of acceleration of the Notes because an Event of Default described in Section 6.01(a)(5) has occurred and is continuing, the declaration of acceleration of the Notes shall be automatically rescinded and annulled if the Default triggering such Event of Default pursuant to Section 6.01(a)(5) shall be remedied or cured by the Company or a Restricted Subsidiary or waived by the holders of the relevant Indebtedness within 30 days after the declaration of acceleration with respect thereto and if (1) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, except nonpayment of principal, premium or interest on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.

 

(b)           If an Event of Default described in Section 6.01(a)(6) or (7) occurs and is continuing with respect to the Company, the principal of, premium, if any, and accrued and unpaid interest, if any, on all the Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

 

(c)           The Holders of a majority in principal amount of the outstanding Notes may waive all past Defaults in accordance with Section 6.08 of the Base Indenture and may rescind any acceleration with respect to the Notes pursuant to this Section 6.02 and its consequences if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, other than the nonpayment of the principal of, premium, if any, and interest on the Notes that have become due solely by such declaration of acceleration, have been cured or waived.  No such rescission shall extend to or shall affect any subsequent Default or impair any right consequent thereto.

 

75

 

Section 6.03.   [Reserved].

 

Section 6.04.   Limitation on Suits.

 

Solely for purposes of the Notes and not for purposes of any other Securities, the first paragraph of Section 6.04 of the Base Indenture is hereby amended and restated in its entirety as follows:

 

Except as set forth in the next paragraph, no holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law or in bankruptcy or otherwise 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:

 

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

 

(2) the Holders of at least 25% in principal amount of the then outstanding Notes have requested the Trustee to pursue the remedy;

 

(3) such Holders have offered the Trustee security or indemnity reasonably satisfactory to the Trustee against any loss, liability or expense;

 

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

 

(5) the Holders of a majority in principal amount of the then outstanding Notes have not given the Trustee a direction that is inconsistent with such request within such 60-day period.

 

Section 6.05.   [Reserved].

 

Section 6.06.   Control by Noteholders.

 

Solely for purposes of the Notes and not for purposes of any other Securities, the last sentence of Section 6.06 of the Base Indenture is hereby amended and restated in its entirety as follows:

 

Subject to Section 7.01 of the Base Indenture, the Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture, the Notes or the Subsidiary Guarantees, or that the Trustee determines in good faith is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability.

 

ARTICLE 7

 

[RESERVED]

 

76

 

ARTICLE 8

 

CONCERNING THE HOLDERS

 

Section 8.01.   Evidence of Action by Holders.

 

(a)           Solely for purposes of the Notes and not for purposes of any other Securities, Section 8.01 of the Base Indenture is hereby amended by adding the following sentence to the end of the second paragraph thereof:

 

Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder in the manner set forth in Section 14.03 of the Second Supplemental Indenture.

 

(b)           Solely for purposes of the Notes and not for purposes of any other Securities, Section 8.01 of the Base Indenture is hereby amended by adding the following paragraphs after the second paragraph thereof:

 

Notwithstanding the foregoing, the Company may not set a record date for, and the provisions of this Section 8.01 shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in this paragraph.  The Trustee may set any day as a record date for the purpose of determining the Holders entitled to join in the giving or making of (1) any notice of Default under Section 6.01(a) of the Second Supplemental Indenture, (2) any declaration of acceleration referred to in Section 6.02 of the Second Supplemental Indenture, (3) any direction referred to in Section 6.05 of the Base Indenture or (4) any request to pursue a remedy as permitted in Section 6.04 of the Base Indenture.  If any record date is set pursuant to this paragraph, the Holders on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless made, given or taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Notes or each affected Holder, as applicable, on such record date.  Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company and to each Holder in the manner set forth in Section 14.03 of the Second Supplemental Indenture.

 

Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular Note may do so with regard to all or any part of the principal amount of such Note or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.  Any notice given or action taken by a Holder or its agents with regard to different parts of such principal amount pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.

 

Without limiting the generality of the foregoing, a Holder, including a Depositary that is the Holder of a Global Note, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders, and a Depositary that is the Holder of a Global Note may provide its proxy or proxies to the Beneficial Owners of interests in any such Global Note through such Depositary’s standing instructions and customary practices.

 

The Company may fix a record date for the purpose of determining the Persons who are Beneficial Owners of interests in any Global Note held by a Depositary entitled under the procedures of such Depositary, if any, to make, give or take, by a proxy or

 

77

 

proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided in this Indenture to be made, given or taken by Holders; provided that if such a record date is fixed, only the Beneficial Owners of interests in such Global Note on such record date or their duly appointed proxy or proxies shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other action, whether or not such Beneficial Owners remain Beneficial Owners of interests in such Global Note after such record date.  No such request, demand, authorization, direction, notice, consent, waiver or other action shall be effective hereunder unless made, given or taken on or prior to the applicable Expiration Date.

 

With respect to any record date set pursuant to this Section 8.01, the party hereto that sets such record date may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Notes in the manner set forth in Section 14.03 of the Second Supplemental Indenture, on or prior to both the existing and the new Expiration Date.  If an Expiration Date is not designated with respect to any record date set pursuant to this Section 8.01, the party hereto which set such record date shall be deemed to have initially designated the day that is six months after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph.

 

ARTICLE 9

 

AMENDMENT, SUPPLEMENT AND WAIVER

 

Solely for purposes of the Notes and not for purposes of any other Securities, Sections 9.01 and 9.02 of the Base Indenture shall not apply to, and shall have no force and effect with respect to, the Notes, and any reference to Sections 9.01 and 9.02 of the Base Indenture shall be superseded by, and references thereto shall be deemed to refer to, Sections 9.01 and 9.02, as applicable, of this Second Supplemental Indenture.

 

Section 9.01.   Without Consent of Holders.

 

(a)           Notwithstanding Section 9.02, without the consent of any Holder, the Company, the Subsidiary Guarantors and the Trustee may amend this Indenture, the Notes and the Subsidiary Guarantees to:

 

(1)                                 cure any ambiguity, omission, defect, mistake or inconsistency;

 

(2)                                 provide for the assumption by a successor corporation of the obligations of the Company or any Subsidiary Guarantor under this Indenture, the Notes and the Subsidiary Guarantees;

 

(3)                                 provide for or facilitate the issuance of uncertificated Notes in addition to or in place of certificated Notes;

 

(4)                                 comply with the rules of any applicable Depositary;

 

78

 

(5)                                 add Guarantees with respect to the Notes or release a Subsidiary Guarantor from its obligations under its Subsidiary Guarantee or this Indenture in accordance with the applicable provisions of this Indenture;

 

(6)                                 secure the Notes and Subsidiary Guarantees;

 

(7)                                 add to the covenants of the Company and the Restricted Subsidiaries or Events of Default for the benefit of the Holders or to make changes that would provide additional rights to the Holders, or surrender any right or power conferred upon the Company or any Subsidiary Guarantor;

 

(8)                                 make any change that does not adversely affect the rights of any Holder in any material respect;

 

(9)                                 comply with any requirement of the SEC in connection with the qualification or maintaining the qualification of this Indenture under the Trust Indenture Act;

 

(10)                          provide for the appointment of a successor trustee; provided that the successor trustee is otherwise qualified and eligible to act as such under the terms of this Indenture;

 

(11)                          conform the text of this Indenture, the Notes or the Subsidiary Guarantees to any provision of the “Description of Notes” section of the Company’s Preliminary Prospectus Supplement, dated as of July 12, 2013, to the extent that such provision in such “Description of Notes” section was intended to be a verbatim recitation of a provision of this Indenture, the Notes or the Subsidiary Guarantees; or

 

(12)                          provide for or confirm the issuance of Additional Notes in accordance with the terms of this Indenture.

 

(b)           Upon the request of the Company, and upon receipt by the Trustee of the documents described in Section 14.06 of the Base Indenture, the Trustee shall join with the Company and the Subsidiary Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.  Notwithstanding the foregoing, no Opinion of Counsel shall be required in connection with the addition of a Subsidiary Guarantor under this Indenture upon execution and delivery by such Guarantor and the Trustee of a supplemental indenture to this Indenture, the form of which is attached as Exhibit B, and delivery of an Officers’ Certificate, except as provided in Section 5.01(c).

 

(c)           After an amendment, supplement or waiver under this Section 9.01 becomes effective, the Company will mail to the Holders, or deliver in accordance with the Applicable Procedures, a notice briefly describing such amendment, supplement or waiver.  However, the failure of the Company to give such notice to all the Holders, or any defect in the notice, will not impair or affect the validity of any such amendment, supplement or waiver.

 

Section 9.02.   With Consent of Holders.

 

(a)           Except as provided in Section 9.01 and this Section 9.02, the Company, the Subsidiary Guarantors and the Trustee may amend or supplement this Indenture, the Notes and the Subsidiary Guarantees with the consent of the Holders of a majority in principal amount of the Notes then

 

79

 

outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes) and, subject to Section 6.04 of the Base Indenture, as amended by Section 6.04, and Section 6.08 of the Base Indenture, any existing or past Default or Event of Default (other than a Default or Event of Default in the payment of the principal, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Notes or the Subsidiary Guarantees may be waived with the consent of the Holders of a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes).  Sections 8.03 and 8.04 of the Base Indenture shall determine which Notes are considered to be “outstanding” for the purposes of this Section 9.02.

 

(b)           Upon the request of the Company, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders as aforesaid, and upon receipt by the Trustee of the documents described in Section 14.06 of the Base Indenture, the Trustee shall join with the Company and the Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly 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 amended or supplemental indenture.

 

(c)           It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver.  It shall be sufficient if such consent approves the substance of such proposed amendment, supplement or waiver.  A consent to any amendment, supplement or waiver of this Indenture, the Notes or the Subsidiary Guarantee by any Holder given in connection with a tender of such Holder’s Notes will not be rendered invalid by such tender.

 

(d)           After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company will mail to the Holders, or deliver in accordance with the Applicable Procedures, a notice briefly describing such amendment, supplement or waiver.  However, the failure of the Company to give such notice to all the Holders, or any defect in the notice, will not impair or affect the validity of any such amendment, supplement or waiver.

 

(e)           Without the consent of each affected Holder, an amendment, supplement or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):

 

(1)                                 reduce the principal amount of Notes whose Holders must consent to an amendment;

 

(2)                                 reduce the rate of or change the stated time for payment of interest on any Note;

 

(3)                                 reduce the principal of or extend the Stated Maturity of any Note;

 

(4)                                 waive a Default or Event of Default in the payment of principal of, or interest or premium, if any, on the Notes issued thereunder (except a rescission of acceleration of the Notes issued thereunder by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes with respect to a nonpayment default and a waiver of the payment default that resulted from such acceleration);

 

(5)                                 reduce the premium payable upon the redemption or repurchase of any Note or change the time at which any Note may be redeemed or repurchased pursuant to Section 3.03 or, after a Change of Control has occurred, pursuant to Section 4.12, whether through an amendment or waiver of provisions in the covenants or otherwise;

 

80

 

(6)                                 make any Note payable in a currency other than that stated in the Note;

 

(7)                                 impair the right of any Holder to receive payment of principal, premium, if any, and interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes (provided that the rescission of an acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes with respect to an Event of Default other than the nonpayment of principal, premium, if any, and interest on the Notes pursuant to Section 6.02(c) shall not be deemed to impair the right of any Holder to receive payment of principal, premium, if any, or interest on such Holder’s Notes);

 

(8)                                 make any change in the amendment provisions that require each Holder’s consent or in the waiver provisions;

 

(9)                                 modify the Subsidiary Guarantees of any Significant Subsidiary or group of Subsidiary Guarantors that, taken together (as of the date of the latest audited consolidated financial statements for the Company and its consolidated Subsidiaries), would constitute a Significant Subsidiary in any manner, taken as a whole, materially adverse to the Holders;

 

(10)                          release any Subsidiary Guarantor that is a Significant Subsidiary or group of Restricted Subsidiaries that taken together (as of the date of the latest audited consolidated financial statements for the Company and its consolidated Subsidiaries), would constitute a Significant Subsidiary from any of its obligations under its Subsidiary Guarantee or this Indenture, except in compliance with the terms thereof; or

 

(11)                          make the Notes or the Subsidiary Guarantees subordinated in right of payment to any other obligations.

 

Section 9.03.   Compliance with Trust Indenture Act.

 

Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the Trust Indenture Act as then in effect.

 

Section 9.04.   Revocation and Effect of Consents.

 

(a)           Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note.  However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective.  An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

 

(b)           The Company may, but shall not be obligated to, fix a record date pursuant to Article VIII of the Base Indenture, as amended by Article 8 of the Second Supplemental Indenture, for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver.

 

81

 

Section 9.05.   Notation on or Exchange of Notes.

 

(a)           The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated.  The Company in exchange for all Notes may issue and the Trustee shall, upon receipt of a Company Order, authenticate new Notes that reflect the amendment, supplement or waiver.

 

(b)           Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

 

Section 9.06.   Trustee to Sign Amendments, etc.

 

The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 9 if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee.  In executing any amendment, supplement or waiver, the Trustee shall be entitled to receive and shall be fully protected in relying upon, in addition to the documents required by Section 14.06 of the Base Indenture, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amendment, supplement or waiver is authorized or permitted by this Indenture and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Company and any Guarantor party thereto, enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03).

 

Section 9.07.   Payment for Consent.

 

The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to all Holders and is paid to all Holders that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or amendment; provided that if such consents, waivers or amendments are sought in connection with an exchange offer where participation in such exchange offer is limited to Holders who are “qualified institutional buyers” as defined in Rule 144A under the Securities Act, or non-U.S. persons, within the meaning given to such term in Regulation S under the Securities Act, then such consideration need only be offered to all Holders to whom the exchange offer is made and to be paid to all such Holders that consent, waive or agree to amend in such time frame.

 

ARTICLE 10

 

GUARANTEES

 

Section 10.01.   Guarantee.

 

(a)           Subject to this Article 10, each of the Subsidiary Guarantors hereby, jointly and severally, irrevocably and unconditionally guarantees, on a senior unsecured basis, to each Holder and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that: (1) the principal, premium, if any, and interest on the Notes shall be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal and interest on the Notes, if any, if lawful, and all other Obligations of the Company to the Holders or the Trustee hereunder or under the Notes shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (2) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise collectively, the

 

82

 

“Guaranteed Obligations.”  Failing payment by the Company when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Subsidiary Guarantors shall be jointly and severally obligated to pay the same immediately.  Each Subsidiary Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

 

(b)           The Subsidiary Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor.  Each Subsidiary Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that this Subsidiary Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture, or pursuant to Section 10.06.

 

(c)           Each of the Subsidiary Guarantors also agrees, jointly and severally, to pay any and all costs and expenses (including reasonable attorneys’ fees and expenses) Incurred by the Trustee or any Holder in enforcing any rights under this Section 10.01.

 

(d)           If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Subsidiary Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to the Company or the Subsidiary Guarantors, any amount paid either to the Trustee or such Holder, this Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

 

(e)           Each Subsidiary Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders or the Trustee in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.  Each Subsidiary Guarantor further agrees that, as between the Subsidiary Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (1) the maturity of the obligations guaranteed hereby may be accelerated as provided in Section 6.02 for the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such obligations as provided in Section 6.02, such obligations (whether or not due and payable) shall forthwith become due and payable by the Subsidiary Guarantors for the purpose of this Subsidiary Guarantee.  The Subsidiary Guarantors shall have the right to seek contribution from any non-paying Subsidiary Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Subsidiary Guarantees.

 

(f)            Each Subsidiary Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Company for liquidation or reorganization, should the Company become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Company’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes or the Subsidiary Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made.  In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

 

83

 

(g)           In case any provision of any Subsidiary Guarantee shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

(h)           Each payment to be made by a Subsidiary Guarantor in respect of its Subsidiary Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

 

Section 10.02.   Limitation on Subsidiary Guarantor Liability.

 

Each Subsidiary Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Subsidiary Guarantee of such Subsidiary Guarantor not constitute a fraudulent conveyance or a fraudulent transfer for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Subsidiary Guarantee.  To effectuate the foregoing intention, the Trustee, the Holders and the Subsidiary Guarantors hereby irrevocably agree that the obligations of each Subsidiary Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Subsidiary Guarantor that are relevant under such laws and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under this Article 10, result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law.  Each Subsidiary Guarantor that makes a payment under its Subsidiary Guarantee will be entitled upon payment in full of all Guaranteed Obligations under this Indenture to a contribution from each other Subsidiary Guarantor in an amount equal to such other Subsidiary Guarantor’s pro rata portion of such payment based on the respective net assets of all the Subsidiary Guarantors at the time of such payment, determined in accordance with GAAP.

 

Section 10.03.   Execution and Delivery.

 

(a)           To evidence its Subsidiary Guarantee set forth in Section 10.01, each Subsidiary Guarantor hereby agrees that a supplemental indenture to this Indenture, the form of which is attached as Exhibit B, shall be executed on behalf of such Subsidiary Guarantor by an Officer or person holding an equivalent title.

 

(b)           Each Subsidiary Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 10.01 shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Subsidiary Guarantee on the Notes.

 

(c)           If an Officer whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Subsidiary Guarantees shall be valid nevertheless.

 

(d)           The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of the Subsidiary Guarantors.

 

(e)           If required by Section 4.13, the Company shall cause any newly created or acquired Restricted Subsidiary to comply with the provisions of Section 4.13 and this Article 10, to the extent applicable.

 

84

 

Section 10.04.      Subrogation.

 

Each Subsidiary Guarantor shall be subrogated to all rights of Holders against the Company in respect of any amounts paid by any Subsidiary Guarantor pursuant to the provisions of Section 10.01; provided that, if an Event of Default has occurred and is continuing, no Subsidiary Guarantor shall be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Company under this Indenture or the Notes shall have been paid in full.

 

Section 10.05.      Benefits Acknowledged.

 

Each Subsidiary Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Subsidiary Guarantee are knowingly made in contemplation of such benefits.

 

Section 10.06.      Release of Subsidiary Guarantees.

 

(a)           A Subsidiary Guarantee by a Subsidiary Guarantor shall be automatically and unconditionally released and discharged, and no further action by such Subsidiary Guarantor, the Company or the Trustee shall be required for the release of such Subsidiary Guarantor’s Subsidiary Guarantee, upon:

 

(1)                                 (A)                               any sale, exchange or transfer (by merger or otherwise) of the Capital Stock of such Subsidiary Guarantor, following which such Subsidiary Guarantor ceases to be a direct or indirect Restricted Subsidiary of the Company if such sale, exchange or transfer does not constitute an Asset Disposition or is made in compliance with Sections 4.09 and 5.01;

 

(B)                               if such Subsidiary Guarantor is dissolved or liquidated in accordance with the provisions of this Indenture;

 

(C)                               the release or discharge of the Guarantee by such Subsidiary Guarantor of the Indebtedness that resulted in the creation of such Subsidiary Guarantee, except a discharge or release as a result of payment under such Guarantee by such Subsidiary Guarantor (it being understood that a release subject to a contingent reinstatement is still a release, and if any such Indebtedness of such Subsidiary Guarantor under such Guarantee is so reinstated, such Subsidiary Guarantee shall also be reinstated);

 

(D)                               the designation of any Restricted Subsidiary that is a Subsidiary Guarantor as an Unrestricted Subsidiary in compliance with the applicable provisions of this Indenture; or

 

(E)                                the exercise by the Company of its legal defeasance option or covenant defeasance option set forth in Article XIII of the Base Indenture, as amended by Article 13 of this Second Supplemental Indenture, or the discharge of the Company’s obligations under this Indenture in accordance with the terms of Article XI of the Base Indenture, as amended by Article 11 of this Second Supplemental Indenture; and

 

(2)                                 in the case of clause (1)(A) above only, the Company delivering to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in this Indenture relating to such transaction have been complied with.

 

85

 

(b)           At the written request of the Company, the Trustee shall execute and deliver any documents reasonably required in order to evidence such release, discharge and termination in respect of the applicable Subsidiary Guarantee.

 

Section 10.07.      Further Assurances.

 

The Company hereby covenants and agrees, in the event that Subsidiary Guarantees are to be issued pursuant to this Indenture, to file (i) any post-effective amendment to the Company’s then effective shelf registration statement and (ii) any other filing required by the SEC in order to register such Subsidiary Guarantees under the Securities Act.

 

ARTICLE 11

 

SATISFACTION AND DISCHARGE

 

Solely for purposes of the Notes and not for purposes of any other Securities, Section 11.01 of the Base Indenture is hereby amended and restated in its entirety as set forth below.  In addition, references in Article XI of the Base Indenture to “Government Obligations” shall be deemed to refer to “U.S. Government Obligations,” as defined in Section 1.01.

 

Section 11.01.      Satisfaction and Discharge of Indenture

 

(a)           This Indenture will be discharged, and will cease to be of further effect as to all Notes, when either:

 

(1)                                 either:

 

(a)                                 all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, have been delivered to the Trustee for cancellation; or

 

(b)                                 all Notes not theretofore delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise, will become due and payable within one year or may be called for redemption within one year under arrangements in accordance with this Indenture, and the Company or any Subsidiary Guarantor has irrevocably deposited or caused to be deposited with the Trustee, as trust funds in trust solely for the benefit of the Holders of the Notes, U.S. dollars or U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the date of maturity or redemption, as the case may be;

 

(2)                                 no Default or Event of Default has occurred and is continuing on the date of the deposit or will occur as a result of the deposit (other than a Default resulting from borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing);

 

(3)                                 the Company or any Subsidiary Guarantor has paid or caused to be paid all sums payable by the Company on the date of the deposit under this Indenture; and

 

86

 

(4)                                 the Company has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes issued hereunder at maturity or the redemption date, as the case may be.

 

(b)           In addition, if the Company requests for the Trustee to sign any documents in connection with the satisfaction and discharge, the Company must deliver an Officers’ Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions) to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

 

(c)           Notwithstanding the foregoing Section 11.01(a) and (b), if money shall have been deposited pursuant to Section 11.01(a)(1)(b) of this Second Supplemental Indenture, then Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10 of the Base Indenture, as amended by this Second Supplemental Indenture, shall survive until the date of maturity or redemption, as the case may be, and Sections 7.06 and 11.04 of the Base Indenture shall survive to such date and thereafter.

 

ARTICLE 12

 

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

 

Solely for purposes of the Notes and not for purposes of any other Securities, Article XII of the Base Indenture is hereby supplemented by adding the following:

 

No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Company or any of the Subsidiary Guarantors shall have any liability for any obligations of the Company or the Restricted Subsidiaries under the Notes, this Indenture, the Subsidiary Guarantees, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes and the Subsidiary Guarantees.

 

ARTICLE 13

 

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 13.01.      Company’s Option to Effect Legal Defeasance or Covenant Defeasance

 

Solely for purposes of the Notes and not for purposes of any other Securities, Section 13.01 of the Base Indenture is hereby amended by adding the following sentence at the end thereof:

 

If the Company exercises the legal defeasance or covenant defeasance option, any Subsidiary Guarantees in effect at such time will be automatically released.

 

Section 13.02.      Legal Defeasance.

 

The Notes shall be subject to legal defeasance in accordance with Section 13.02 of the Base Indenture.

 

Section 13.03.      Covenant Defeasance.

 

The Notes shall be subject to covenant defeasance in accordance with Section 13.03 of the Base Indenture, as amended hereby.  Solely for purposes of the Notes and not for purposes of any

 

87

 

other Securities, Section 13.03 of the Base Indenture is hereby amended and restated in its entirety as follows:

 

Upon the Company’s exercise of its option to have this Section 13.03 applied to the Notes, (1) the Company and the Subsidiary Guarantors shall be released from their obligations under the covenants contained in Sections 4.05, 4.06 and 4.07 of the Base Indenture, and Sections 3.05, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14 and 5.01(a)(4) of the Second Supplemental Indenture with respect to the outstanding Notes, and the Subsidiary Guarantors shall be deemed to have been discharged from their obligations with respect to all Subsidiary Guarantees, on and after the date the conditions set forth in Section 13.04 are satisfied (“Covenant Defeasance”), and the Notes shall thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes).  For this purpose, Covenant Defeasance means that, with respect to this Indenture and the outstanding Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 of the Second Supplemental Indenture, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby.  In addition, upon the Company’s exercise of its Covenant Defeasance option, subject to the satisfaction of the conditions set forth in Section 13.04 of the Second Supplemental Indenture, an Event of Default specified in Section 6.01(a)(3) of the Second Supplemental Indenture that resulted solely from the failure of the Company to comply with Section 5.01(a)(4) of the Second Supplemental Indenture or Sections 4.12, 6.01(a)(4) (only with respect to covenants that are released as a result of such Covenant Defeasance), 6.01(a)(5), 6.01(a)(6) (solely with respect to Significant Subsidiaries or any group of Restricted Subsidiaries that, taken together (as of the date of the latest audited financial statements of the Company and its consolidated Subsidiaries) would constitute a Significant Subsidiary), 6.01(a)(7) of the Second Supplemental Indenture (solely with respect to Significant Subsidiaries or any group of Restricted Subsidiaries that, taken together (as of the date of the latest audited financial statements of the Company and its consolidated Subsidiaries) would constitute a Significant Subsidiary), 6.01(a)(8) or 6.01(a)(9) of the Second Supplemental Indenture, in each case, shall not constitute an Event of Default.

 

Section 13.04.      Conditions to Legal or Covenant Defeasance.

 

Solely for purposes of the Notes and not for purposes of any other Securities, Section 13.04 of the Base Indenture is hereby amended and restated in its entirety as follows:

 

The following shall be the conditions to the application of Section 13.02 or Section 13.03 to the Notes:

 

(1)                                 the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, U.S. dollars or U.S. Government Obligations, or a combination of U.S. dollars and U.S. Government Obligations, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public

 

88

 

accountants in the event a deposit of U.S. Government Obligations is made, to pay the principal of, or interest and premium, if any, on the outstanding Notes issued thereunder on the Stated Maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date;

 

(2)                                 in the case of legal Defeasance, the Company has delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee stating that, subject to customary assumptions and exclusions, (a) the Company has received from, or there has been published by, the U.S. Internal Revenue Service a ruling or (b) since the date of this Indenture, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel will confirm that, the Holders and Beneficial Owners of the respective outstanding Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such legal Defeasance had not occurred;

 

(3)                                 in the case of Covenant Defeasance, the Company has delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee stating that, subject to customary assumptions and exclusions, the Holders and Beneficial Owners of the respective outstanding Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred;

 

(4)                                 such legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than this Indenture) to which the Company or any of the Restricted Subsidiaries is a party or by which the Company or any of the Restricted Subsidiaries is bound;

 

(5)                                 no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowings), and the deposit will not result in a breach or violation of, or constitute a default under, any other material instrument (other than this Indenture) to which the Company is a party or by which the Company is bound;

 

(6)                                 the Company must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others;

 

(7)                                 the Company must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions), each stating that all conditions precedent relating to the legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with; and

 

89

 

(8)                                 the Company has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be (which instructions may be contained in the Officers’ Certificate referred to in clause (7) of this Section 13.04).

 

ARTICLE 14

 

MISCELLANEOUS

 

Solely for purposes of the Notes and not for purposes of any other Securities, Section 14.03 of the Base Indenture is hereby amended and restated as set forth below.  In addition, Sections 14.11 and 14.12 of the Base Indenture shall not apply, and shall be deleted, solely with respect to the Notes.  Solely for purposes of the Notes and not for purposes of any other Securities, new Sections 14.11 through 14.22 are hereby added to Article XIV of the Base Indenture.

 

Section 14.03.      Notices.

 

(a)           Any notice or communication to the Company, any Subsidiary Guarantor or the Trustee is duly given if in writing and (1) delivered in person, (2) mailed by first-class mail (certified or registered, return receipt requested), postage prepaid, or overnight air courier guaranteeing next day delivery or (3) sent by facsimile or electronic transmission, to its address:

 

if to the Company or any Subsidiary Guarantor:

 

c/o American Equity Investment Life Holding Company

6000 Westown Parkway

West Des Moines, Iowa 50766
 Fax No.: (515) 221-0744
 Email: bkunkel@american-equity.com
 Attention: William R. Kunkel, Esq.

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP
 155 N. Wacker Drive

Chicago, Illinois 60606
 Fax No: (312) 407 - 8580
 Email: shilpi.gupta@skadden.com; steve.forbes@skadden.com
 Attention: Shilpi Gupta, Esq.; Steven H. Forbes, Esq.

 

if to the Trustee:

 

Wells Fargo Bank, National Association

Corporate Trust Services

MAC N-9311-115

625 Marquette Avenue, 11th Floor

Minneapolis, MN  55479

Fax No.: (612) 667 - 2160

Email: Richard.H.Prokosch@wellsfargo.com

Attention: Rick Prokosch, Vice President

 

90

 

The Company, any Subsidiary Guarantor or the Trustee, by like notice, may designate additional or different addresses for subsequent notices or communications.

 

(b)           All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; on the first date of which publication is made, if by publication; five calendar days after being deposited in the mail, postage prepaid, if mailed by first-class mail; the next Business Day after timely delivery to the courier, if mailed by overnight air courier guaranteeing next day delivery; when receipt acknowledged, if sent by facsimile or electronic transmission; provided that any notice or communication delivered to the Trustee shall be deemed effective upon actual receipt thereof.

 

(c)           Any notice or communication to a Holder shall be mailed by first-class mail (certified or registered, return receipt requested) or by overnight air courier guaranteeing next day delivery to its address shown on the Security Register or by such other delivery system as the Holder agrees to accept.  Any notice or communication shall also be so mailed to any Person described in Trust Indenture Act Section 313(c), to the extent required by the Trust Indenture Act.  Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.

 

(d)           Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

 

(e)           Notwithstanding any other provision herein, where this Indenture or any Note provides for notice of any event to any Holder of an interest in a Global Note (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depositary for such Note (or its designee), according to the Applicable Procedures, if any, prescribed for the giving of such notice.

 

(f)            The Trustee agrees to accept and act upon notice, instructions or directions pursuant to this Indenture sent by unsecured facsimile or electronic transmission; provided, however, that (1) the party providing such written notice, instructions or directions, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (2) such originally executed notice, instructions or directions shall be signed by an authorized representative of the party providing such notice, instructions or directions.  The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reasonable reliance upon and compliance with such notice, instructions or directions notwithstanding such notice, instructions or directions conflict or are inconsistent with a subsequent notice, instructions or directions.

 

(g)           If a notice or communication is sent in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

 

(h)           If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time.

 

Section 14.11.      Communication by Holders with Other Holders.

 

Holders may communicate pursuant to Trust Indenture Act Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes.  The Company, the Subsidiary Guarantors, the Trustee, the Security Registrar and anyone else shall have the protection of Trust Indenture Act Section 312(c).

 

91

 

Section 14.12.      Rules by Trustee and Agents.

 

The Trustee may make reasonable rules for action by or at a meeting of Holders.  The Security Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

 

Section 14.13.                   Governing Law.

 

THIS SECOND SUPPLEMENTAL INDENTURE, THE NOTES AND ANY SUBSIDIARY GUARANTEES WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

Section 14.14.      Waiver of Jury Trial.

 

EACH OF THE COMPANY, THE SUBSIDIARY GUARANTORS 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, THE SUBSIDIARY GUARANTEES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 14.15.      Force Majeure.

 

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

 

Section 14.16.      No Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Restricted Subsidiaries or of any other Person.  Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

Section 14.17.      Successors.

 

All agreements of the Company in this Indenture and the Notes shall bind its successors.  All agreements of the Trustee in this Indenture shall bind its successors.  All agreements of each Subsidiary Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 10.06.

 

Section 14.18.      Severability.

 

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

 

92

 

Section 14.19.      Table of Contents, Headings, etc.

 

The Table of Contents, Cross-Reference Table 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 of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

 

Section 14.20.      Facsimile and PDF Delivery of Signature Pages.

 

The exchange of copies of this Indenture and of signature pages by facsimile or portable document format (“PDF”) transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

Section 14.21.      U.S.A. PATRIOT Act.

 

The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. PATRIOT Act, the Trustee is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee.  The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. PATRIOT Act.

 

Section 14.22.      The Trustee.

 

The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Second Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Company. In entering into the Second Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee, whether or not elsewhere herein so provided.

 

[Signatures on following page]

 

93

 

	
 
    	
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ted M. Johnson
    
	
 
    	
 
    	
Name:
    	
Ted M. Johnson
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer and Treasurer
    

 

[Signature page to Indenture for 6.625% Senior Notes due 2021]

 

 

	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as   Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard Prokosch
    
	
 
    	
 
    	
Name:
    	
Richard Prokosch
    
	
 
    	
 
    	
Title:
    

 

[Signature page to Indenture for 6.625% Senior Notes due 2021]

 

 

APPENDIX A

 

PROVISIONS RELATING TO INITIAL NOTES AND

ADDITIONAL NOTES

 

Section 1.1            Definitions.

 

(a)  Capitalized Terms.

 

Capitalized terms used but not defined in this Appendix A have the meanings given to them in this Indenture.  The following capitalized terms have the following meanings:

 

“Applicable Procedures” means, with respect to any transfer or transaction involving a Global Note or beneficial interest therein, the rules and procedures of the Depositary for such Global Note, Euroclear or Clearstream, in each case to the extent applicable to such transaction and as in effect from time to time.

 

“Clearstream” means Clearstream Banking, Société Anonyme, or any successor securities clearing agency.

 

“Euroclear” means Euroclear Bank S.A./N.Y., as operator of Euroclear systems Clearance System or any successor securities clearing agency.

 

(b) Other Definitions.

 

	
Term:
    	
 
    	
Defined in Section:
    
	
 
    	
 
    	
 
    
	
“Agent Members”
    	
 
    	
2.1(b)
    
	
“Global Notes Legend”
    	
 
    	
2.3(d)
    

 

Section 2.1            Form and Dating

 

(a)  Global Notes.  Notes shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form, numbered N-1 upward, in each case without interest coupons and bearing the Global Notes Legend, which Global Notes shall be deposited on behalf of the purchasers of the Notes represented thereby with the Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Company and authenticated by the Trustee as provided in this Indenture.  Each Global Note shall represent such of the outstanding Notes as shall be specified in the “Schedule of Exchanges of Interests in the Global Note” attached thereto, and each shall provide that it shall represent the aggregate principal amount of Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as applicable, to reflect exchanges and redemptions.  Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder pursuant to Section 2.05 of the Base Indenture and Section 2.3(c) of this Appendix A.

 

(b)  Book-Entry Provisions.  This Section 2.1(b) shall apply only to a Global Note deposited with or on behalf of the Depositary.

 

The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b) and Section 2.2 of this Appendix A and pursuant a Company Order, authenticate and deliver initially one or more Global Notes that (i) shall be registered in the name of the Depositary for such Global Note or

 

 

Global Notes or the nominee of such Depositary and (ii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions or held by the Trustee as Custodian.

 

Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary or by the Trustee as Custodian or under such Global Note, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Note for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Note.

 

(c)  Definitive Notes.  Except as provided in Section 2.3 or Section 2.4 of this Appendix A, owners of beneficial interests in Global Notes shall not be entitled to receive physical delivery of Definitive Notes.

 

Section 2.2            Authentication.  The Trustee shall authenticate and make available for delivery upon receipt of a Company Order (a) Initial Notes for original issue on the Issue Date in an aggregate principal amount of $400,000,000 and (b) subject to terms of this Indenture, Additional Notes.  Such order shall specify the amount of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated and whether the Notes are to be Initial Notes or Additional Notes.

 

Section 2.3            Transfer and Exchange.

 

(a)  Transfer and Exchange of Definitive Notes for Definitive Notes.  When Definitive Notes are presented to the Security Registrar with a request:

 

(i)  to register the transfer of such Definitive Notes; or

 

(ii)  to exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations,

 

the Security Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Definitive Notes surrendered for transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Security Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing.

 

(b)  Transfer of a Definitive Note for a Beneficial Interest in a Global Note.  Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Security Registrar, together with written instructions directing the Trustee to make, or to direct the Custodian to make, an adjustment on its books and records with respect to such Global Note to reflect an increase in the aggregate principal amount of the Notes represented by the Global Note, such instructions to contain information regarding the Depositary account to be credited with such increase, the Trustee shall cancel such Definitive Note and cause, or direct the Custodian to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Custodian, the aggregate principal amount of Notes represented by the Global Note to be increased by the aggregate principal amount of the Definitive Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the principal amount of the Definitive Note so canceled.  If no Global Notes are then

 

2

 

outstanding, the Company may issue and the Trustee shall authenticate, upon receipt of a Company Order, a new Global Note in the appropriate principal amount.

 

(c)  Transfer and Exchange of Global Notes.  (i)  The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depositary, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depositary therefor.  A transferor of a beneficial interest in a Global Note shall deliver to the Security Registrar a written order given in accordance with the Depositary’s procedures containing information regarding the participant account of the Depositary to be credited with a beneficial interest in such Global Note or another Global Note; and such account shall be credited in accordance with such order with a beneficial interest in the applicable Global Note, and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Note being transferred.

 

(ii)  If the proposed transfer is a transfer of a beneficial interest in one Global Note to a beneficial interest in another Global Note, the Security Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Security Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of the Global Note from which such interest is being transferred.

 

(iii)  Notwithstanding any other provisions of this Appendix A (other than the provisions set forth in Section 2.4 of this Appendix A), a Global Note may not be transferred except as a whole and not in part 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)  Legends. Each Global Note shall bear the following legend (“Global Notes Legend”), and this Global Notes Legend shall, solely for purposes of the Notes and not for purposes of any other Securities, be deemed to amend Section 2.11(a)(iv) of the Base Indenture:

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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.

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSORS NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

3

 

Any Note issued with original issue discount will also bear the following additional legend (“OID Notes Legend”):

 

THIS NOTE HAS BEEN ISSUED WITH “ORIGINAL ISSUE DISCOUNT” (WITHIN THE MEANING OF SECTION 1272 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED). UPON WRITTEN REQUEST, THE ISSUER WILL PROMPTLY MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE THE FOLLOWING INFORMATION: (1) THE ISSUE PRICE AND DATE OF THE NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE AND (3) THE YIELD TO MATURITY OF THE NOTE. HOLDERS SHOULD CONTACT THE TREASURER OF AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY AT 6000 WESTOWN PARKWAY, WEST DES MOINES, IOWA 50766, UNITED STATES OF AMERICA.

 

(e)  Cancellation or Adjustment of Global Note.  At such time as all beneficial interests in a Global Note have either been exchanged for Definitive Notes, transferred, redeemed, repurchased or canceled, such Global Note shall be returned by the Depositary to the Trustee for cancellation or retained and canceled by the Trustee.  At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for Definitive Notes, transferred in exchange for an interest in another Global Note, redeemed, repurchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced, and an adjustment shall be made on the books and records of the Trustee (if it is then the Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Custodian, to reflect such reduction.

 

(f)  Obligations with Respect to Transfers and Exchanges of Notes.

 

(i)  To permit registrations of transfers and exchanges, the Company shall execute, and the Trustee shall authenticate, Definitive Notes and Global Notes at the Security Registrar’s request.

 

(ii) No service charge shall be made for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 2.06, 3.03(b) and 9.04 of the Base Indenture, as amended, and Sections 3.05, 4.09 and 4.12 of the Second Supplemental Indenture.

 

(iii)  All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.

 

(g)  No Obligation of the Trustee.

 

(i)  The Trustee shall have no responsibility or obligation to any Beneficial Owner of a Global Note, a member of, or a participant in the Depositary or any other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, Beneficial Owner or other Person (other than the Depositary) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Notes.  All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to the registered

 

4

 

Holders (which shall be the Depositary or its nominee in the case of a Global Note).  The rights of Beneficial Owners in any Global Note shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary.  The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any Beneficial Owners.

 

(ii)  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 Depositary participants, members or Beneficial Owners 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 2.4            Definitive Notes.

 

(a)  A Global Note deposited with the Depositary or with the Trustee as Custodian may be transferred to the Beneficial Owners thereof in the form of Definitive Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 of this Appendix A and only under the circumstances set forth in, and in accordance with, Section 2.11(b) of the Base Indenture; provided that solely for purposes of the Notes and not for purposes of any other Securities, Section 2.11(b) of the Base Indenture is hereby amended by adding the following sentence after the third sentence thereof:

 

In addition, if an Event of Default has occurred and is continuing and the Security Registrar has received a request from the Depositary, the Company will execute and, subject to Section 2.05, the Trustee will authenticate and deliver Definitive Notes in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Notes in exchange for such Global Notes.

 

(b)  Any Global Note that is transferable to the Beneficial Owners thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations.  Any portion of a Global Note transferred pursuant to this Section 2.4 shall be executed, authenticated and delivered only in denominations of $2,000 and integral multiples of $1,000 in excess thereof and registered in such names as the Depositary shall direct.

 

(c)  The registered Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

 

(d)  In the event of the occurrence of any of the events specified in Section 2.4(a)(i), (ii) or (iii) of this Appendix A, the Company shall promptly make available to the Trustee a reasonable supply of Definitive Notes in fully registered form without interest coupons.

 

5

 

EXHIBIT A

 

[FORM OF FACE OF NOTE]

 

[Insert the Global Notes Legend, if applicable, pursuant to the provisions of the Indenture]

 

[Insert the OID Notes Legend, if applicable, pursuant to the provisions of the Indenture.]

 

A-1

 

CUSIP  025676AL1

 

ISIN US025676AL13

 

GLOBAL NOTE

 

6.625% Senior Notes due 2021

 

	
No. N-     
    	
[Up   to] [$                            ]
    

 

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

 

promises to pay to [CEDE & CO.](1) [                              ] or registered assigns the principal sum [set forth on the Schedule of Exchanges of Interests in the Global Note attached hereto](2) [of $               (               Dollars)](3) on July 15, 2021.

 

Interest Payment Dates:  January 15 and July 15, commencing January 15, 2014.

 

Record Dates:  January 1 and July 1.

 

(1)       Include in Global Notes

 

(2)       Include in Global Notes

 

(3)       Include in Definitive Notes

 

A-2

 

IN WITNESS HEREOF, the Company has caused this instrument to be duly executed.

 

	
 
    	
AMERICAN   EQUITY INVESTMENT LIFE HOLDING COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes referred to in the within-mentioned Indenture:

 

	
 
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION, as Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

Dated: [                              ] [    ], [    ]

 

A-3

 

[Reverse Side of Note]

 

6.625% Senior Notes due 2021

 

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

 

1.             INTEREST.  American Equity Investment Life Holding Company, an Iowa corporation (the “Company”), promises to pay interest on the principal amount of this Note at 6.625% per annum from and including July 17, 2013 until but excluding maturity.  The Company shall pay interest semi-annually in arrears on January 15 and July 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”).  Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including the date of original issuance; provided that the first Interest Payment Date shall be January 15, 2014.  The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the interest rate on the Notes; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the interest rate on the Notes.  Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months.

 

2.             METHOD OF PAYMENT.  The Company shall pay interest on the Notes to the Persons who are registered holders of Notes at the close of business on January 1 or July 1 (whether or not a Business Day), as the case may be, immediately preceding the related Interest Payment Date, even if such Notes are canceled after such Record Date and on or before such Interest Payment Date, except as provided in Section 2.03 of the Base Indenture with respect to defaulted interest.  Principal, premium, if any, and interest on the Notes shall be payable at the office or agency of the Company maintained for such purpose; provided that, at the option of the Company, interest on the Notes may be paid by wire transfer or by mailing checks for such interest to or upon the written order of the holders thereof at their last address as they shall appear on the Security Registrar; provided further that payment by wire transfer of immediately available funds shall be required with respect to principal, premium, if any, and interest on all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent at least five Business Days prior to the applicable payment date.  Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

 

3.             PAYING AGENT AND SECURITY REGISTRAR.  Initially, Wells Fargo Bank, National Association, the Trustee under the Indenture, shall act as Paying Agent and Security Registrar.  The Company may change any Paying Agent or Security Registrar without notice to the Holders.  The Company or any Wholly Owned Subsidiary incorporated or organized within the United States of America may act as Paying Agent or Security Registrar.

 

4.             INDENTURE.  The Company issued the Notes under an Amended and Restated Indenture, dated as of April 22, 2004 (the “Base Indenture”) between the Company and U.S. Bank National Association, as supplemented by the First Supplemental Indenture dated as of July 17, 2013 (the “First Supplemental Indenture”), among the Company, U.S. Bank National Association and the Trustee and the Second Supplemental Indenture, dated as of July 17, 2013 (the “Second Supplemental Indenture” and, together with the Base Indenture and the First Supplemental Indenture, the “Indenture”), between the Company and the Trustee.  This Note is one of a duly authorized issue of notes of the Company designated as its 6.625% Senior Notes due 2021.  The Company shall be entitled to issue Additional Notes pursuant to Section 2.01 of the Base Indenture, as amended, and Sections 2.01 and 4.08 of the

 

A-4

 

Second Supplemental Indenture.  The Notes and any Additional Notes issued under the Indenture shall be treated as a single class of securities under the Indenture.  The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).  The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of such terms.  Any term used in this Note that is defined in the Indenture shall have the meaning assigned to it in the Indenture.  To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

 

5.             REDEMPTION AND REPURCHASE.  The Notes are subject to optional redemption, and may be the subject of an Offer to Purchase, as further described in the Indenture.  The Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes.

 

6.             DENOMINATIONS, TRANSFER, EXCHANGE.  The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof.  The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture.  The Security Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents, and Holders shall be required to pay any taxes and fees required by law or permitted by the Indenture.  The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part.

 

7.             PERSONS DEEMED OWNERS.  The registered Holder of a Note may be treated as its owner for all purposes.

 

8.             AMENDMENT, SUPPLEMENT AND WAIVER.  The Indenture or the Notes may be amended or supplemented as provided in the Indenture.

 

9.             DEFAULTS AND REMEDIES.  The Events of Default relating to the Notes are defined in Section 6.01 of the Base Indenture, as amended.  Upon the occurrence of an Event of Default, the rights and obligations of the Company, the Trustee and the Holders shall be as set forth in the applicable provisions of the Indenture.

 

10.          AUTHENTICATION.  This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose until authenticated by the manual signature of the Trustee.

 

11.          GOVERNING LAW.  THIS NOTE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

12.          CUSIP AND ISIN NUMBERS.  Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP and ISIN numbers to be printed on the Notes, and the Trustee may use CUSIP and ISIN numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

 

A-5

 

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture.  Requests may be made to the Company at the following address:

 

c/o American Equity Investment Life Holding Company

6000 Westown Parkway

West Des Moines, Iowa 50766

Fax No.: (515) 221-0744

Email: bkunkel@american-equity.com

Attention: William R. Kunkel, Esq.

 

A-6

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

	
(I) or   (we) assign and transfer this Note to:
    	
 
    
	
 
    	
(Insert   assignee’s legal name)
    
	
 
    
	
(Insert   assignee’s soc. sec. or tax I.D. no.)
    
	
 
    
	
 
    
	
 
    
	
 
    
	
(Print   or type assignee’s name, address and zip code)
    
	
and   irrevocably appoint
    	
 
    
	
to transfer this Note on the books of the   Company.  The agent may substitute   another to act for him.
    
			

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Your   Signature:
    	
 
    
	
 
    	
 
    	
 
    	
(Sign   exactly as your name appears on the face of this Note)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature   Guarantee*:
    	
 
    	
 
    
							

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-7

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Company pursuant to Section 4.09 or Section 4.12 of the Second Supplemental Indenture, check the appropriate box below:

 

	
 
    	
o Section 4.09
    	
 
    	
o Section 4.12
    	
 
    

 

If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.09 or Section 4.12 of the Second Supplemental Indenture, state the amount you elect to have purchased:

 

	
$
    	
(integral   multiples of $1,000, provided that   the unpurchased portion must be in a minimum principal amount of $2,000)
    

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Your   Signature:
    	
 
    
	
 
    	
 
    	
 
    	
(Sign   exactly as your name appears on the face of this Note)
    
	
 
    	
 
    	
Tax   Identification No.:
    	
 
    
	
 
    	
 
    	
 
    
	
Signature Guarantee*:
    	
 
    	
 
    
								

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-8

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

 

The initial outstanding principal amount of this Global Note is $                    .  The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global or Definitive Note for an interest in this Global Note, have been made:

 

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

 

*This schedule should be included only if the Note is issued in global form

 

A-9

 

EXHIBIT B

 

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS

 

Supplemental Indenture (this “Supplemental Indenture”), dated as of [                    ] [    ], 20[    ], among                                               (the “Guaranteeing Subsidiary”), a subsidiary of American Equity Investment Life Holding Company, an Iowa corporation (the “Company”), and Wells Fargo Bank, National Association, as trustee (the “Trustee”).

 

W I T N E S S E T H

 

WHEREAS, the Company has heretofore executed and delivered the Amended and Restated Indenture, dated as of April 22, 2004, between the Company and U.S. Bank National Association (the “Base Indenture”), as supplemented by the First Supplemental Indenture (the “First Supplemental Indenture”), dated as of July 17, 2013, among the Company, U.S. Bank National Association and the Trustee, and as further supplemented by the Second Supplemental Indenture, dated as of July 17, 2013, between the Company and the Trustee (together with the Base Indenture and the First Supplemental Indenture the “Indenture”) providing for the issuance of an unlimited aggregate principal amount of 6.625% Senior Notes due 2021 (the “Notes”);

 

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally Guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture; and

 

WHEREAS, pursuant to Section 9.01 of the Second Supplemental Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

 

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders as follows:

 

1.             Capitalized Terms.  Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

 

2.             Guarantor.  The Guaranteeing Subsidiary hereby agrees to be a Subsidiary Guarantor under the Indenture and to be bound by the terms of the Indenture applicable to Subsidiary Guarantors, including Article 10 of the Second Supplemental Indenture.

 

3.             Governing Law.  THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

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

 

5.             Counterparts.  The parties may sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.

 

B-1

 

6.             Headings.  The headings of the Sections of this Supplemental Indenture have been inserted for convenience of reference only, are not to be considered a part of this Supplemental Indenture and shall in no way modify or restrict any of the terms or provisions hereof.

 

B-2

 

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

 

 

	
 
    	
 
    	
[NAME OF GUARANTEEING SUBSIDIARY]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION, as   Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    

 

B-3Execution version

 

 

STOCK PURCHASE AGREEMENT

 

dated

 

July 9, 2013

 

by and among

 

Prime Acquisition Corp., a Cayman Islands
company,

 

as Parent

 

Prime BHN Luxembourg S.àr.l., a Luxembourg
company,

 

as LuxCo

 

BHN LLC, a New York limited liability company

 

as BHN

 

Delfin S.r.l., an Italian limited liability
company,

 

as Company,

 

and Davide Rigamonti, Cesare Lanati and
G.S.I. S.r.l.,

 

as the Sellers,

 

    	 

    	 

    

  

TABLE OF CONTENTS

 

	ARTICLE I DEFINITIONS 	1
	 	 
	ARTICLE II TERMS AND CONDITIONS OF THE PURCHASE AND SALE 	7
	2.1	Exchange	7
	2.2	Exchange Consideration	8
	2.3	Delivery of the Exchange Shares	8
	2.4	Closing	8
	2.5	Board of Directors	8
	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SELLERS 	8
	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT, LUXCO AND BHN 	9
	 	 
	ARTICLE V COVENANTS OF COMPANY AND SELLERS PENDING CLOSING 	9
	5.1	Conduct of the Business	9
	5.2	Access to Information	11
	5.3	Notices of Certain Events	11
	5.4	Exclusivity	12
	5.5	Annual Financial Statements	12
	5.6	SEC Filings	13
	5.7	Financial Information	13
	 	 	 
	ARTICLE VI COVENANTS OF Company and SELLERS 	13
	6.1	Confidentiality	13
	6.2	Injunctive Relief	13
	6.3	Best Efforts to Obtain Consents	14
	6.4	Financial Reporting	14
	 	 	 
	ARTICLE VII COVENANTS OF PARENT, LUXCO and BHN 	14
	7.1	Registration Statement	14
	7.2	Dividend	14
	7.3	Listing on NASDAQ	15
	7.4	Guaranty	15
	 	 	 
	ARTICLE VIII COVENANTS OF ALL PARTIES HERETO 	15
	8.1	Best Efforts; Further Assurances	15
	8.2	Confidentiality of Transaction	15
	8.3	Business Combination Tender Offer	15
	 	 	 
	ARTICLE IX CONDITIONS TO CLOSING 	16
	9.1	Condition to the Obligations of the Parties	16
	9.2	Conditions to Obligations of Parent, LuxCo and BHN	16
	9.3	Conditions to Obligations of Sellers and Company	18

 

    	i

    	 

    

 

TABLE OF CONTENTS (CONTINUED)

  

	 	Page
	 	 
	ARTICLE X INDEMNIFICATION 	19
	10.1	Indemnification of Parent, LuxCo and BHN	19
	10.2	Indemnification of Sellers	20
	10.3	Procedure	20
	10.4	Periodic Payments	22
	10.5	Right of Set Off	22
	10.6	Payment of Indemnification	22
	10.7	Insurance	22
	10.8	Survival of Indemnification Rights	22
	 	 	 
	ARTICLE XI DISPUTE RESOLUTION 	23
	11.1	Arbitration	23
	11.2	Waiver of Jury Trial; Exemplary Damages	24
	11.3	Attorneys’ Fees	25
	 	 	 
	ARTICLE XII TERMINATION 	25
	12.1	Termination Without Default; Expenses	25
	12.2	Termination Upon Default	26
	12.3	Survival	26
	 	 	 
	ARTICLE XIII MISCELLANEOUS 	26
	13.1	Notices	26
	13.2	Amendments; No Waivers; Remedies	28
	13.3	Arms’ Length Bargaining; no Presumption Against Drafter	28
	13.4	Publicity	29
	13.5	Expenses	29
	13.6	No Assignment or Delegation	29
	13.7	Governing Law	29
	13.8	Counterparts; Facsimile Signatures	29
	13.9	Entire Agreement	29
	13.10	Severability	29
	13.11	Construction of Certain Terms and References; Captions	30
	13.12	Further Assurances	30
	13.13	Third Party Beneficiaries	30
	13.14	Waiver	31

 

    	ii

    	 

    

  

STOCK PURCHASE AGREEMENT

 

This STOCK PURCHASE AGREEMENT
(the “Agreement”), dated as of July 9, 2013, by and among Prime Acquisition Corp., a Cayman Islands company
(“Parent”), Prime BHN Luxembourg S.àr.l., a Luxembourg company and wholly-owned subsidiary of Parent
(“LuxCo”), BHN LLC, a New York limited liability company (“BHN”), Delfin S.r.l., an Italian
limited liability company (the “Company”), Cesare Lanati, Davide Rigamonti and G.S.I. S.r.l. (“Sellers”).

 

WITNESSETH:

 

		A.	Parent was created specifically to acquire a target business within a set timeframe. Parent concluded
its initial public offering on March 25th, 2011. It raised $36 million from investors and a private placement from its
founders of about $1.6388 million;

 

		B.	In order to exploit certain investment opportunities in southern Europe, Parent has recently incorporated
LuxCo to serve as European investment platform to, among other things, invest in real estate assets located in southern Europe
from several Sellers listed on Schedule I; and

 

		C.	The Sellers presently owns all of the issued and outstanding Units of the Company;

 

		D.	The Company is the sole owner of the real properties and/or the lessees under the financial lease
agreements (a copy of which is attached as Exhibit A) relating to the real properties described in Exhibit B hereto.

   

The parties
accordingly agree as follows:

 

ARTICLE
I

DEFINITIONS

 

The following terms, as used herein, have
the following meanings:

 

1.1             
“2012 Period” is defined in Section 3.17 of Exhibit 3.

 

1.2             
“Action” means any legal action, suit, claim, investigation, hearing or proceeding, including any audit, claim
or assessment for Taxes or otherwise.

 

1.3             
“Additional Agreements” means the Voting Agreement, the Registration Rights Agreement, the Transaction Value
Agreement, the Escrow Agreement, the Pledge Agreement, the Stockholders Agreement, and the Deed.

 

1.4             
“Additional Parent SEC Documents” is defined in Section 4.11 of Exhibit 4.

 

    	 

    	 

    

  

1.5             
“Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled
by, or under common Control with such Person.

 

1.6             
“Arbitrator” is defined in Section 11.1(a).

 

1.7             
“Authority” means any governmental, regulatory or administrative body, agency or authority, any court or judicial
authority, any arbitrator, or any public, private or industry regulatory authority, whether international, national, Federal, state,
or local.

 

1.8             
“Basket” is defined in Section 10.1.

 

1.9             
“BHN” is defined in the Preamble.

 

1.10         
“BHN Termination Fee” is defined in Section 7.5.

 

1.11         
“Books and Records” means all books and records, ledgers, employee records, customer lists, files, correspondence,
and other records of every kind (whether written, electronic, or otherwise embodied) owned or used by a Person or in which a Person’s
assets, the Business or its transactions are otherwise reflected, other than stock books and minute books.

 

1.12         
“Business Day” means any day other than a Saturday, Sunday or a legal holiday on which commercial banking institutions
in New York, U.S.A. or Milan, Italy are authorized to close for business.

 

1.13         
“Business” means the Real Property, contracts, liabilities and assets relating to the Real Property, as identified
in Exhibits A and B.

 

1.14         
“Change in Cash” means a number equal to the Company’s cash and cash equivalents on the date that is three
Business Days prior to the Closing Date, minus the Company’s cash and cash equivalents on date hereof, each calculated in
accordance with IFRS.

 

1.15         
“Closing Date” is defined in Section 2.4.

 

1.16         
“Closing” is defined in Section 2.4.

 

1.17         
“Company” is defined in the Recitals.

 

1.18         
“Contract Subject to Consent” has the meaning provided in Section 3.6 of Exhibit 3.

 

1.19         
“Contracts” means the Leases, the loan agreements and all contracts, agreements, leases (including equipment
leases, car leases and capital leases), licenses, commitments, client contracts, statements of work (SOWs), sales and purchase
orders and similar instruments, oral or written relating to the Business, to which the Company is a party or by which any of the
Real Property is bound, including any agreement entered into by the Company in compliance with Section 5.1 after the signing hereof
and prior to the Closing, and all rights and benefits thereunder, including all rights and benefits thereunder with respect to
all cash and other property of third parties under the Sellers’ or the Company’s dominion or control.

 

    	2

    	 

    

  

1.20         
“Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction
of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise. “Controlled”,
“Controlling” and “under common Control with” have correlative meanings. Without limiting the foregoing
a Person (“Controlled Person”) shall be deemed Controlled by (a) any other Person (“10% Owner”) (i) owning
beneficially, as meant in Rule 13d-3 under the Exchange Act, securities entitling such Person to cast 10% or more of the votes
for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated or receive
10% or more of the profits, losses, or distributions of the Controlled Person; (b) an officer, director, general partner, partner
(other than a limited partner), manager, or member (other than a member having no management authority that is not a 10% Owner
) of the Controlled Person; or (c) a spouse, parent, lineal descendant, sibling, aunt, uncle, niece, nephew, mother-in-law, father-in-law,
sister-in-law, or brother-in-law of an Affiliate of the Controlled Person or a trust for the benefit of an Affiliate of the Controlled
Person or of which an Affiliate of the Controlled Person is a trustee.

 

1.21         
“Deed” means that certain notarized deed pursuant to which the Units are transferred (subject to the provisions
of the Pledge Agreement) from Sellers to Parent and LuxCo pursuant to Italian Laws.

 

1.22         
“Enterprise Value” means EUR 1.000.000,00.

 

1.23         
“Environmental Laws” is defined in Section 3.25 of Exhibit 3.

 

1.24         
“Escrow Agreement”, means that certain escrow agreement by and among Parent, Luxco, Sellers and Escrow Agent
(as defined therein).

 

1.25         
“Exchange Shares” is defined in Section 2.2.

 

1.26         
“Excluded Persons” is defined in Section 5.4.

 

1.27         
“Exchange Rate” means the average exchange rate at which Euros may be exchanged into US Dollars for the 20 days
preceding the third Business Day prior to the Closing Date, as set forth on the Reuters world currency webpage.

 

1.28         
“Fair Market Value” means, with respect to shares of Parent’s Common Stock:

 

(1) if Parent’s
Common Stock is traded on a national securities exchange, the Fair Market Value shall be deemed to be the closing price on the
trading day prior to any applicable date; or

 

(2) if Parent’s
Common Stock is traded over-the-counter, the Fair Market Value shall be deemed to be the last sales price on the trading day prior
to any applicable date; or

 

    	3

    	 

    

 

 

(3) if neither
(1) nor (2) is applicable, the Fair Market Value of Parent’s Common Stock shall be at the commercially reasonable price per
share which the Company could obtain from a willing third-party buyer for shares of Parent’s Common Stock sold by the Company,
from authorized but unissued shares, as determined in good faith by the Parent’s board of directors.

 

1.29         
“Financial Statements” is defined in Section 3.7(a) of Exhibit 3.

 

1.30         
“Guarantees” means the guarantees by Sellers or Sellers’s Affiliates securing repayment of the Company’s
Indebtedness, a list of which is set forth in Schedule 3.7.

 

1.31         
“Hazardous Material” means: (a) any material, substance, chemical, waste, product, derivative, compound, mixture,
solid, liquid, mineral or gas, in each case, whether naturally occurring or manmade, that is hazardous, acutely hazardous, toxic,
or words of similar import or regulatory effect under Environmental Laws; and (b) any petroleum or petroleum-derived products,
radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation,
and polychlorinated biphenyls.

 

1.32         
“IFRS” means the International Financial Reporting Standards.

 

1.33         
“Indebtedness” means with respect to any Person, (a) all obligations of such Person for borrowed money, or with
respect to deposits or advances of any kind (including amounts by reason of overdrafts and amounts owed by reason of letter of
credit reimbursement agreements) including with respect thereto, all interests, fees and costs, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other
title retention agreements relating to property purchased by such Person, (d) all obligations of such Person issued or assumed
as the deferred purchase price of property or services (other than accounts payable to creditors for goods and services incurred
in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any lien or security interest on property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed, (f) all obligations of such Person under leases required
to be accounted for as capital leases under IFRS, (g) all guarantees by such Person and (h) any agreement to incur any of the same.

 

1.34         
“Indemnifiable Loss Limit” is defined in Section 10.1.

 

1.35         
“Indemnification Notice” is defined in Section 10.3.

 

1.36         
“Indemnified Party” is defined in Section 10.3.

 

1.37         
“Indemnifying Parties” is defined in Section 10.3.

 

1.38         
“Law” means any domestic or foreign, Federal, state, municipality or local law, statute, ordinance, code, rule,
or regulation or common law.

 

    	4

    	 

    

 

 

1.39         
“Leases” means the leases with respect to the Real Property space leased by Company as set forth on Schedule
3.12 attached hereto, together with all fixtures and improvements erected on the premises leased thereby.

 

1.40         
“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset, and any conditional sale or voting agreement or proxy, including any agreement to give any
of the foregoing.

 

1.41         
“Liabilities” means any Company’s liabilities, obligations or commitments of any nature whatsoever, accrued
or unaccrued, matured or unmatured or otherwise, as they would be adequately reflected or reserved against in accordance with IFRS,
as of the date that is three Business Days prior to the Closing Date.

 

1.42         
“Loss(es)” is defined in Section 10.1.

 

1.43         
“LuxCo Indemnitees” is defined in Section 10.1.

 

1.44         
“LuxCo” is defined in the Preamble.

 

1.45         
“Material Adverse Change” and “Material Adverse Effect” mean, with respect to the parties hereto,
any change, event or effect that individually or when taken together with all other changes, events and effects (financial or otherwise)
that have occurred prior to the date of determination, is or is reasonably likely to be material and adverse to the operations,
assets, liabilities, business or financial condition of the parties hereto or the Company’s Property owned thereby; provided,
however, without prejudicing whether any other matter qualifies as a Material Adverse Change, any matter involving a loss or payment
in excess of $1,500,000 by the parties hereto shall constitute a Material Adverse Change with respect to the parties hereto, per
se.

 

1.46         
“Maximum Tender Condition” is defined in Section (a) of Exhibit 8.

 

1.47         
“Money Laundering Laws” is defined in Section 3.30 of Exhibit 3.

 

1.48         
“OFAC” is defined in Section 3.31 of Exhibit 3.

 

1.49         
“Offer to Purchase” is defined in Section (c) of Exhibit 8.

 

1.50         
“Order” means any decree, order, judgment, writ, award, injunction, rule or consent of or by an Authority.

 

1.51         
“Outside Closing Date” is defined in Section 12.1(a).

 

1.52         
“Parent Common Stock” means the common stock, $0.001 par value per share, of Parent.

 

1.53         
“Parent” is defined in the Recitals.

 

1.54         
“Permits” is defined in Section 3.14 of Exhibit 3.

 

    	5

    	 

    

 

 

1.55         
“Permitted Liens” means (i) all defects, exceptions, restrictions, easements, rights of way and encumbrances
disclosed in policies of title insurance which have been made available to LuxCo; (ii) mechanics’, carriers’, workers’,
repairers’ and similar Liens arising or incurred in the ordinary course of business that are not material to the Business
operations and financial condition of the Company so encumbered and that are not resulting from a breach, default or violation
by Sellers or the Company of any Contract or Law to the extent applicable to the relevant assets; (iii) zoning, entitlement and
other land use and environmental regulations by any Authority, provided that such regulations have not been violated, and (iv)
the mortgages, or comparable security interests over the Business’ real estate assets, pursuant to Italian laws, listed on
Schedule II.

 

1.56         
“Person” means an individual, corporation, partnership (including a general partnership, limited partnership
or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government,
domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.

 

1.57         
“Pledge Agreement” means that certain notarized agreement by and among Parent, LuxCo and Company pursuant to
which the Units are being pledged in favor of the Sellers in pursuance to Italian laws, in the form of Exhibit C hereto;

 

1.58         
“Pre-Closing Period” means any period that ends on or before the Closing Date, or with respect to a period that
includes but does not end on the Closing Date, the portion of such period through and including the day of the Closing.

 

1.59         
“Prospectus” is defined in Section 13.5.

 

1.60         
“Real Property Investigation Period” means the period ending on 9:00 a.m. Central European Time (CET) on July
23, 2013.

 

1.61         
“Real Property” means, collectively, all real properties and interests therein (including the right to use pursuant
to financial lease agreements), together with all buildings, fixtures, trade fixtures, plant and other improvements located thereon
or attached thereto; all rights arising out of use thereof (including air, water, oil and mineral rights); and all subleases, franchises,
licenses, permits, easements and rights-of-way which are appurtenant thereto.

 

1.62         
“Registration Rights Agreement” means the agreement in substantially the same form and substance as that certain
registration rights agreement entered into in connection with Parent’s initial public offering pursuant to its prospectus,
dated March 24, 2011, which was consummated on March 30, 2011, modified as necessary to provide for Sellers’ registration
rights as provided in this Agreement and the Transaction Value Agreement.

 

1.63         
“Restrictive Covenants” is defined in Section 6.2.

 

1.64         
“SEC” means the Securities and Exchange Commission.

 

1.65         
“Sellers Indemnitees” is defined in Section 10.2.

 

    	6

    	 

    

 

 

1.66         
“Sellers” is defined in the Recitals.

 

1.67         
“Stock Certificate” is defined in Section 2.2.

 

1.68         
“Stockholders Agreement” means that certain stockholders agreement by and among Parent, LuxCo and Sellers pursuant
to which the Company shall not take, without Sellers’ prior written consent, the actions listed in Exhibit F hereto.

 

1.69         
“Tangible Assets” means all tangible personal property and interests therein, including machinery, computers
and accessories, furniture, office equipment, communications equipment, vehicles, automobiles, trucks, forklifts and other vehicles
owned/leased by the Company as it relates to the Business and other tangible property other than the Real Property, including the
items listed on Schedule 3.15.

 

1.70         
“Tax Return” means any return, information return, declaration, claim for refund or credit, report or any similar
statement, and any amendment thereto, including any attached schedule and supporting information, whether on a separate, consolidated,
combined, unitary or other basis, that is filed or required to be filed with any Taxing Authority in connection with the determination,
assessment, collection or payment of a Tax or the administration of any Law relating to any Tax.

 

1.71         
“Tax(es)” means any tax and duty required by law to be paid and imposed by any national or local taxing authorities,
including income tax, property tax, capital gain tax, value added tax, stamp duty and registration and similar taxes and Taxes
shall be construed accordingly.

 

1.72         
“Taxing Authority” means any government, state, region or municipality or any governmental, state, social or
other fiscal, revenue, customs or excise authority, body or official or other authority competent to impose, assess or collect
any liability relating to Taxes.

 

1.73         
“Third-Party Claim” is defined in Section 10.3.

 

1.74         
“Transaction Value Agreement” means that certain transaction value agreement by and between Parent, LuxCo and
Sellers, in the form of Exhibit D hereto;

 

1.75         
“Trust Account” has the meaning provided in Section 13.14.

 

1.76         
“Units” means all of the outstanding units, or “quota”, of the Company.

 

1.77         
“Voting Agreement” is defined in Section 2.5.

 

ARTICLE
II

TERMS AND CONDITIONS OF THE PURCHASE AND SALE

 

2.1             
Exchange. Upon the terms and subject to the conditions of this Agreement, at the Closing, Parent shall acquire
from Sellers and Sellers shall convey, transfer, assign and deliver to Parent the Units, free and clear of all Liens. Immediately
subsequent to the Closing, Parent shall transfer the Units to LuxCo, in exchange for shares of LuxCo.

 

    	7

    	 

    

 

 

2.2             
Exchange Consideration.The consideration for the Units shall be represented by stock certificates (the “Stock
Certificates”) representing a number of shares of Parent’s Common Stock (the “Exchange Shares”) equal to:(a)
the Enterprise Value, plus the Change in Cash, minus Liabilities, multiplied by (b) the Exchange Rate, divided by (c) 10.

 

2.3             
Delivery of the Exchange Shares. The Stock Certificates representing the Exchange Shares shall be delivered
by Parent (which, at Parent’s convenience, may be delivered within 3 Business Days after the Closing Date) to the Sellers
at its address for notices in accordance with Section 13.1. The Stock Certificates shall bear the legend set forth on Schedule
2.3. No certificates or scrip representing fractional shares of the Exchange Shares will be issued, and such fractional share interests
will not entitle the owner thereof to vote or to any rights of a stockholder of Parent. Any fractional shares will be rounded to
the nearest whole share.

 

2.4             
Closing. Subject to the terms and conditions of this Agreement, the closing of the purchase and sale of the
Units (the “Closing”) shall take place no later than 2 Business Days after the last of the conditions to Closing set
forth in Article IX have been satisfied or waived (the date and time at which the Closing is actually held being the “Closing
Date”). At the Closing:

 

(a)               
Parent shall deliver an irrevocable instruction to its transfer agent relating to the issuance of the Exchange Shares in
accordance with Section 2.3.

 

(b)              
Sellers and Parent shall execute the Deed and the Pledge Agreement before an Italian Notary Public.

 

(c)               
Parent shall transfer the Units to LuxCo.

 

2.5             
Board of Directors. Immediately after the Closing, Parent’s board of directors will consist of seven
(7) directors. BHN shall designate six (6) persons to the Parent’s board of directors, of which three (3) designees shall
qualify as an independent director under the Exchange Act, and the rules of any applicable securities exchange, who are expected
to initially be (a) Martin Major, (b) Mark Horan, and (c) Marco De Franceschini. Parent shall designate one (1) person to the Parent’s
board of directors to serve for one (1) year from the Closing, who shall initially be William Yu. The parties to this Agreement
shall enter into a voting agreement in form and substance satisfactory to the parties thereof relating to nominations to the Parent’s
board of directors in accordance with this Section 2.5 (the “Voting Agreement”).

 

ARTICLE
III

REPRESENTATIONS AND WARRANTIES OF

THE COMPANY AND SELLERS

 

Except as set forth
in the corresponding section of the disclosure schedules referred to in Exhibit 3, each of Company and Sellers, jointly and severally,
hereby represents and warrants to Parent and LuxCo that each of the representations and warranties set forth in Exhibit 3, is true,
correct and complete as of the date of this Agreement and as of the Closing Date, provided that Sellers shall deliver to Parent
and LuxCo the Schedules referred to in Exhibit 3 as soon as they are available after the date hereof, subject to subsequent updates
and modifications, but in no event later than July 23, 2013.

 

    	8

    	 

    

 

 

ARTICLE
IV

REPRESENTATIONS AND WARRANTIES OF PARENT, LUXCO AND BHN

 

Except as set forth in
the corresponding section of the disclosure schedules delivered to Company and Sellers concurrently herewith, each of Parent, LuxCo
and BHN, jointly and severally, hereby represents and warrants to Company and Sellers that each of the representations and warranties
set forth in Exhibit 4 is true, correct and complete as of the date of this Agreement and as of the Closing Date.

 

ARTICLE
V

COVENANTS OF COMPANY AND SELLERS PENDING CLOSING

 

Company and Sellers covenant
and agree that:

 

5.1             
Conduct of the Business.

 

(a)               
From the date hereof through the Closing Date, Company shall conduct the Business only in the ordinary course, consistent
with past practices, and shall not enter into any material transactions without the prior written consent of LuxCo, and shall use
its best efforts to preserve intact the business relationships with employees, clients, suppliers, tenants, financing banks and
other third parties. Without limiting the generality of the foregoing, from the date hereof until and including the Closing Date,
without LuxCo’s prior written consent, with respect to the Business, Company shall not:

 

(i)                
amend, waive any provision of, terminate prior to its scheduled expiration date, or otherwise compromise in any way, any
Contract, or any other right or asset of Company;

 

(ii)              
modify, amend or enter into any contract, deed, agreement, lease, license or commitment, which (A) is with respect to Real
Property, (B) extends for a term of one year or more or (C) obligates the payment of more than $150,000 (individually or in the
aggregate);

 

(iii)            
make any capital expenditures in excess of $150,000 (individually or in the aggregate);

 

(iv)            
sell, lease, license or otherwise dispose of any of Company’s assets, including without limitation the Real Property,
or assets covered by any Contract except (i) pursuant to existing contracts or commitments disclosed herein and (ii) in the ordinary
course of business consistent with past practice;

 

    	9

    	 

    

 

 

(v)              
pay, declare or promise to pay any dividends or other distributions with respect to its capital stock, or pay, declare or
promise to pay any other payments to the Sellers or any Affiliate of Company;

 

(vi)            
authorize any salary increase of more than 10% for any employee making an annual salary of greater than $50,000 or in excess
of $80,000 in the aggregate on an annual basis or change the bonus or profit sharing policies of the Company.

 

(vii)          
obtain or incur any loan or other Indebtedness, including drawings under the Company’s existing lines of credit;

 

(viii)        
suffer or incur any Lien on any of the Company’s assets, including without limitation the Real Property, except for
Permitted Liens;

 

(ix)            
suffer any damage, destruction or loss of property related to any of Company’s assets, including without limitation
Real Property, whether or not covered by insurance;

 

(x)              
delay, accelerate or cancel any receivables or Indebtedness owed to Company;

 

(xi)            
allow Company to be acquired by any other Person;

 

(xii)          
suffer any insurance policy protecting any of the Company’s assets, including without limitation the Real Property,
to lapse; or

 

(xiii)        
make any change in its accounting principles or methods or write down the value of any Inventory or assets, including without
limitation the Real Property;

 

(xiv)        
extend any loans other than travel or other expense advances to employees in the ordinary course of business not to exceed
$8,000 individually or $50,000 in the aggregate;

 

(xv)          
effect or agree to any change in any practices or terms, including payment terms, with respect to customers, suppliers or
tenants;

 

(xvi)        
hire any employees, consultants or advisors;

 

(xvii)      
make or change any material Tax election or change any annual Tax accounting periods; or

 

(xviii)    
agree to do any of the foregoing.

 

(b)              
Sellers and Company shall not (i) take or agree to take any action that might make any representation or warranty of Company
hereunder inaccurate or misleading in any respect at, or as of any time prior to, the Closing Date or (ii) omit to take, or agree
to omit to take, any action necessary to prevent any such representation or warranty from being inaccurate or misleading in any
respect at any such time.

 

    	10

    	 

    

 

 

5.2             
Access to Information.

 

(a)               
From the date hereof until and including the Closing Date, Company shall (a) continue to give LuxCo and Parent and their
legal counsel and other representatives full access to the offices and properties of the Business, (b) furnish to LuxCo and Parent,
their legal counsel and other representatives such information relating to the Business as such Persons may request and (c) cause
the employees, legal counsel, accountants and representatives of Company to cooperate with LuxCo and Parent in their investigation
of the Business; provided that no investigation pursuant to this Section (or any investigation prior to the date hereof) shall
affect any representation or warranty given by Company; provided, that such access shall be in a manner that does not interfere
with the normal business operations of the Company.

 

(b)              
If requested by LuxCo or Parent, Company shall arrange for representatives of LuxCo or Parent to meet with or speak to the
representatives of the lessees of the Real Property.

 

(c)               
LuxCo or Parent may, promptly after it executes this Agreement and continuing through the Real Property Investigation Period,
at their discretion, order a title search (or comparable search) with the appropriate cadastral offices and land registries (or
comparable register offices), and conduct such investigations of the Real Property as LuxCo or Parent deem necessary to evaluate
the Real Property, including, without limitation, deeds, leases, contracts, engineering, licenses, permits, approvals, physical
inspections and all other reasonable information and matters which LuxCo or Parent deem advisable, provided, that such investigation
shall be conducted in a manner that does not interfere with the normal business operations of the Company or Company’s tenants.
LuxCo and Parent shall have the right to enter upon and pass through the Real Property during normal business hours to physically
inspect the same at such times and in such manners as reasonably requested by Parent or LuxCo. Company shall reasonably cooperate
with LuxCo and Parent in connection with LuxCo’s and Parent’s reviews and investigations of the Real Property, including
by giving LuxCo and Parent reasonable access to the Real Property and making available to LuxCo and Parent copies of all files,
documentation, plans, specifications, Records, Books, leases and other materials relating to the Real Property in the possession
or within the control of Company for the purpose of conducting such investigations.

 

5.3             
Notices of Certain Events. Company shall promptly notify LuxCo of:

 

(a)               
any notice or other communication from any Person alleging or raising the possibility that the consent of such Person is
or may be required in connection with the transactions contemplated by this Agreement or that the transactions contemplated by
this Agreement might give rise to any Action or other rights by or on behalf of such Person or result in the loss of any rights
or privileges of Company (or LuxCo or Parent, Post-Closing) to any such Person or create any Lien on any of the Business’
assets, including without limitation the Real Property;

 

    	11

    	 

    

 

 

(b)              
any notice or other communication from any Authority in connection with the transactions contemplated by this Agreement
or the Additional Agreements;

 

(c)               
any Actions commenced or threatened against, relating to or involving or otherwise affecting Company or any of the Business’
assets, including without limitation the Real Property, or that relate to the consummation of the transactions contemplated by
this Agreement or the Additional Agreements;

 

(d)              
the occurrence of any fact or circumstance which constitutes or results, or could be expected to constitute or result in
a Material Adverse Change; and

 

(e)               
the occurrence of any fact or circumstance which constitutes or results, or could be expected to constitute or result in
any representation made hereunder by Company to be false or misleading in any respect or to omit or fail to state a material fact.

 

5.4             
Exclusivity. Neither Company nor anyone acting on its behalf is currently involved, directly or indirectly,
in any activity which is intended to, nor for so long as this Agreement is in effect, shall Company or anyone acting on its behalf
directly or indirectly, (a) encourage, solicit, initiate or participate in discussions or negotiations with, or provide any information
to or cooperate in any manner with any Person, other than Parent, LuxCo, BHN or their Affiliates (collectively “Excluded
Persons”), or an officer, partner, employee or other representative of an Excluded Person, concerning the sale of all or
any part of the Business (other than in the ordinary course of business), whether such transaction takes the form of a sale of
stock, assets, merger, consolidation, or issuance of debt securities or making of a loan or otherwise or any joint venture or partnership
or (b) otherwise solicit, initiate or encourage the submission (or attempt to submit) of any inquiry or proposal contemplating
the sale of all or any part of the Business, or (c) consummate any such transaction or accept any offer or agree to engage in any
such transaction. Company shall promptly (within 24 hours) communicate to LuxCo or Parent the terms of any proposal, contract or
sale which it may receive in respect of any of the foregoing and respond to any such communication in a manner reasonably acceptable
to LuxCo or Parent. The notice of Company under this Section 5.4 shall include the identity of the person making such proposal
or offer, copies (if written) or a written description of the terms (if oral) thereof and any other such information with respect
thereto as LuxCo or Parent may reasonably request.

 

5.5             
Annual Financial Statements. From the date hereof through the Closing Date, within thirty (30) calendar days
following the end of each calendar month, Company shall deliver to Parent or LuxCo an unaudited summary of its earnings and an
unaudited balance sheet for the period from December 31, 2012 through the end of such calendar month and the applicable comparative
period in the preceding fiscal year, in each case accompanied by a certificate of the Chief Financial Officer, or comparable authorized
officer of Company, to the effect that all such financial statements fairly present the financial position and results of operations
of the Company as of the date or for the periods indicated, in accordance with IFRS, except as otherwise indicated in such statements
and subject to year-end audit adjustments. Such certificate shall also state that except as noted, from the December 31, 2012 through
the end of the previous month there has been no Material Adverse Effect. Company shall also promptly deliver to Parent or LuxCo
copies of any audited financial statements of Company that Company’s certified public accountants may issue.

 

    	12

    	 

    

 

 

5.6             
SEC Filings.

 

(a)               
Company acknowledges that:

 

(i)                
Parent will be required to file Annual Reports on Form 20-F that may be required to contain information about the transactions
contemplated by this Agreement; and

 

(ii)              
Parent will be required to file Reports of Foreign Private Issuer on Form 6-K to announce the transactions contemplated
hereby and other significant events that may occur in connection with such transactions.

 

(b)              
In connection with any filing Parent makes with the SEC that requires information about the transactions contemplated by
this Agreement to be included, Company and Sellers shall, in connection with the disclosure included in any such filing or the
responses provided to the SEC in connection with the SEC’s comments to a filing (i) cooperate with LuxCo and Parent, (ii)
respond to questions about Company or Sellers required in any filing or requested by the SEC, and (iii) provide any information
requested by Parent or Parent’s representatives in connection with any filing with the SEC.

 

5.7             
Financial Information. Company shall provide additional financial information requested by the Parent for
inclusion in any filings to be made by Parent with the SEC. If requested by LuxCo, such information must be reviewed or audited
by the auditors of Company.

 

ARTICLE
VI

COVENANTS OF Company and SELLERS

 

Company and Sellers covenant
and agree that:

 

6.1             
Confidentiality. Except as otherwise required by law, prior to and after the Closing, Company shall not, without
the prior written consent of LuxCo, or a person authorized thereby, disclose to any other Person or use (whether for the account
of Company or any other party) any confidential information or proprietary work product of LuxCo or Parent. In the event Company
or Sellers believes that it is required to disclose any such confidential information pursuant to applicable Laws, Company or Sellers
shall give timely written notice to LuxCo or Parent so that LuxCo or Parent may have an opportunity to obtain a protective order
or other appropriate relief. Company and Sellers shall cooperate fully in any such action by LuxCo or Parent.

 

6.2             
Injunctive Relief. If Company or Sellers breaches, or threatens to commit a breach of, any of the covenants
set forth in Sections 5.2, 5.5, 6.1, 8.2 or 13.4 (the “Restrictive Covenants”), LuxCo shall have the following rights
and remedies, which shall be in addition to, and not in lieu of, any other rights and remedies available to LuxCo by agreement
(including those set forth in Section 11.1 hereof), under law or in equity:

 

    	13

    	 

    

 

 

(a)               
The right and remedy to have the Restrictive Covenants specifically enforced by any court having equity jurisdiction, all
without the need to post a bond or any other security or to prove any amount of actual damage or that money damages would not provide
an adequate remedy, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to
LuxCo and that monetary damages will not provide adequate remedy to LuxCo; and

 

(b)              
The right and remedy to require Company and Sellers, (i) to account for and pay over to LuxCo all compensation, profits,
monies, accruals, increments or other benefits derived or received by Sellers or Company or any associated party as the result
of any such breach; and (ii) to indemnify LuxCo against any other losses, damages (including special and consequential damages),
costs and expenses, including actual attorneys’ fees and court costs, which may be incurred by it and which result from or
arise out of any such breach or threatened breach.

 

6.3             
Best Efforts to Obtain Consents. Sellers and Company shall use their best efforts to obtain the consents of
each counterparty under the Contracts Subject to Consent as promptly as practicable hereafter.

 

6.4             
Financial Reporting. As soon as available, but in any event no later than July 23, 2013, the Sellers and the
Company shall deliver to Parent or LuxCo a copy of the annual audit report for the Financial Statements including a copy of the
audited consolidated balance sheet of Company as at the end of such years, and the related audited consolidated statements of income
and of cash flows for such years, setting forth in each case in comparative form the figures for the previous years. The opinion
as to such audit report of BDO S.p.A., or other independent certified public accountants registered with the Public Company Accounting
Oversight Board, shall not contain a “going concern” or similar qualification or exception, or qualification arising
out of the scope of the audit.

 

  

ARTICLE
VII

COVENANTS OF PARENT, LUXCO and BHN

 

7.1             
Registration Statement. Parent, LuxCo and BHN jointly and severally covenant and agree that from and after
the Closing, Parent shall effect the registration of the Exchange Shares in accordance with the provisions of and its obligations
under the Registration Rights Agreement. The registration statement to be filed by Parent pursuant to the Registration Rights Agreement
will be prepared by Loeb & Loeb LLP.

 

7.2             
Dividend. Parent and BHN covenant and agree that as soon as practicable after the Closing, Parent shall pay
an annualized dividend of $0.50 per share of Parent Common Stock, the payment date of which will be announced and approved by the
then Parent’s board of directors, provided funds are legally available therefor.

 

    	14

    	 

    

 

 

7.3             
Listing on NASDAQ. Parent covenants and agrees that it shall use its reasonable best efforts to ensure that
Parent’s shares shall continue to be listed on NASDAQ.

 

7.4             
Guaranty. Within 24 from the Closing Date, Parent shall provide Sellers with a guaranty in substantially the
same form of those certain guarantees Sellers has executed in favor of the lenders with respect to the Real Property assets identified
in Exhibits A and B.

 

  

ARTICLE
VIII

COVENANTS OF ALL PARTIES HERETO

 

The parties hereto covenant
and agree that:

 

8.1             
Best Efforts; Further Assurances. Subject to the terms and conditions of this Agreement, each party shall
use its best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable
under applicable Laws, and, in the case of Company and Sellers, as reasonably requested by LuxCo or Parent, to consummate and implement
expeditiously each of the transactions contemplated by this Agreement. The parties hereto shall execute and deliver such other
documents, certificates, agreements and other writings and take such other actions as may be necessary or desirable in order to
consummate or implement expeditiously each of the transactions contemplated by this Agreement in order to transfer all of the Units
to LuxCo and to vest in LuxCo good, valid and marketable title to the Business, free and clear of all Liens.

 

8.2             
Confidentiality of Transaction. Any information (except publicly available or freely usable material obtained
from another source) respecting any party or its Affiliates will be kept in strict confidence by all other parties to this Agreement
and their agents. Except as required by Law, neither the Company, Sellers, nor any of their Affiliates, directors, officers, employees
or agents will disclose the terms of the transactions contemplated hereunder or by any Additional Agreement at any time, currently,
or on or after the Closing, regardless of whether the Closing takes place, except as required by Law or as necessary to their attorneys,
accountants and professional advisors, in which instance such Persons shall be advised of the confidential nature of the terms
of the transaction and shall themselves be required to keep such information confidential. Except as required by Law, each party
shall retain all information obtained from the other and their legal counsel on a confidential basis except as necessary to their
attorneys, accountants and professional advisors, in which instance such persons and any employees or agents of such party shall
be advised of the confidential nature of the terms of the transaction and shall themselves be required by such party to keep such
information confidential.

 

8.3             
Business Combination Tender Offer.

 

The parties hereto
covenant and agree to comply with the business combination tender offer covenants set forth in Exhibit 8.

 

    	15

    	 

    

  

ARTICLE
IX

CONDITIONS TO CLOSING

 

9.1             
Condition to the Obligations of the Parties. The obligations of all of the parties to consummate the Closing
are subject to the satisfaction of all the following conditions: (a) no provision of any applicable Law, and no Order shall prohibit
or impose any condition on the consummation of the Closing, (b) there shall not be pending any Action brought by a third-party
non-Affiliate to enjoin or otherwise restrict the consummation of the Closing, and (c) the Business Combination Tender Offer
shall have been completed and Parent shall have accepted the shares of Parent Common Stock validly tendered and not validly withdrawn
pursuant to the Tender Offer and no more than a number of shares of the Parent Common Stock equal to eighty-three percent (83%)
of the IPO Shares as defined in the Parent’s Amended and Restated Memorandum and Article of Association shall have been validly
tendered and not validly withdrawn prior to the expiration of the Business Combination Tender Offer.

 

9.2             
Conditions to Obligations of Parent, LuxCo and BHN. The obligation of Parent LuxCo, and BHN to consummate
the Closing is subject to the satisfaction, or the waiver at Parent, LuxCo and BHN’s sole and absolute discretion, of all
the following further conditions:

 

(a)               
Company and Sellers shall have performed in all material respects all of their obligations hereunder required to be performed
by them at or prior to the Closing Date.

 

(b)              
All of the representations and warranties of Company and Sellers contained in this Agreement, the Additional Agreements
and in any certificate or other writing delivered by Company and Sellers pursuant hereto, disregarding all qualifications and exceptions
contained therein relating to materiality or Material Adverse Effect, regardless of whether it involved a known risk, shall: (i)
be true, correct and complete at and as of the date of this Agreement, or, (ii) if otherwise specified, when made or when deemed
to have been made, and (iii) shall be true, correct and complete as of the Closing Date, in the case as (i) and (ii) with only
such exceptions as could not in the aggregate reasonably be expected to have a Material Adverse Effect.

 

(c)               
There shall have been no event, change or occurrence which individually or together with any other event, change or occurrence,
could reasonably be expected to have a Material Adverse Change or a Material Adverse Effect, regardless of whether it involved
a known risk.

 

(d)              
Parent or LuxCo shall have received a certificate signed by the Chief Executive Officer and Chief Financial Officer or comparable
title of Company to the effect set forth in clauses (a) through (c) of this Section 9.2.

 

(e)               
Parent or LuxCo shall have received letters of resignation of the directors and auditors of the Company, confirming that
such persons have no claims against the Company.

 

(f)               
Parent or LuxCo shall have received audited consolidated financial statements of Company.

 

    	16

    	 

    

 

 

(g)              
No court, arbitrator or other Authority shall have issued any judgment, injunction, decree or order, or have pending before
it a proceeding for the issuance of any thereof, and there shall not be any provision of any applicable Law restraining or prohibiting
the consummation of the Closing, the ownership by LuxCo of Company or the effective operation of the Business by LuxCo after the
Closing Date.

 

(h)              
Parent and LuxCo shall have received all documents they may request relating to the existence of Company and the authority
of Company and Sellers to enter into and perform under this Agreement, all in form and substance reasonably satisfactory to Parent
and LuxCo and their legal counsel, including (i) a copy of the certificate of incorporation or comparable document of formation
of Company, (ii) copies of resolutions duly adopted by the board of directors of Company authorizing this Agreement, the Additional
Agreements and the transaction contemplated hereby and thereby, (iv) a recent good standing certificate regarding Company from
the office of any appropriate Authority of each other jurisdiction in which Company is qualified to do business.

 

(i)                
Parent and LuxCo shall be fully satisfied, in their sole discretion which shall be exercised in good faith, with the results
of their and their representatives’ review of the Company, the (including any review of the capitalization, Real Property,
assets, processes, systems, financial condition, and prospects of the Business), provided that no such review shall affect any
representation or warranty of Company given hereunder or in any instrument related to the transactions contemplated hereby; and
provided, further, that LuxCo and Parent shall notify Sellers and the Company by 9:00 a.m. CET, on July 23, 2013, time being of
the essence, if they are not satisfied with the results of their review, in the absence of which notice this condition to Closing
shall cease to apply and shall be deemed waived by the Parent and LuxCo.

 

(j)                
LuxCo shall have received copies of the consents of all the counterparties to the Contracts Subject to Consent, in form
and substance reasonably satisfactory to LuxCo, and no such consent shall have been revoked.

 

(k)              
Company shall have delivered to LuxCo documents satisfactory to LuxCo to evidence the release of all Liens on any portion
of Company’s assets, including Real Property, and the filing of appropriate lien termination statements or comparable termination
documents, if applicable, other than the Permitted Liens.

 

(l)                
Company and Sellers shall have entered into and delivered a counterpart signature page of each Additional Agreement to which
it is a party.

 

(m)            
All the expenses borne in connection with the transactions contemplated by this Agreement, other than the expenses of each
of Sellers and Company, shall be paid at Closing.

 

(n)              
The counsel to Company shall have delivered an opinion substantially in the form of Exhibit E hereto.

 

    	17

    	 

    

 

 

(o)              
Company shall have delivered to LuxCo’s satisfaction updated Schedules and all such updated schedules shall be true,
correct and complete as of the date with respect thereto set forth in the respective representation and warranty.

 

(p)              
Company and Sellers acknowledge that Parent and LuxCo have entered into agreements to purchase two other companies (the
“Other Companies”) on terms and conditions substantially similar to this Agreement. Parent and LuxCo must concurrently
close on transactions (consisting of the transactions contemplated by this Agreement and the transactions for the Other Companies)
with assets having an aggregate value of no less than $150,000,000.00.

 

(q)              
The parties hereto shall have purchased a directors and officers liability insurance policy for a minimum coverage amount
of $10,000,000 for Parent’s pre-transaction directors and officers, which will cover the directors and officers for a period
of at least three (3) years after the Closing. The policy will be paid for with funds made available in connection with the Closing.

 

9.3             
Conditions to Obligations of Sellers and Company. The obligations of Sellers and Company to consummate the
Closing is subject to the satisfaction, or the waiver at the Sellers’ discretion, of the following further conditions:

 

(a)               
Parent, LuxCo and BHN shall have performed in all material respects all of its obligations hereunder required to be performed
by it at or prior to the Closing Date.

 

(b)              
All of the representations and warranties of Parent, LuxCo and BHN contained in this Agreement, the Additional Agreements,
and in any certificate or other writing delivered by Parent, LuxCo or BHN pursuant hereto, disregarding all qualifications and
expectations contained therein relating to materiality or Material Adverse Effect, regardless of whether it involved a known risk,
shall be true and correct in all material respects at and as of the Closing Date, as if made at and as of such date.

 

(c)               
Company shall have received certificates signed by an authorized officer of each of Parent, LuxCo and BHN to the foregoing
effect.

 

(d)              
There shall have been no event, change, or occurrence with respect to Parent which individually or together with any other
event, change or occurrence, could reasonably be expected to have a Material Adverse Change.

 

(e)               
No court, arbitrator or other Authority shall have issued any judgment, injunction, decree or order, or have pending before
it a proceeding for the issuance of any thereof, and there shall not be any provision of any applicable Law restraining or prohibiting
the consummation of the Closing, or the public trading of Parent’s shares after the Closing Date.

 

(f)               
Each of Parent, LuxCo and BHN shall have entered into and delivered a counterpart signature page of each Additional Agreement
to which it is a party.

 

    	18

    	 

    

  

ARTICLE
X

INDEMNIFICATION

 

10.1         
Indemnification of Parent, LuxCo and BHN. Company and Sellers hereby agree to indemnify and hold harmless
Parent, LuxCo and BHN, each of their respective Affiliates (including without limitation Parent) and each of its and their respective
members, managers, partners, directors, officers, employees, stockholders, attorneys and agents and permitted assignees (the “LuxCo
Indemnitees”), against and in respect of any and all out-of-pocket loss, cost, payments, demand, penalty, forfeiture, expense,
liability, judgment, deficiency or damage, and diminution in value or claim (including actual costs of investigation and attorneys’
fees and other costs and expenses) (all of the foregoing collectively, “Losses”) incurred or sustained by any LuxCo
Indemnitee as a result of or in connection with (a) any breach, inaccuracy or nonfulfillment or the alleged breach, inaccuracy
or nonfulfillment of any of the representations, warranties and covenants of Company and Sellers contained herein or in any of
the Additional Agreements or any certificate or other writing delivered pursuant hereto, (b) any Actions by any third parties with
respect to the Business (including breach of contract claims, violations of warranties, trademark infringement, privacy violations,
torts or consumer complaints) for any period on or prior to the Closing Date (c) the violation of any Laws in connection with or
with respect to the operation of the Business on prior to the Closing Date, (d) any claims by any employee of Company, with respect
to any period or event occurring on or prior to the Closing Date, or relating to the termination of employee’s employment
status in connection with the transactions contemplated by this Agreement, or the termination, amendment or curtailment of any
employee benefit plans, (e) the failure of Company to pay any Taxes to any Taxing Authority or to file any Tax Return with any
Taxing Authority with respect to any period ending on or prior to the Closing Date, or (f) any sales, use, transfer or similar
Tax imposed on LuxCo or its Affiliates as a result of any transaction contemplated by this Agreement. The total payments made by
Company or Sellers to LuxCo Indemnitees with respect to Losses shall not exceed an amount equal to ten percent (10%) of the total
amount received by Sellers from the sale of the Exchange Shares and the Make-Whole Shares, as defined in the Transaction Value
Agreement (the “Indemnifiable Loss Limit”), except that the Indemnifiable Loss Limit shall not apply with respect to
any Losses relating to or arising under or in connection with breaches of Sections 3.10 of Exhibit 3 (Properties; Title to the
Company’ Assets), Section 3.19 of Exhibit 3 (Employees), Section 3.20 of Exhibit 3 (Employee Benefits and Compensation),
Section 3.21 of Exhibit 3 (Real Property) or any of clauses (b) through (f) of this Section 10.1; provided, however, LuxCo Indemnitees
shall not be entitled to indemnification pursuant to this Section 10.1. unless and until the aggregate amount of Losses to all
LuxCo Indemnitees equals at least $200,000.00 (the “Basket”), at which time, subject to the Indemnifiable Loss Limit,
LuxCo Indemnitees shall be entitled to indemnification for the total amount of such Losses. Any breach of Section 3.1 of Exhibit
3 (Corporate Existence and Power), Section 3.3 of Exhibit 3 (Authorization), Section 3.4 of Exhibit 3 (Governmental Authorization),
Section 3.10 of Exhibit 3 (Properties; Title to the Company’ Assets), Section 3.19 of Exhibit 3 (Employees), Section 3.20
of Exhibit 3 (Employee Benefits and Compensation), Section 3.21 of Exhibit 3 (Real Property) or Section 3.22 of Exhibit 3 (Tax
Matters) shall not be subject to the Basket. Notwithstanding anything set forth in this Section 10.1, (i) any amounts recovered
under Section 6.2(b), and (ii) any Losses incurred by any LuxCo Indemnitee arising out of the failure of Company and Sellers to
perform any covenant or obligation to be performed by it at or after the Closing Date, shall not, in any such case, be subject
to or applied against the Indemnifiable Loss Limit or the Basket, respectively. For the avoidance of doubt, any indemnification
payment under this Agreement shall be limited to the Exchange Shares and Make-Whole Shares, or the proceeds of the sale of such
Exchange Shares and Make-Whole Shares.

 

    	19

    	 

    

 

 

10.2         
Indemnification of Sellers . Parent, LuxCo and BHN, jointly and severally hereby agree to indemnify and hold
harmless Sellers, each of its Affiliates, and each of its members, managers, partners, directors, officers, employees, attorneys
and agents and permitted assignees (the “Sellers Indemnitees”) against and in respect of any Losses incurred or sustained
by any Sellers Indemnitee as a result of any breach, inaccuracy or nonfulfillment or the alleged breach, of any of the representations,
warranties and covenants of LuxCo contained herein. The total payments made by Parent, LuxCo or BHN to Sellers Indemnitees with
respect to Losses shall not exceed the Indemnifiable Loss Limit; provided, however, Sellers Indemnitees shall not be entitled to
indemnification pursuant to this Section 10.2 unless and until the aggregate amount of Losses to Sellers Indemnitees equals at
least the Basket, at which time, subject to the Indemnifiable Loss Limit, the Sellers Indemnitees shall be entitled to indemnification
for the total amount of such Losses. Notwithstanding anything set forth in this Section 10.2, any Losses incurred by any Sellers
Indemnitee arising out of the failure of Parent, LuxCo or BHN to perform any covenant or obligation to be performed by it at or
after the Closing Date including payment of the Purchase Price, shall not be subject to or applied against the Indemnifiable Loss
Limit or the Basket, respectively.

 

10.3         
Procedure. The following shall apply with respect to all claims by either a LuxCo Indemnitee or a Sellers
Indemnitee (together, “Indemnified Party”) for indemnification:

 

(a)               
An Indemnified Party shall give the Sellers or Parent, LuxCo and BHN, as applicable, prompt notice (an “Indemnification
Notice”) of any third-party Action with respect to which such Indemnified Party seeks indemnification pursuant to Section 10.1
or 10.2 (a “Third-Party Claim”), which shall describe in reasonable detail the Loss that has been or may be
suffered by the Indemnified Party. The failure to give the Indemnification Notice shall not impair any of the rights or benefits
of such Indemnified Party under Section 10.1 or 10.2, except to the extent such failure materially and adversely affects the ability
of Sellers or Parent, LuxCo and BHN, as applicable (any of such parties, “Indemnifying Parties”) to defend such claim
or increases the amount of such liability.

 

(b)              
In the case of any Third-Party Claims as to which indemnification is sought by any Indemnified Party, such Indemnified Party
shall be entitled, at the sole expense and liability of the Indemnifying Parties, to exercise full control of the defense, compromise
or settlement of any Third-Party Claim unless the Indemnifying Parties, within a reasonable time after the giving of an Indemnification
Notice by the Indemnified Party (but in any event within ten (10) days thereafter), shall (i) deliver a written confirmation to
such Indemnified Party that the indemnification provisions of Section 10.1 or 10.2 are applicable to such Action and the Indemnifying
Parties will indemnify such Indemnified Party in respect of such Action pursuant to the terms of Section 10.1 or 10.2 and, notwithstanding
anything to the contrary, shall do so without asserting any challenge, defense, limitation on the Indemnifying Parties liability
for Losses, counterclaim or offset, (ii) notify such Indemnified Party in writing of the intention of the Indemnifying Parties
to assume the defense thereof, and (iii) retain legal counsel reasonably satisfactory to such Indemnified Party to conduct the
defense of such Third-Party Claim.

 

    	20

    	 

    

 

 

(c)               
If the Indemnifying Parties assume the defense of any such Third-Party Claim pursuant to Section 10.3(b), then the Indemnified
Party shall cooperate with the Indemnifying Parties in any manner reasonably requested in connection with the defense, and the
Indemnified Party shall have the right to be kept fully informed by the Indemnifying Parties and their legal counsel with respect
to the status of any legal proceedings, to the extent not inconsistent with the preservation of attorney-client or work product
privilege. If the Indemnifying Parties so assume the defense of any such Third-Party Claim the Indemnified Party shall have the
right to employ separate counsel and to participate in (but not control) the defense, compromise, or settlement thereof, but the
fees and expenses of such counsel employed by the Indemnified Party shall be at the expense of such Indemnified Party unless (i)
the Indemnifying Parties have agreed to pay such fees and expenses, or (ii) the named parties to any such Third-Party Claim (including
any impleaded parties) include an Indemnified Party and an Indemnifying Party and such Indemnified Party shall have been advised
by its counsel that there may be a conflict of interest between such Indemnified Party and the Indemnifying Parties in the conduct
of the defense thereof, and in any such case the reasonable fees and expenses of such separate counsel shall be borne by the Indemnifying
Parties.

 

(d)              
If the Indemnifying Parties elect to assume the defense of any Third-Party Claim pursuant to Section 10.3(b), the Indemnified
Party shall not pay, or permit to be paid, any part of any claim or demand arising from such asserted liability unless the Indemnifying
Parties withdraw from or fail to vigorously prosecute the defense of such asserted liability, or unless a judgment is entered against
the Indemnified Party for such liability. If the Indemnifying Parties do not elect to defend, or if, after commencing or undertaking
any such defense, the Indemnifying Parties fail to adequately prosecute or withdraw such defense, the Indemnified Party shall have
the right to undertake the defense or settlement thereof, at the Indemnifying Parties’ expense. Notwithstanding anything
to the contrary, the Indemnifying Parties shall not be entitled to control, but may participate in, and the Indemnified Party (at
the expense of the Indemnifying Parties) shall be entitled to have sole control over, the defense or settlement of (x) that part
of any Third Party Claim (i) that seeks a temporary restraining order, a preliminary or permanent injunction or specific performance
against the Indemnified Party, or (ii) to the extent such Third Party Claim involves criminal allegations against the Indemnified
Party or (y) the entire Third Party Claim if such Third Party Claim would impose liability on the part of the Indemnified Party
in an amount which is greater than the amount as to which the Indemnified Party is entitled to indemnification under this Agreement.
In the event the Indemnified Party retains control of the Third Party Claim, the Indemnified Party will not settle the subject
claim without the prior written consent of the Indemnifying Party, which consent will not be unreasonably withheld or delayed.

 

(e)               
If the Indemnified Party undertakes the defense of any such Third-Party Claim pursuant to Section 10.1 or 10.2 and proposes
to settle the same prior to a final judgment thereon or to forgo appeal with respect thereto, then the Indemnified Party shall
give the Indemnifying Parties prompt written notice thereof and the Indemnifying Parties shall have the right to participate in
the settlement, assume or reassume the defense thereof or prosecute such appeal, in each case at the Indemnifying Parties’
expense. The Indemnifying Parties shall not, without the prior written consent of such Indemnified Party settle or compromise or
consent to entry of any judgment with respect to any such Third-Party Claim (i) in which any relief other than the payment of money
damages is or may be sought against such Indemnified Party, (ii) in which such Third Party Claim could be reasonably expected to
impose or create a monetary liability on the part of the Indemnified Party (such as an increase in the Indemnified Party’s
income Tax) other than the monetary claim of the third party in such Third-Party Claim being paid pursuant to such settlement or
judgment, or (iii) which does not include as an unconditional term thereof the giving by the claimant, person conducting such investigation
or initiating such hearing, plaintiff or petitioner to such Indemnified Party of a release from all liability with respect to such
Third-Party Claim and all other Actions (known or unknown) arising or which might arise out of the same facts.

 

    	21

    	 

    

 

 

10.4         
Periodic Payments. Any indemnification required by Section 10.1 or 10.2 for costs, disbursements or expenses
of any Indemnified Party in connection with investigating, preparing to defend or defending any Action shall be made by periodic
payments by the Indemnifying Parties to each Indemnified Party during the course of the investigation or defense, as and when bills
are received or costs, disbursements or expenses are incurred.

 

10.5         
Right of Set Off. In the event that Parent, LuxCo or BHN is entitled to any indemnification pursuant to this
Article X, Parent, BHN or LuxCo shall be entitled to set off any amounts owed to Sellers pursuant to Section 10.2 and/or against
the amount of such indemnification. Any such set-off will be treated as an adjustment to the Purchase Price.

 

10.6         
Payment of Indemnification. In the event that Parent, LuxCo or BHN are entitled to any indemnification pursuant
to this Article, and Parent, LuxCo or BHN are unable to set off such indemnification pursuant to Section 10.5, Sellers may pay
the amount of the indemnification (subject to the limitation set forth in Section 10.1) in shares of Parent Common Stock at Fair
Market Value. Any payments by Sellers to a LuxCo Indemnitee will be treated as an adjustment to the Purchase Price.

 

10.7         
Insurance. Any indemnification payments hereunder shall take into account any insurance proceeds or other
third party reimbursement actually received.

 

10.8         
Survival of Indemnification Rights. Except for the representations and warranties in Section 3.1 of Exhibit
3 (Corporate Existence and Power), Section 3.3 of Exhibit 3 (Authorization), Section 3.4 of Exhibit 3 (Governmental Authorization),
Section 3.10 of Exhibit 3 (Properties; Title to Company’s Assets), Section 3.15 of Exhibit 3 (Compliance with Laws), 3.19
of Exhibit 3 (Employees) Section 3.20 of Exhibit 3 (Employee Benefits and Compensation), Section 3.21 of Exhibit 3 (Real Property),
Section 3.22 of Exhibit 3 (Tax Matters), Section 3.23 of Exhibit 3 (Environmental Laws), Section 3.24 of Exhibit 3 (Finder’s
Fees), Section 4.1 of Exhibit 4 (Corporate Existence and Power), Section 4.2 of Exhibit 4 (Corporate Authorization), and Section
4. 6 of Exhibit 4 (Finders’ Fees) which shall survive until ninety (90) days after the expiration of the statute of limitations
with respect thereto (including any extensions and waivers thereof), the representations and warranties of Sellers, Company, Parent,
LuxCo and BHN shall survive until the twenty-four (24) months following the Closing. The indemnification to which any Indemnified
Party is entitled from the Indemnifying Parties pursuant to Section 10.1 or 10.2 for Losses shall be effective so long as it is
asserted prior to: (x) ninety (90) days after the expiration of the applicable statute of limitations (including all extensions
and waivers thereof), in the case of the representations and warranties referred to in the first sentence of Section 10.8 and the
breach or the alleged breach of any covenant or agreement of any Indemnifying Party; and (y) the twenty-four (24) months following
the Closing, in the case of all other representations and warranties of Sellers and Parent, LuxCo and BHN hereunder.

 

    	22

    	 

    

 

 

ARTICLE
XI

DISPUTE RESOLUTION

 

11.1         
Arbitration.

 

(a)               
The parties shall promptly submit any dispute, claim, or controversy arising out of or relating to this Agreement, or any
Additional Agreement (including with respect to the meaning, effect, validity, termination, interpretation, performance, or enforcement
of this Agreement or any Additional Agreement) or any alleged breach thereof (including any action in tort, contract, equity, or
otherwise), to binding arbitration before one arbitrator (“Arbitrator”), shall be binding, final and non-appealable
and not subject to this Section 11.1. The parties agree that binding arbitration shall be the sole means of resolving any dispute,
claim, or controversy arising out of or relating to this Agreement or any Additional Agreement (including with respect to the meaning,
effect, validity, termination, interpretation, performance or enforcement of this Agreement or any Additional Agreement) or any
alleged breach thereof (including any claim in tort, contract, equity, or otherwise).

 

(b)              
If the parties cannot agree upon the Arbitrator, the Arbitrator shall be selected by the New York, New York chapter head
of the American Arbitration Association upon the written request of either side. The Arbitrator shall be selected within thirty
(30) days of such written request.

 

(c)               
The laws of the State of New York shall apply to any arbitration hereunder. In any arbitration hereunder, this Agreement
and any agreement contemplated hereby shall be governed by the laws of the State of New York applicable to a contract negotiated,
signed, and wholly to be performed in the State of New York, which laws the Arbitrator shall apply in rendering his decision. The
Arbitrator shall issue a written decision, setting forth findings of fact and conclusions of law, within sixty (60) days after
he shall have been selected. The Arbitrator shall have no authority to award punitive or other exemplary damages.

 

(d)              
The arbitration shall be held in New York, New York in accordance with and under the then current provisions of the rules
of the American Arbitration Association, except as otherwise provided herein.

 

(e)               
On application to the Arbitrator, any party shall have rights to discovery to the same extent as would be provided under
the Federal Rules of Civil Procedure, and the Federal Rules of Evidence shall apply to any arbitration under this Agreement; provided,
however, that the Arbitrator shall limit any discovery or evidence such that his decision shall be rendered within the period referred
to in Section 11.1(c).

 

    	23

    	 

    

 

 

(f)               
The Arbitrator may, at his discretion and at the expense of the parties who will bear the cost of the arbitration, employ
experts to assist him in his determinations.

 

(g)              
The costs of the arbitration proceeding and any proceeding in court to confirm any arbitration award or to obtain relief
as provided in Section 6.2, as applicable (including actual attorneys’ fees and costs), shall be borne by the unsuccessful
party and shall be awarded as part of the Arbitrator’s decision, unless the Arbitrator shall otherwise allocate such costs
in such decision. The determination of the Arbitrator shall be final and binding upon the parties and not subject to appeal.

 

(h)              
Any judgment upon any award rendered by the Arbitrator may be entered in and enforced by any court of competent jurisdiction.
The parties expressly consent to the exclusive jurisdiction of the courts (Federal and state) in New York, New York to enforce
any award of the Arbitrator or to render any provisional, temporary, or injunctive relief in connection with or in aid of the Arbitration.
The parties expressly consent to the personal and subject matter jurisdiction of the Arbitrator to arbitrate any and all matters
to be submitted to arbitration hereunder. None of the parties hereto shall challenge any arbitration hereunder on the grounds that
any party necessary to such arbitration (including the parties hereto) shall have been absent from such arbitration for any reason,
including that such party shall have been the subject of any bankruptcy, reorganization, or insolvency proceeding.

 

(i)                
The parties shall indemnify the Arbitrator and any experts employed by the Arbitrator and hold them harmless from and against
any claim or demand arising out of any arbitration under this Agreement or any agreement contemplated hereby, unless resulting
from the willful misconduct of the person indemnified.

 

(j)                
This arbitration section shall survive the termination of this Agreement and any agreement contemplated hereby.

 

11.2         
Waiver of Jury Trial; Exemplary Damages.

 

(a)               
THE PARTIES TO THIS AGREEMENT HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVE ANY RIGHT EACH SUCH PARTY MAY HAVE TO
TRIAL BY JURY IN ANY ACTION OF ANY KIND OR NATURE, IN ANY COURT IN WHICH AN ACTION MAY BE COMMENCED, ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR ANY ADDITIONAL AGREEMENT, OR BY REASON OF ANY OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN OR AMONG ANY OF
THE PARTIES TO THIS AGREEMENT OF ANY KIND OR NATURE. NO PARTY SHALL BE AWARDED PUNITIVE OR OTHER EXEMPLARY DAMAGES RESPECTING ANY
DISPUTE ARISING UNDER THIS AGREEMENT OR ANY ADDITIONAL AGREEMENT.

 

(b)              
Each of the parties to this Agreement acknowledges that each has been represented in connection with the signing of this
waiver by independent legal counsel selected by the respective party and that such party has discussed the legal consequences and
import of this waiver with legal counsel. Each of the parties to this Agreement further acknowledge that each has read and understands
the meaning of this waiver and grants this waiver knowingly, voluntarily, without duress and only after consideration of the consequences
of this waiver with legal counsel.

 

    	24

    	 

    

 

 

11.3         
Attorneys’ Fees. The unsuccessful party to any Action arising out of this Agreement that is not resolved
by arbitration under Section 11.1 shall pay to the prevailing party all attorneys’ fees and costs actually incurred by the
prevailing party, in addition to any other relief to which it may be entitled. As used in this Section 11.3 and elsewhere
in this Agreement, “actual attorneys’ fees” or “attorneys’ fees actually incurred” means the
full and actual cost of any legal services actually performed in connection with the matter for which such fees are sought, calculated
on the basis of the usual fees charged by the attorneys performing such services, and shall not be limited to “reasonable
attorneys’ fees” as that term may be defined in statutory or decisional authority.

 

ARTICLE
XII

TERMINATION

 

12.1         
Termination Without Default; Expenses.

 

(a)               
In the event that the Closing of the transactions contemplated hereunder has not occurred by December 31, 2013 (the “Outside
Closing Date”), and no material breach of this Agreement by Parent, LuxCo, and BHN, on one hand, or Company and Sellers,
on the other hand, seeking to terminate this Agreement shall have occurred or have been made (as provided in Section 12.2 hereof),
each party hereto shall have the right, at its sole option, to terminate this Agreement without liability to the other side. Such
right may be exercised by each party hereto, giving written notice to the other at any time after the Outside Closing Date. Upon
receipt of such notice, neither party shall have any further obligation to the other under this Agreement, except for those obligations
that are expressly stated to survive the cancellation or termination of this Agreement. In the event this Agreement is terminated
pursuant to this Section 12(a), each party shall bear its own expenses incurred in connection with this Agreement.

 

(b)              
Parent and LuxCo shall have the right, at any time prior to the Real Property Investigation Period, time being of the essence,
to terminate this Agreement for any reason or no reason whatsoever if the results of the investigations in connection with the
Business, including the Real Property, are not satisfactory to Parent or LuxCo, in Parent’s or LuxCo's sole discretion, by
giving notice to Sellers or Company on or before the Real Property Investigation Period. Upon receipt of such notice, neither party
shall have any further obligation to the other under this Agreement, except for those obligations that are expressly stated to
survive the cancellation or termination of this Agreement. In the event this Agreement is terminated pursuant to this Section 12.1(b),
each party shall bear its own expenses incurred in connection with this Agreement.

 

    	25

    	 

    

 

 

12.2         
Termination Upon Default.

 

(a)               
Parent and LuxCo may terminate this Agreement by giving notice to the Sellers on or prior to the Closing Date, without prejudice
to any rights or obligations Parent or LuxCo may have, if Sellers or Company shall have materially breached any representation
or warranty or breached any agreement or covenant contained herein or in any Additional Agreement to be performed on or prior to
the Closing Date, and in either case, such breach shall not be cured by the earlier of the Outside Closing Date and ten (10) days
following receipt by the Sellers of a notice describing in reasonable detail the nature of such breach.

 

(b)              
The Sellers may terminate this Agreement by giving notice to Parent and LuxCo, without prejudice to any rights or obligations
Sellers or Company may have, if Parent or LuxCo shall have materially breached any of its covenants, agreements, representations,
and warranties contained herein to be performed on or prior to the Closing Date and such breach shall not be cured by the earlier
of the Outside Closing Date and ten (10) days following receipt by LuxCo of a notice describing in reasonable detail the nature
of such breach.

 

(c)               
In the event this Agreement is terminated by Parent or LuxCo pursuant to Section 12.2(a) and (b), Sellers and Company shall
be responsible for paying all of its own expenses and those of LuxCo incurred in connection with this Agreement.

 

(d)              
In the event this Agreement is terminated by the Sellers pursuant to Section 12.2(c), LuxCo shall be responsible for paying
all of its own expenses and those of Sellers or Company incurred in connection with this Agreement (provided, however, such expenses
of Sellers shall be limited to reasonable attorney’s fees of one counsel).

 

12.3         
Survival. The provisions of Section 11.3, as well as this Article XII, shall survive any termination hereof
pursuant to Article XII.

 

ARTICLE
XIII

MISCELLANEOUS

 

13.1         
Notices. Any notice hereunder shall be sent in writing, addressed as specified below, and shall be deemed
given: (a) if by hand or recognized courier service, by 4:00PM on a business day, addressee’s day and time, on the date of
delivery, and otherwise on the first business day after such delivery; (b) if by fax or email, on the date that transmission is
confirmed electronically, if by 4:00PM on a business day, addressee’s day and time, and otherwise on the first business day
after the date of such confirmation; or (c) five days after mailing by certified or registered mail, return receipt requested.
Notices shall be addressed to the respective parties as follows (excluding telephone numbers, which are for convenience only),
or to such other address as a party shall specify to the others in accordance with these notice provisions:

 

    	26

    	 

    

  

if to Parent, to:

 

Prime Acquisition Corp.

No. 322, Zhongshan East Road

Shijiazhuang

Hebei Province, 050011

People’s Republic of China

Telecopy: 650-618-2552

 

with a copy to (which shall not constitute notice):

Loeb & Loeb LLP

345 Park Avenue

New York, New York 10154

Attention: Mitchell S. Nussbaum, Esq.

Telecopy: +1 212.504.3013

 

if to LuxCo, to:

 

Prime BHN Luxembourg S.àr.l.

13-15 Avenue de la Liberte’, L-1931

Luxembourg

 

with a copy to (which shall not constitute notice):

Loeb & Loeb LLP

345 Park Avenue

New York, New York 10154

Attention: Mitchell S. Nussbaum, Esq.

Telecopy: +1 212.504.3013

 

if to BHN, to:

 

BHN LLC

6369 Mill Street, Suite 205

Rhinebeck, NY 12572

Telecopy: +1 845.876.8714

Attention: Marco Prete, Managing Member

 

with a copy to (which shall not constitute notice):

Reed Smith LLP

599 Lexington Avenue

New York, NY 10022

Attention: Gerald S. DiFiore

Telecopy: +1 212.521.5450

 

    	27

    	 

    

 

 

if to Company or Sellers:

 

Delfin S.r.l.

Attention: Cesare Lanati

Telecopy: + 39 02.36706848

 

with a copy to (which shall
not constitute notice):

 

Studio Associato R&P Legal - Rossotto, Colombatto
& Partners

Piazzale Luigi Cadorna n. 4

20123 Milano

Attention: Claudio Elestici

Telecopy: +39 02 8807222

 

13.2         
Amendments; No Waivers; Remedies.

 

(a)               
This Agreement cannot be amended, except by a writing signed by each party, or terminated orally or by course of conduct.
No provision hereof can be waived, except by a writing signed by the party against whom such waiver is to be enforced, and any
such waiver shall apply only in the particular instance in which such waiver shall have been given.

 

(b)              
Neither any failure or delay in exercising any right or remedy hereunder or in requiring satisfaction of any condition herein
nor any course of dealing shall constitute a waiver of or prevent any party from enforcing any right or remedy or from requiring
satisfaction of any condition. No notice to or demand on a party waives or otherwise affects any obligation of that party or impairs
any right of the party giving such notice or making such demand, including any right to take any action without notice or demand
not otherwise required by this Agreement. No exercise of any right or remedy with respect to a breach of this Agreement shall preclude
exercise of any other right or remedy, as appropriate to make the aggrieved party whole with respect to such breach, or subsequent
exercise of any right or remedy with respect to any other breach.

 

(c)               
Except as otherwise expressly provided herein, no statement herein of any right or remedy shall impair any other right or
remedy stated herein or that otherwise may be available.

 

(d)              
Notwithstanding anything else contained herein, neither shall any party seek, nor shall any party be liable for, punitive
or exemplary damages, under any tort, contract, equity, or other legal theory, with respect to any breach (or alleged breach) of
this Agreement or any provision hereof or any matter otherwise relating hereto or arising in connection herewith.

 

13.3         
Arms’ Length Bargaining; no Presumption Against Drafter. This Agreement has been negotiated at arms-length
by parties of equal bargaining strength, each represented by counsel or having had but declined the opportunity to be represented
by counsel and having participated in the drafting of this Agreement. This Agreement creates no fiduciary or other special relationship
between the parties, and no such relationship otherwise exists. No presumption in favor of or against any party in the construction
or interpretation of this Agreement or any provision hereof shall be made based upon which Person might have drafted this Agreement
or such provision.

 

    	28

    	 

    

 

 

13.4         
Publicity. Except as required by law, the parties agree that neither they nor their agents shall issue any
press release or make any other public disclosure concerning the transactions contemplated hereunder without the prior approval
of the other party hereto.

 

13.5         
Expenses. Except as otherwise expressly set forth herein, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the party incurring such cost or expense, provided that
all the notary public fees and expenses in connection with the Deed shall be borne by the Parent.

 

13.6         
No Assignment or Delegation. No party may assign any right or delegate any obligation hereunder, including
by merger, consolidation, operation of law, or otherwise, without the written consent of the other party. Any purported assignment
or delegation without such consent shall be void, in addition to constituting a material breach of this Agreement.

 

13.7         
Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State
of New York, without giving effect to the conflict of laws principles thereof.

 

13.8         
Counterparts; Facsimile Signatures. This Agreement may be executed in counterparts, each of which shall constitute
an original, but all of which shall constitute one agreement. This Agreement shall become effective upon delivery to each party
of an executed counterpart or the earlier delivery to each party of original, photocopied, or electronically transmitted signature
pages that together (but need not individually) bear the signatures of all other parties.

 

13.9         
Entire Agreement. This Agreement together with the Additional Agreements, sets forth the entire agreement
of the parties with respect to the subject matter hereof and thereof and supersedes all prior and contemporaneous understandings
and agreements related thereto (whether written or oral), all of which are merged herein. No provision of this Agreement or any
Additional Agreement may be explained or qualified by any agreement, negotiations, understanding, discussion, conduct or course
of conduct or by any trade usage. Except as otherwise expressly stated herein or any Additional Agreement, there is no condition
precedent to the effectiveness of any provision hereof or thereof. No party has relied on any representation from, warranty or
agreement of any person in entering into this Agreement, prior or contemporaneous or any Additional Agreement, except those expressly
stated herein or therein.

 

13.10     
Severability. A determination by a court or other legal authority that any provision that is not of the essence
of this Agreement is legally invalid shall not affect the validity or enforceability of any other provision hereof. The parties
shall cooperate in good faith to substitute (or cause such court or other legal authority to substitute) for any provision so held
to be invalid a valid provision, as alike in substance to such invalid provision as is lawful.

 

    	29

    	 

    

 

 

13.11     
Construction of Certain Terms and References; Captions. In this Agreement:

 

(a)               
References to particular sections and subsections, schedules, and exhibits not otherwise specified are cross-references
to sections and subsections, schedules, and exhibits of this Agreement.

 

(b)              
The words “herein,” “hereof,” “hereunder,” and words of similar import refer to this
Agreement as a whole and not to any particular provision of this Agreement, and, unless the context requires otherwise, “party”
means a party signatory hereto.

 

(c)               
Any use of the singular or plural, or the masculine, feminine, or neuter gender, includes the others, unless the context
otherwise requires; “including” means “including without limitation;” “or” means “and/or;”
“any” means “any one, more than one, or all;” and, unless otherwise specified, any financial or accounting
term has the meaning of the term under United States generally accepted accounting principles as consistently applied heretofore
by party.

 

(d)              
Unless otherwise specified, any reference to any agreement (including this Agreement), instrument, or other document includes
all schedules, exhibits, or other attachments referred to therein, and any reference to a statute or other law includes any rule,
regulation, ordinance, or the like promulgated thereunder, in each case, as amended, restated, supplemented, or otherwise modified
from time to time. Any reference to a numbered schedule means the same-numbered section of the disclosure schedule.

 

(e)               
If any action is required to be taken or notice is required to be given within a specified number of days following a specific
date or event, the day of such date or event is not counted in determining the last day for such action or notice. If any action
is required to be taken or notice is required to be given on or before a particular day which is not a Business Day, such action
or notice shall be considered timely if it is taken or given on or before the next Business Day.

 

(f)               
Captions are not a part of this Agreement, but are included for convenience, only.

 

(g)              
For the avoidance of any doubt, all references in this Agreement to “the knowledge or best knowledge of Sellers”,
“the knowledge or best knowledge of Company” or similar terms shall be deemed to include the actual or constructive
knowledge of any officers or any member of the Board of Directors of Sellers and Company, after reasonable inquiry.

 

13.12     
Further Assurances. Each party shall execute and deliver such documents and take such action, as may reasonably
be considered within the scope of such party’s obligations hereunder, necessary to effectuate the transactions contemplated
by this Agreement.

 

13.13     
Third Party Beneficiaries. Neither this Agreement nor any provision hereof confers any benefit or right upon
or may be enforced by any Person not a signatory hereto.

 

    	30

    	 

    

 

 

13.14     
Waiver. Reference is made to the final prospectus of Parent, dated March 24, 2011 (the “Prospectus”).
Sellers and Company have read the Prospectus and understand that Parent has established a trust account (“Trust Account”)
for the benefit of the public stockholders of Parent and the underwriters of the IPO pursuant to the Investment Management Trust
Agreement, dated as of March 30, 2011, between Parent and American Stock Transfer & Trust Company, as trustee. For and in consideration
of Parent and LuxCo agreeing to enter into this Agreement with Sellers and Company, each of Sellers and Company hereby agrees that
it does not have any right, title, interest or claim of any kind in or to any monies in the Trust Account and hereby agrees that
it will not seek recourse against the Trust Account for any claim it may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with Parent, LuxCo or BHN.

 

[The remainder of this
page intentionally left blank; signature pages to follow]

 

    	31

    	 

    

  

IN WITNESS WHEREOF, LuxCo,
Parent, BHN, Company and Sellers have each caused this Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.

 

 

    	32

    	 

    

 

 

 

 

    	33

    	 

    

  

EXHIBIT 3

 

REPRESENTATIONS AND WARRANTIES OF

THE COMPANY AND SELLERS

 

3.1 Corporate Existence
and Power. Company is a limited liability company duly organized, validly existing and in good standing under and by virtue
of the Laws of Italy. Company has all power and authority, corporate and otherwise, and all governmental licenses, franchises,
Permits, authorizations, consents and approvals required to own, manage and operate its properties and assets, including without
limitation the Real Property, and to carry on the Business as presently conducted and as proposed to be conducted and to sell it,
in whole or in part, to LuxCo. Company has not taken any action, adopted any plan, or made any agreement or commitment in respect
of any merger, consolidation, sale of all or substantially all of their assets, reorganization, recapitalization, dissolution or
liquidation.

 

3.2 Units. Sellers
owns all of the outstanding Units of Company, free and clear of all Liens, except for Permitted Liens.

 

3.3 Authorization.
Company has full legal capacity, power and authority to execute and deliver this Agreement and the Additional Agreements to which
such Company is named as a party, to perform such Company’s obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. This Agreement has been, and the Additional Agreements to which Company is named as a party, will
be at Closing, duly executed and delivered by Company, and this Agreement constitutes, and such Additional Agreements are, or upon
their execution and delivery at Closing will be, valid and legally binding agreements of Sellers and the Company, enforceable against
Sellers and the Company in accordance with their respective terms.

 

3.4 Governmental
Authorization. Sellers and the Company have obtained or completed all consent, approval, license or other action by or in respect
of, or registration, declaration or filing with, any Authority regarding the execution, delivery and performance by Sellers and
the Company of this Agreement or any Additional Agreements.

 

3.5 Non-Contravention.
None of the execution, delivery or performance by Company of this Agreement or any Additional Agreement does or will (a) contravene
or conflict with the organizational or constitutive documents of the Company, (b) contravene or conflict with or constitute a violation
of any provision of any Law or Order binding upon or applicable to the Company, (c) constitute a default under or breach of (with
or without the giving of notice or the passage of time or both) or violate or give rise to any right of termination, cancellation,
amendment or acceleration of any right or obligation of Company or require any payment or reimbursement or to a loss of any material
benefit relating to the Business to which Company is entitled under any provision of any Permit, Contract or other instrument or
obligations binding upon the Company or by which any of the Business’ assets, including without limitation the Real Property,
is or may be bound or any Permit, or (d) result in the creation or imposition of any Lien on any of the Business’ assets,
including, without limitation, the Real Property.

 

    	1

    	 

    

 

 

3.6 Consents.
The Contracts listed on Schedule 3.6 are the only Contracts binding upon Company, including without limitation Real Property, requiring
a consent, approval, authorization, order or other action of or filing with any Person as a result of the execution, delivery and
performance of this Agreement or any of the Additional Agreements or the consummation of the transactions contemplated hereby or
thereby (each of the foregoing, a “Contracts Subject to Consent”).

 

3.7 Financial Statements.

 

(a)               
Attached hereto as Schedule 3.7 are (i) the unaudited consolidated financial statements of Company as of and for the fiscal
years ended December 31, 2012, and 2011, consisting of the unaudited consolidated balance sheets as of such dates, the unaudited
consolidated income statements for the twelve (12) month periods ended on such dates, and the unaudited consolidated cash flow
statements for the twelve (12) month periods ended on such dates (the “Financial Statements”).

 

(b)              
The Financial Statements are complete and accurate and fairly present, in conformity with IFRS applied on a consistent basis,
the financial position of Company as of the dates thereof and the results of operations of Company for the periods reflected therein.
The Financial Statements (i) were prepared from the books and records of Company; (ii) were prepared on an accrual basis in accordance
with IFRS consistently applied; (iii) contain and reflect all necessary adjustments and accruals for a fair presentation of Company’s
financial condition as of their dates including for all warranty, maintenance, service and indemnification obligations; and (iv)
contain and reflect adequate provisions for all liabilities for all material Taxes applicable to Company with respect to the periods
then ended. Company has delivered to Parent or LuxCo complete and accurate copies of all “management letters” received
by it from its accountants and all responses during the last five (5) years by lawyers engaged by Company to inquiries from its
accountant or any predecessor accountants.

 

(c)               
Except for liabilities and obligations incurred in the ordinary course of business since December 31, 2012, there are no
liabilities, debts or obligations of any nature (whether accrued, fixed or contingent, liquidated or unliquidated, asserted or
unasserted or otherwise) relating to Company. All debts and liabilities, fixed or contingent, which should be included under IFRS
are included therein.

 

(d)              
The balance sheet included in the Financial Statements accurately reflects the outstanding Indebtedness of Company as of
the date thereof. Except as set forth on Schedule 3.7, Company does not have any Indebtedness.

 

(e)               
Schedule 3.7 sets forth a list of all Guarantees.

 

(f)               
All financial projections delivered by or on behalf of Company to Parent with respect to Company were prepared in good faith
using assumptions that each of Company and Sellers believes to be reasonable and each of Company or Sellers is not aware of the
existence of any fact or occurrence of any circumstances that is reasonably likely to have a Material Adverse Effect.

 

    	2

    	 

    

  

3.8 Books and Records.

 

(a)The Books
and Records accurately and fairly, in reasonable detail, reflect the transactions and dispositions of assets of and the providing
of services by Company. Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that:

 

(i)                
transactions are executed only in accordance with management’s authorization;

 

(ii)              
all income and expense items are promptly and properly recorded for the relevant periods in accordance with the revenue
recognition and expense policies as permitted by IFRS;

 

(iii)            
access to assets is permitted only in accordance with management’s authorization; and

 

(iv)            
recorded assets are compared with existing assets at reasonable intervals, and appropriate action is taken with respect
to any differences.

 

(b)Company has
heretofore made all Books and Records available to Parent and LuxCo for their inspection, and have heretofore delivered to Parent
and LuxCo complete and accurate copies of all documents referred to in the Schedules to this Agreement or that Parent or LuxCo
otherwise has requested. All Contracts, documents, and other papers or copies thereof delivered to Parent or LuxCo by or on behalf
of Company are accurate, complete, and authentic.

 

(c)All accounts,
books and ledgers of Company have been properly and accurately kept and completed in all material respects, and there are no material
inaccuracies or discrepancies of any kind contained or reflected therein.

 

3.9 Absence of Certain
Changes.

 

(a)Since December
31, 2012, the Business has been conducted in the ordinary course consistent with past practices, and there has not been:

 

(i)any Material
Adverse Change, or in any material diminishment in the value of the Business;

 

(ii)any transaction,
Contract or other instrument entered into, or commitment made, by Company relating to the Business or any of the Business’
assets (including without limitation the acquisition or disposition of Real Property) or any relinquishment by Company of any contract
or other right, in either case other than transactions and commitments in the ordinary course of business consistent in all respects,
including kind and amount, with past practices and those contemplated by this Agreement;

 

(iii)any bonus,
salary or other compensation paid or agreed to be paid to any employee; or

 

    	3

    	 

    

 

 

(iv)any creation
or other incurrence of any Lien other than Permitted Liens on any of the Company’ assets, including without limitation the
Real Property.

 

(b)Since December
31, 2012, through and including the date hereof, Company has not taken any action nor has any event occurred which would have violated
the covenants of Sellers set forth in Section 5.1 herein if such action had been taken or such event had occurred between the date
hereof and the Closing Date.

 

3.10 Properties;
Title to the Company’ Assets.

 

(a)The Tangible Assets
have no defects, are in good operating condition and repair and function in accordance with their intended uses (ordinary wear
and tear excepted) and have been properly maintained, and are suitable for their present uses and meet all specifications and warranty
requirements with respect thereto. Schedule 3.10 sets forth a complete list, setting forth a description and location, of the Tangible
Assets as of a date within five days of the date of this Agreement. All of the Tangible Assets are located at each property that
is being contributed and is part of the Business.

 

(b)Company has good,
valid and marketable title in and to, or, in the case of the Lease and the assets which are leased or licensed pursuant to Contracts,
a valid leasehold interest or license in or a right to use each of its respective assets, free and clear of all Liens other than
Permitted Liens. The Company’s assets constitute all of the assets of any kind or description whatsoever, including goodwill,
that are used or useful in the operation of the Business.

 

3.11 Litigation.
Except as set forth on Schedule 3.11, there is no Action (or any basis therefor) pending against Company or Sellers in connection
with the Business, or threatened against or affecting, Company, Sellers or any of the Business’ assets, including without
limitation the Real Property or any Contract before any court, Authority or official or which in any manner challenges or seeks
to prevent, enjoin, alter or delay the transactions contemplated hereby or by the Additional Agreements. There are no outstanding
judgments against Company or Sellers affecting or which may affect the Business. Company is not, nor has it been in the past five
(5) years, subject to any proceeding with any Authority.

 

3.12 Contracts.

 

(a)Each Contract
is a valid and binding agreement, and is in full force and effect, and neither the Company, nor, to the best knowledge of Company
or Sellers, any other party thereto, is in breach or default (whether with or without the passage of time or the giving of notice
or both) under the terms of any such Contract. Company, Sellers or any other party thereto has not assigned, delegated, or otherwise
transferred any of their rights or obligations with respect to any Contracts, or granted any power of attorney with respect thereto
or to any of the Business’ assets, including without limitation the Real Property. No Contract (i) requires Sellers to post
a bond or deliver any other form of security or payment to secure its obligations thereunder or (ii) imposes any non-competition
covenants that may be binding on, or restrict the Business or require any payments by or with respect to LuxCo or any of its Affiliates.
Company has given to LuxCo true and correct (A) copies of each written Contract and (B) written summaries of each oral Contract.

 

    	4

    	 

    

  

(b)The Contracts
constitute all the material agreements, statements of work, arrangements, understandings and other instruments in effect to which
any of the Business’ assets, including without limitation the Real Property, are bound. Schedule 3.12 lists all material
Contracts, oral or written, separately referencing the applicable subsection below in each case, including:

 

(i)all client Contracts
which have generated revenues to Company or are expected to generate revenues to Company in excess of $10,000 in any of the current
or next two (2) fiscal years or any of the two (2) preceding fiscal years of Company;

 

(ii)all Leases;

 

(iii)any other
Contract pursuant to which Company is required to pay, has paid or is entitled to receive or has received an amount in excess of
$50,000 during the current fiscal year or any one of the two preceding fiscal years;

 

(iv)all employment
Contracts, employee leasing Contracts, and consultant and sales representatives Contracts;

 

(v)all material
sales, agency, factoring, commission and distribution contracts to which Company is a party;

 

(vi)all ongoing
agreements for purchases or receipt by Sellers of media, supplies, equipment, goods or services (other than under Section 3.12(b)(iii)
or (iv));

 

(vii)all joint
venture, strategic alliance, limited liability company and partnership agreements to which Company is a party;

 

(viii)all significant
documents relating to any acquisitions or dispositions of assets, including without limitation the Real Property, by Company;

 

(ix)all material
licensing agreements, including agreements licensing Intellectual Property Rights, other than “shrink wrap” licenses;

 

(x)all secrecy,
confidentiality and nondisclosure agreements applicable to Company;

 

(xi)all contracts
relating to patents, trademarks, service marks, trade names, brands, copyrights, trade secrets and other Intellectual Property
Rights of Company;

 

(xii)all guarantees,
indemnification arrangements and other hold harmless arrangements made or provided by Company in connection with the Business,
including all ongoing agreements for repair, warranty, maintenance, service, indemnification or similar obligations;

 

    	5

    	 

    

  

(xiii)all contracts
or agreements pertaining to the Business to which Company is a party;

 

(xiv)all agreements
relating to real and tangible personal property, including any Real Property financial lease, sublease or space sharing, license
or occupancy agreement;

 

(xv)all material
agreements relating to the Business; and

 

(xvi)all agreements
relating to outstanding Indebtedness of Company.

 

(c)Company
is in compliance with all covenants, including all financial covenants, in all notes, indentures, bonds and other instruments or
agreements evidencing any Indebtedness.

 

3.13 Insurance.
Schedule 3.13 contains a true, complete and correct list (including the names and addresses of the insurers, the names of the Persons
if other than Company to whom such insurance policies have been issued, the expiration dates thereof, the annual premiums and payment
terms thereof, whether it is a “claims made” or an “occurrence” policy and a brief identification of the
nature of the policy) of all liability, property, workers’ compensation or comparable insurance and other insurance policies
currently in effect that insure Company and the property, assets, including without limitation the Real Property, included in the
Business. Each such insurance policy is valid and binding and in full force and effect, all premiums due thereunder have been paid
and Company has not received any notice of cancellation or termination in respect of any such policy or default thereunder. Company
believes such insurance policies, in light of the nature of the Business are in amounts and have coverage that are reasonable and
customary for Persons engaged in such business and having such assets and properties. Company has not received notice that any
insurer under any policy referred to in this Section 3.13 is denying liability with respect to a claim thereunder or defending
under a reservation of rights clause. Except as set forth on Schedule 3.13, within the last two (2) years, Company has not filed
for any claims exceeding $50,000 against any of their insurance policies. Company has not received written notice from any of its
insurance carriers or brokers that any premiums will be materially increased in the future, and does not have any reason to believe
that any insurance coverage listed on Schedule 3.13 will not be available in the future to LuxCo on substantially the same terms
as now in effect.

 

3.14 Licenses and
Permits. Schedule 3.14 correctly lists each license, franchise, permit, order or approval or other similar authorization affecting,
or relating in any way to Company, together with the name of the Authority issuing the same (the “Permits”). Such Permits
are valid and in full force and effect, and none of the Permits will, assuming the related consents related to those Contracts
subject to Consent have been obtained or waived prior to the Closing Date, be terminated or impaired or become terminable as a
result of the transactions contemplated hereby. Company has all Permits necessary for it to operate.

 

3.15 Compliance
with Laws. Except as set forth on Schedule 3.15, Company is not in violation of, has violated, and, to the best knowledge of
Company and Sellers, is neither under investigation with respect to nor has been threatened in writing to be charged with or given
notice of any violation or alleged violation of, any Law, or judgment, order or decree entered by any court, arbitrator or Authority,
domestic or foreign, nor to the best knowledge of Sellers is there any basis for any such charge and within the last 24 months
Company has not received any subpoenas by any Authority.

 

    	6

    	 

    

 

 

(a)Without limiting
the foregoing paragraph, Company is not in violation of, has not violated, and to the best knowledge of Sellers and Company, is
not under investigation with respect to nor has been threatened or charged with or given notice of any violation of any provisions
of any Law applicable to Company.

 

(b)No permit,
license or registration is required in the conduct of the Business under any of the Laws described in this Section 3.15.

 

3.16 Accounts Receivable;
Loans. All accounts receivables and notes of Company whether reflected on Schedule 3.16 or otherwise, represent valid obligations
arising from lease agreements or services actually performed by Company in the ordinary course of business. Except as set forth
on Schedule 3.16, there is no contest, claim, or right of setoff in any lease agreement with tenants or in other agreements with
any maker of an account receivable or note relating to the amount or validity of such account, receivables or note. All accounts,
receivables or notes are good and collectible in the ordinary course of business. The information set forth on Schedule 3.16 separately
identifies any and all accounts, receivables or notes of Company which are owed by any Affiliate of Company or Sellers.

 

3.17 Customers;
Revenues. The list of the Company’s 10 largest customers or tenants based on revenues derived by the Company’s
customers or tenants, which together with related revenue information for the Company’s December 31, 2012 and 2011 fiscal
years, is attached hereto as Schedule 3.17 and is true and complete. Except as indicated on Schedule 3.17, Company has not been
notified, on a formal or informal basis, of the probability or actuality or otherwise have any reason to believe that any of its
customers or tenants from which Company derived revenues in excess of $100,000 in its 2011 fiscal year or in the 2012 Period (as
shown on Schedule 3.22) intends to or will cancel, substantially limit, terminate or materially modify the terms of its business
relationship with Company. Company has not received any written notice or communication from its customers or tenants to the effect
that the revenues with respect to such customers or tenants should not, for the foreseeable future after the Closing, in the aggregate
remain constant or increase from the amounts shown on Schedule 3.16 or why the practices of Company with respect to the billing
of and collections from its customers or tenants should not, for the foreseeable future after the Closing, be able to be continued
by Company on substantially the same basis.

 

3.18 Pre-payments.
Except as set forth on Schedule 3.18, Company has not received any payments with respect to lease agreements to be paid or to any
services to be rendered after the Closing.

 

3.19 Employees.
Company has no employees.

 

    	7

    	 

    

 

 

3.20 Employee Benefits
and Compensation. There are no employee benefits plans maintained or contributed to by Company and with respect to which Company
could incur or could have incurred any direct or indirect, fixed or contingent liability.

 

3.21 Real Property

 

(a)Company has
good and valid (and, in the case of owned Real Property, good and marketable fee simple, or comparable right) title to, or a valid
leasehold interest in, all Real Property and personal property and other assets reflected on Exhibit B. All such properties and
assets (including leasehold interests) are free and clear of Liens except for the following (collectively referred to as “Permitted
Lien”):

 

(i)those items
set forth on Schedule 3.21(a);

 

(ii)easements,
rights of way, zoning ordinances and other similar encumbrances affecting Real Property which are not, individually or in the aggregate,
material to the Business; or

 

(iii)other than
with respect to owned Real Property, liens arising under original purchase price conditional sales contracts and equipment leases
with third parties entered into in the ordinary course of business consistent with past practice which are not, individually or
in the aggregate, material to the Business.

 

(b)Schedule 3.21
(b) lists: (i) the street address of each parcel of Real Property; (ii) if such property is leased or subleased by Company, the
landlord under the lease, the rental amount currently being paid, and the expiration of the term of such lease or sublease for
each leased or subleased property; and (iii) the current use of such property.

 

(c)With respect
to owned Real Property, Company has delivered or made available to Parent or LuxCo true, complete and correct copies of the deeds
and other comparable instruments (as duly recorded in the appropriate cadastral offices and land registries) by which Company and
Sellers acquired such Real Property, and copies of all title insurance policies, opinions, abstracts and surveys in the possession
of Sellers and Company, relating to the Real Property.

 

(d)With respect
to any Lease: (i) it is valid, binding and in full force and effect; (ii) all rents and additional rents and other sums, expenses
and charges due thereunder have been paid; (iii) the lessee has been in peaceable possession since the commencement of the original
term thereof; (iv) no waiver, indulgence or postponement of the lessee’s obligations thereunder has been granted by the lessor;
(v) there exists no default or event of default thereunder by Company or to the best knowledge of Sellers by any other party thereto;
(vi) there exists no occurrence, condition or act which, with the giving of notice, the lapse of time or the happening of any further
event or condition, would become a default or event of default by Company thereunder; and (vii) there are no outstanding claims
of breach or indemnification or notice of default or termination thereunder. The Real Property leased by Company is in a state
of maintenance and repair in all material respects adequate and suitable for the purposes for which it is presently being used,
and there are no material repair or restoration works likely to be required in connection with any of the leased Real Properties.
Company is in physical possession and actual and exclusive occupation of the whole of the leased property, none of which is subleased
or assigned to another Person.

 

    	8

    	 

    

  

(e)Company and
Sellers do not owe any brokerage commission with respect to any Real Property.

 

3.22 Tax Matters.
Except as set forth on Schedule 3.22, Company has paid all Taxes due in connection with the Business, including without limitation
the so-called Imposta Municipale Unica (IMU). Company has duly and timely filed all Tax Returns which are required to be
filed by or with respect to it, and has paid all Taxes for which a Lien may be imposed on any of the Business’ assets which
have become due.

 

3.23 Environmental
Laws. Company has complied in all material respects with all Laws relating to pollution or the protection of the environment
or human health or Hazardous Materials (“Environmental Laws”), and there is not and there has not been at any time
any notice, demand, request for information, complaint, order, investigation, or review pending or, to the best knowledge of Company
and Sellers, threatened by any Authority with respect to any alleged violation by Company of any Environmental Law. Company has
not been requested by any Authority to pay any sum of money, or otherwise aid or take any action or refrain from taking actions,
to abate or remediate any environmental occurrence or condition (including removal of asbestos or any other potentially hazardous
substance). All Real Property is in compliance in all material respects with all Environmental Laws and no environmental site assessments
for any such Real Property have identified any violations of any Environmental Laws in connection therewith. Company has not retained
or assumed, by contract or operation of Law, any liabilities or obligations of third parties under Environmental Laws, including
any obligations of Company. Company is not aware of or reasonably anticipates, as of the Closing Date, any condition, event or
circumstance concerning the release or regulation of Hazardous Materials that might, after the Closing Date, prevent, impede or
materially increase the costs associated with the ownership, lease, operation, performance or use of the Business or assets of
Company as currently carried out.

 

3.24 Finders’
Fees. There is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act
on behalf of Company or Sellers or any of their Affiliates who might be entitled to any fee or commission from Parent, LuxCo or
any of their Affiliates upon consummation of the transactions contemplated by this Agreement.

 

3.25 Powers of Attorney
and Suretyships. Except as set forth on Schedule 3.25, Company has not general or special powers of attorney outstanding (whether
as grantor or grantee thereof) or any obligation or liability (whether actual, accrued, accruing, contingent, or otherwise) as
guarantor, surety, co-signer, endorser, co-maker, indemnitor or otherwise in respect of the obligation of any Person.

 

3.26 Other Information.
Neither this Agreement nor any of the documents or other information made available to Parent, LuxCo or their Affiliates, attorneys,
accountants, agents or representatives pursuant hereto or in connection with Parent or LuxCo’s due diligence review of Company,
Sellers, the Real Property, the Business assets or the transactions contemplated by this Agreement and the Additional Agreements
contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary in order
to make the statements contained therein not misleading. Company provided Parent and LuxCo all material information regarding Company,
the Business and the Real Property.

 

    	9

    	 

    

  

3.27 Certain Business
Practices. Neither Company, nor any director, officer, agent or employee of Company (in their capacities as such) has (i) used
any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made
any unlawful payment to foreign or domestic government officials or employees, to foreign or domestic political parties or campaigns
or violated any provision of the Foreign Corrupt Practices Act of 1977 or (iii) made any other unlawful payment. Neither Company,
nor any of its Subsidiaries, nor any director, officer, agent or employee of Company (nor any Person acting on behalf of any of
the foregoing, but solely in his or her capacity as a director, officer, employee or agent of Company) has, since January 1, 2000,
directly or indirectly, given or agreed to give any gift or similar benefit in any material amount to any customer, supplier, governmental
employee or other Person who is or may be in a position to help or hinder Company or assist Company in connection with any actual
or proposed transaction, which, if not given could reasonably be expected to have had an adverse effect on Company, or which, if
not continued in the future, could reasonably be expected to adversely affect the business or prospects of Company that could reasonably
be expected to subject Sellers to suit or penalty in any private or governmental litigation or proceeding.

 

3.28 Money Laundering
Laws. The operations of Company are and have been conducted at all times in compliance with laundering statutes in all applicable
jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered
or enforced by any governmental authority (collectively, the “Money Laundering Laws”), and no Action involving Company
and the Business with respect to the Money Laundering Laws is pending or, to the best knowledge of Sellers, threatened.

 

3.29 OFAC. Company
is not, or any of its directors or officers, agent, employee, affiliate or Person acting on behalf of Company is, currently identified
on the specially designated nationals or other blocked person list or otherwise currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and Company has not, directly or
indirectly, used any funds, or loaned, contributed or otherwise made available such funds to any Person, in connection with any
sales or operations in Cuba, Iran, Syria, Sudan, Myanmar or any other country sanctioned by OFAC or for the purpose of financing
the activities of any Person currently subject to, or otherwise in violation of, any U.S. sanctions administered by OFAC in the
last five (5) fiscal years.

 

    	10

    	 

    

  

EXHIBIT 4

 

REPRESENTATIONS AND WARRANTIES OF PARENT,
LUXCO AND BHN

 

4.1 Corporate Existence
and Power. Parent is a company duly organized, validly existing and in good standing under the laws of the Cayman Island. LuxCo
is a company duly organized, validly existing and in good standing under the laws of Luxembourg. BHN is a company duly organized,
validly existing and in good standing under the laws of the state of New York. Parent owns all of the outstanding equity interests
in LuxCo.

 

4.2 Corporate Authorization.
The execution, delivery and performance by Parent, LuxCo and BHN of this Agreement and the Additional Agreements and the consummation
by Parent, LuxCo and BHN of the transactions contemplated hereby and thereby are within the corporate powers of Parent, LuxCo and
BHN, and have been duly authorized by all necessary corporate action on the part of Parent, LuxCo and BHN. Each of this Agreement
and the Additional Agreements have been duly executed and delivered by Parent, LuxCo and BHN and it constitutes a valid and legally
binding agreement of Parent, LuxCo and BHN, enforceable against them in accordance with its terms.

 

4.3 Parent Board
Approval. The board of directors of Parent (including any required committee or subgroup of such board) has, as of the date
of this Agreement, unanimously (i) declared the advisability of the transactions contemplated by this Agreement, (ii) determined
that the transactions contemplated hereby are in the best interests of the stockholders of Parent, and (iii) determined that the
transactions contemplated hereby constitutes a “Business Transaction” as such term is defined in Parent’s Amended
and Restated Memorandum and Article of Association. Assuming no more than a number of shares of the Parent Common Stock equal to
eighty-three percent (83%) of the “IPO Shares” as defined in the Parent’s Amended and Restated Memorandum and
Article of Association, elect to redeem their Parent Common Stock in the Tender Offer, no other action on the part of Parent’s
stockholders is required to consummate the transactions contemplated hereby and upon consummation thereof, Article 156 of Parent’s
certificate of incorporation, as amended, shall no longer be applicable. The execution, delivery and performance by Parent of this
Agreement and the Additional Agreements and the consummation by Parent of the transactions contemplated hereby and thereby are
within the corporate powers of Parent, and have been duly authorized by all necessary corporate action on the part of Parent. This
Agreement has been duly executed and delivered by Parent and it constitutes a valid and legally binding agreement of Parent, enforceable
against it in accordance with its terms.

 

4.4 Governmental
Authorization. Neither the execution, delivery nor performance by Parent and LuxCo of this Agreement requires any consent,
approval, license or other action by or in respect of, or registration, declaration or filing with, any Authority except for any
filings required to be made in connection with the Registration Rights Agreement.

 

4.5 Non-Contravention.
The execution, delivery and performance by Parent, LuxCo and BHN of this Agreement do not and will not (i) contravene or conflict
with the organizational or constitutive documents of Parent, LuxCo or BHN, or (ii) contravene or conflict with or constitute a
violation of any provision of any Law, judgment, injunction, order, writ, or decree binding upon Parent, LuxCo or BHN.

 

    	1

    	 

    

  

4.6 Finders’
Fees. Except for Stabilfin SRL, and Morgan Joseph TriArtisan LLC, there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of Parent, LuxCo, BHN or any of their Affiliates who might be entitled
to any fee or commission from Sellers upon consummation of the transactions contemplated by this Agreement or any of the Additional
Agreements.

 

4.7 Issuance of
Shares. The Exchange Shares, when issued, will be duly authorized, validly issued, fully paid and nonassessable, free and clear
of Liens.

 

4.8 Capitalization
of Parent. The authorized capital stock of Parent consists of 50,000,000 shares of Parent Common Stock and 1,000,000 shares
of preferred stock, par value $0.001 per share, of which 1,886,028 shares of Parent Common Stock are issued and outstanding as
of the date hereof and no shares of preferred stock are issued and outstanding. 7,080,050 warrants and 60,000 options to purchase
shares of Parent Common Stock are outstanding. A unit purchase option to purchase 215,000 units (consisting of one share of Parent
Common Stock and one warrant) for $12.00 per unit is issued and outstanding. No shares of capital stock or other voting securities
of Parent are issued, reserved for issuance or outstanding. All outstanding shares of Parent Common Stock are duly authorized,
validly issued, fully paid and nonassessable and not subject to or issued in violation of any purchase option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of the Companies Law (2011 Revision) of the Cayman
Islands, Parent’s organizational documents or any contract to which Parent is a party or by which Parent is bound.

 

4.9 Information
Supplied. None of the information supplied or to be supplied by Parent expressly for inclusion or incorporation by reference
in the filings with the SEC or the mailings to Parent’s stockholders and warrant holders as it relates to the Business Combination
Tender Offer will, at the date of filing or mailing, or any amendment thereto, as the case may be, contain any untrue statement
of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not misleading (subject to the qualifications and limitations
set forth in the materials provided by Parent or that are included in the Parent SEC filings or mailings).

 

4.10 Trust Fund.
As of the date of this Agreement (and immediately prior to the Closing Date), Parent has (and will have
immediately prior to the Closing Date) at least $6,453,080.40 in the trust fund established by Parent for the benefit of its public
stockholders in the Trust Account, such monies invested in “government securities” (as such term is defined in the
Investment Company Act of 1940, as amended), and held in trust pursuant to the Investment Management
Trust Agreement, dated as of March 30, 2011, between Parent and American Stock Transfer & Trust Company as trustee.

 

    	2

    	 

    

  

4.11 Parent SEC
Documents and Parent Financial Statements. Parent has filed all forms, reports, schedules, statements and other documents,
including any exhibits thereto, required to be filed or furnished by Parent with the SEC since March 24, 2011 under the Exchange
Act or the Securities Act, together with any amendments, restatements or supplements thereto, and will file all such forms, reports,
schedules, statements and other documents required to be filed subsequent to the date of this Agreement (the “Additional
Parent SEC Documents”). Parent has made available to the Sellers copies in the form filed with the SEC of all of the following,
except to the extent available in full without redaction on the SEC’s website through EDGAR for at least two (2) days prior
to the date of this Agreement: (i) Parent’s Annual Reports on Form 20-F for each fiscal year of Parent beginning with the
first year Parent was required to file such a form, (ii) all proxy statements relating to Parent’s meetings of stockholders
(whether annual or special) held, and all information statements relating to stockholder consents, since the beginning of the first
fiscal year referred to in clause (i) above, (iii) its Reports of Foreign Private Issuer on Form 6-K filed since the beginning
of the first fiscal year referred to in clause (i) above, and (iv) all other forms, reports, registration statements and other
documents filed by Parent with the SEC since Parent’s formation (the forms, reports, registration statements and other documents
referred to in clauses (i), (ii), (iii) and (iv) above, whether or not available through EDGAR, are, collectively, the “Parent
SEC Documents”). The Parent SEC Documents were, and the Additional Parent SEC Documents will be, prepared in all material
respects in accordance with the requirements of the Securities Act, the Exchange Act, and the Sarbanes-Oxley Act, as the case may
be, and the rules and regulations thereunder. The Parent SEC Documents did not, and the Additional Parent SEC Documents will not,
at the time they were or are filed, as the case may be, with the SEC (except to the extent that information contained in any Parent
SEC Document or Additional Parent SEC Document has been or is revised or superseded by a later filed Parent SEC Document or Additional
Parent SEC Document, then on the date of such filing) contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. From the date of the most recent Parent SEC Document there has been no Parent Material
Adverse Effect. As used in this Section 4.11, the term “file” shall be broadly construed to include any manner in which
a document or information is furnished, supplied or otherwise made available to the SEC.

 

    	3

    	 

    

 

EXHIBIT 8

 

BUSINESS COMBINATION
TENDER OFFER

 

(a)               
Prior to the Closing Date, Parent will provide its stockholders with the opportunity to redeem their shares of Parent Common
Stock for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, less Taxes, upon the
consummation of the transactions contemplated by this Agreement (the “Business Combination Tender Offer”).

 

(b)              
Business Combination Tender Offer Documents. Each of Parent, LuxCo, BHN, Company, and the Sellers agree to correct
promptly any information provided by it for use in the Business Combination Tender Offer Documents that shall have become false
or misleading in any material respect, and Parent further agrees to take all steps necessary to cause the Schedule TOs, as so corrected,
to be filed with the SEC, and the other Business Combination Tender Offer Documents, as so corrected, to be disseminated to holders
of Parent Common Stock, in each case as and to the extent required by applicable federal securities laws.

 

(c)               
Company Cooperation. The Company and Sellers acknowledge that a substantial portion of the filings with the SEC and
mailings to Parent’s stockholders with respect to the Business Combination Tender Offer shall include disclosure regarding
the Company and its management, operations and financial condition. Accordingly, each of the Company and the Sellers agrees to
as promptly as reasonably practical provide Parent with such information as shall be reasonably requested by Parent for inclusion
in or attachment to the Business Combination Tender Offer Documents. Each of the Company and Sellers understands that such information
shall be included in the Offer Documents and/or responses to comments from the SEC or its staff in connection therewith and mailings.
The Company shall make, and cause each Subsidiary to make, their managers, directors, officers and employees available to Parent
and its counsel in connection with the drafting of such filings and mailings and responding in a timely manner to comments from
the SEC.

 

(d)              
Other Information. None of the information supplied or to be supplied by the Company and the Sellers with respect
to the Company and the Sellers expressly for inclusion or incorporation by reference in the filings with the SEC or the mailings
to Parent’s stockholders and warrant holders as it relates to the Business Combination Tender Offer will, at the date of
filing or mailing, or any amendment thereto, as the case may be, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading (subject to the qualifications and limitations set forth in the materials provided by
the Company and the Sellers or that is included in the SEC filings or mailings).

 

    	1

    	 

    

 

SCHEDULE I

 

SELLERS

 

    	1

    	 

    

 

 

SCHEDULE II

 

MORTGAGES

 

    	2

    	 

    

 

 

EXHIBIT A

 

FINANCIAL LEASE AGREEMENTS

 

    	1

    	 

    

 

 

EXHIBIT B

 

REAL PROPERTIES

 

    	1

    	 

    

 

 

EXHIBIT C

 

PLEDGE AGREEMENT

 

    	1

    	 

    

 

 

EXHIBIT D

 

TRANSACTION VALUE
AGREEMENT

 

    	1

    	 

    

 

 

EXHIBIT E

 

COMPANY’S COUNSEL
OPINION

 

    	1

    	 

    

 

 

EXHIBIT F

 

STOCKHOLDERS AGREEMENT

 

The following actions
shall be governed by the Stockholders Agreement, pursuant to which Company shall not, without Sellers’ prior written consent:

 

i.amend its articles
of association or comparable document;

 

ii.without prejudice
to paragraph (v) below regarding assets, acquire or transfer, by way of merger, contribution of assets, purchase or sale of shares
or assets (a) any interest in a company (excluding investments in liquid shares of limited liability entities made solely for cash
management purposes), or (b) any going concern;

 

iii.alter in any
way its registered share capital (through an increase, a reduction, a redemption or otherwise) or issue (or agree to issue) any
shares, securities or any options, warrants, or other rights to purchase any such shares or any securities convertible into or
exchangeable for such shares, or more generally carry out any transaction concerning the distribution of share capital, voting
rights and rights to the Company profits;

 

iv.incur additional
third party indebtedness for borrowed money, save for the utilization in the ordinary course of business of any credit lines currently
made available to the Company;

 

v.except in the
ordinary course of business, (a) sell, transfer or otherwise dispose of any fixed assets of Company or (b) accept to create any
new Lien over the properties or assets of Company;

 

vi.enter into any
contract other than in the ordinary course of business;

 

vii.make capital
expenditures, other than in the ordinary course of business;

 

viii.enter into
any sale and lease-back arrangements whatsoever, other than in the ordinary course of business;

 

ix.change the debtors
payment methods and policy, assessed on a country-by-country basis, or the issue of invoices or collection of receivables policies;

 

x.amend its accounting
methods and practices;

 

xi.launch new activities
or enter into any contract which may result in a material change in the nature or scope of the business of Company;

 

xii.enter into
any joint-venture, unlimited liability partnership or other similar arrangement with any third party; and

 

xiii.amend, modify
or waive any provision of the Pledge Agreement.

 

    	1

    	 

    

 

DISCLOSURE SCHEDULES

 

    	1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00219-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00219-of-00352.parquet"}]]