Document:

Exhibit 4.7

 

VERASTEM, INC.

 

and

 

                                            , as Trustee

 

INDENTURE

 

Dated as of      ,        

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
PAGE
    
	
ARTICLE 1
    	
DEFINITIONS AND INCORPORATION BY   REFERENCE
    	
1
    
	
1.1.
    	
DEFINITIONS
    	
1
    
	
1.2.
    	
OTHER DEFINITIONS
    	
5
    
	
1.3.
    	
INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
    	
6
    
	
1.4.
    	
RULES OF CONSTRUCTION
    	
6
    
	
ARTICLE 2
    	
THE SECURITIES
    	
7
    
	
2.1.
    	
ISSUABLE IN SERIES
    	
7
    
	
2.2.
    	
ESTABLISHMENT OF TERMS OF SERIES OF SECURITIES
    	
7
    
	
2.3.
    	
EXECUTION AND AUTHENTICATION
    	
9
    
	
2.4.
    	
REGISTRAR AND PAYING AGENT
    	
10
    
	
2.5.
    	
PAYING AGENT TO HOLD ASSETS IN TRUST
    	
11
    
	
2.6.
    	
SECURITYHOLDER LISTS
    	
12
    
	
2.7.
    	
TRANSFER AND EXCHANGE
    	
12
    
	
2.8.
    	
REPLACEMENT SECURITIES
    	
12
    
	
2.9.
    	
OUTSTANDING SECURITIES
    	
13
    
	
2.10.
    	
WHEN TREASURY SECURITIES DISREGARDED; DETERMINATION OF HOLDERS’   ACTION
    	
13
    
	
2.11.
    	
TEMPORARY SECURITIES
    	
14
    
	
2.12.
    	
CANCELLATION
    	
14
    
	
2.13.
    	
PAYMENT OF INTEREST; DEFAULTED INTEREST; COMPUTATION OF   INTEREST
    	
14
    
	
2.14.
    	
CUSIP NUMBER
    	
15
    
	
2.15.
    	
PROVISIONS FOR GLOBAL SECURITIES
    	
15
    
	
2.16.
    	
PERSONS DEEMED OWNERS
    	
16
    
	
ARTICLE 3
    	
REDEMPTION
    	
16
    
	
3.1.
    	
NOTICES TO TRUSTEE
    	
16
    
	
3.2.
    	
SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED
    	
17
    
	
3.3.
    	
NOTICE OF REDEMPTION
    	
17
    
	
3.4.
    	
EFFECT OF NOTICE OF REDEMPTION
    	
18
    
	
3.5.
    	
DEPOSIT OF REDEMPTION PRICE
    	
18
    
	
3.6.
    	
SECURITIES REDEEMED IN PART
    	
19
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
PAGE
    
	
ARTICLE 4
    	
COVENANTS
    	
19
    
	
4.1.
    	
PAYMENT OF SECURITIES
    	
19
    
	
4.2.
    	
SEC REPORTS
    	
19
    
	
4.3.
    	
WAIVER OF STAY, EXTENSION OR USURY LAWS
    	
20
    
	
4.4.
    	
COMPLIANCE CERTIFICATE
    	
20
    
	
4.5.
    	
CORPORATE EXISTENCE
    	
20
    
	
ARTICLE 5
    	
SUCCESSOR CORPORATION
    	
21
    
	
5.1.
    	
LIMITATION ON CONSOLIDATION, MERGER AND SALE OF ASSETS
    	
21
    
	
5.2.
    	
SUCCESSOR PERSON SUBSTITUTED
    	
21
    
	
ARTICLE 6
    	
DEFAULTS AND REMEDIES
    	
22
    
	
6.1.
    	
EVENTS OF DEFAULT
    	
22
    
	
6.2.
    	
ACCELERATION
    	
23
    
	
6.3.
    	
REMEDIES
    	
23
    
	
6.4.
    	
WAIVER OF PAST DEFAULTS AND EVENTS OF DEFAULT
    	
24
    
	
6.5.
    	
CONTROL BY MAJORITY
    	
24
    
	
6.6.
    	
LIMITATION ON SUITS
    	
24
    
	
6.7.
    	
RIGHTS OF HOLDERS TO RECEIVE PAYMENT
    	
25
    
	
6.8.
    	
COLLECTION SUIT BY TRUSTEE
    	
25
    
	
6.9.
    	
TRUSTEE MAY FILE PROOFS OF CLAIM
    	
25
    
	
6.10.
    	
PRIORITIES
    	
26
    
	
6.11.
    	
UNDERTAKING FOR COSTS
    	
26
    
	
ARTICLE 7
    	
TRUSTEE
    	
27
    
	
7.1.
    	
DUTIES OF TRUSTEE
    	
27
    
	
7.2.
    	
RIGHTS OF TRUSTEE
    	
28
    
	
7.3.
    	
INDIVIDUAL RIGHTS OF TRUSTEE
    	
29
    
	
7.4.
    	
TRUSTEE’S DISCLAIMER
    	
29
    
	
7.5.
    	
NOTICE OF DEFAULT
    	
29
    
	
7.6.
    	
REPORTS BY TRUSTEE TO HOLDERS
    	
29
    
	
7.7.
    	
COMPENSATION AND INDEMNITY
    	
30
    
	
7.8.
    	
REPLACEMENT OF TRUSTEE
    	
30
    

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
PAGE
    
	
7.9.
    	
SUCCESSOR TRUSTEE BY CONSOLIDATION, MERGER OR CONVERSION
    	
31
    
	
7.10.
    	
ELIGIBILITY; DISQUALIFICATION
    	
31
    
	
7.11.
    	
PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
    	
32
    
	
7.12.
    	
PAYING AGENTS
    	
32
    
	
ARTICLE 8
    	
AMENDMENTS, SUPPLEMENTS AND   WAIVERS
    	
32
    
	
8.1.
    	
WITHOUT CONSENT OF HOLDERS
    	
32
    
	
8.2.
    	
WITH CONSENT OF HOLDERS
    	
33
    
	
8.3.
    	
COMPLIANCE WITH TRUST INDENTURE ACT
    	
34
    
	
8.4.
    	
REVOCATION AND EFFECT OF CONSENTS
    	
34
    
	
8.5.
    	
NOTATION ON OR EXCHANGE OF SECURITIES
    	
35
    
	
8.6.
    	
TRUSTEE TO SIGN AMENDMENTS, ETC.
    	
35
    
	
ARTICLE 9
    	
DISCHARGE OF INDENTURE;   DEFEASANCE
    	
35
    
	
9.1.
    	
DISCHARGE OF INDENTURE
    	
35
    
	
9.2.
    	
LEGAL DEFEASANCE
    	
36
    
	
9.3.
    	
COVENANT DEFEASANCE
    	
36
    
	
9.4.
    	
CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE
    	
37
    
	
9.5.
    	
DEPOSITED MONEY AND U.S. AND FOREIGN GOVERNMENT OBLIGATIONS   TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS
    	
38
    
	
9.6.
    	
REINSTATEMENT
    	
39
    
	
9.7.
    	
MONEYS HELD BY PAYING AGENT
    	
39
    
	
9.8.
    	
MONEYS HELD BY TRUSTEE
    	
39
    
	
ARTICLE 10
    	
MISCELLANEOUS
    	
40
    
	
10.1.
    	
TRUST INDENTURE ACT CONTROLS
    	
40
    
	
10.2.
    	
NOTICES
    	
40
    
	
10.3.
    	
COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS
    	
41
    
	
10.4.
    	
CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
    	
41
    
	
10.5.
    	
STATEMENT REQUIRED IN CERTIFICATE AND OPINION
    	
42
    
	
10.6.
    	
RULES BY TRUSTEE AND AGENTS
    	
42
    
	
10.7.
    	
BUSINESS DAYS; LEGAL HOLIDAYS; PLACE OF PAYMENT
    	
42
    
	
10.8.
    	
GOVERNING LAW
    	
42
    

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
PAGE
    
	
10.9.
    	
NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
    	
43
    
	
10.10.
    	
NO RECOURSE AGAINST OTHERS
    	
43
    
	
10.11.
    	
SUCCESSORS
    	
43
    
	
10.12.
    	
MULTIPLE COUNTERPARTS
    	
43
    
	
10.13.
    	
TABLE OF CONTENTS, HEADINGS, ETC.
    	
43
    
	
10.14.
    	
SEVERABILITY
    	
43
    
	
10.15.
    	
SECURITIES IN A FOREIGN CURRENCY OR IN EUROS
    	
43
    
	
10.16.
    	
JUDGMENT CURRENCY
    	
44
    

 

iv

 

CROSS-REFERENCE TABLE

 

	
TIA SECTION
    	
 
    	
INDENTURE SECTION
    
	
310(a)(1)(2)(5)
    	
 
    	
7.10
    
	
310(a)(3)(4)
    	
 
    	
Inapplicable
    
	
310(b)
    	
 
    	
7.8;   7.10
    
	
310(c)
    	
 
    	
Inapplicable
    
	
 
    	
 
    	
 
    
	
311(a)(b)
    	
 
    	
7.11
    
	
311(c)
    	
 
    	
Inapplicable
    
	
 
    	
 
    	
 
    
	
312(a)
    	
 
    	
2.6
    
	
312(b)(c)
    	
 
    	
10.3
    
	
 
    	
 
    	
 
    
	
313(a)(b)
    	
 
    	
7.6
    
	
313(c)
    	
 
    	
7.6;   10.2
    
	
313(d)
    	
 
    	
7.6
    
	
 
    	
 
    	
 
    
	
314(a)
    	
 
    	
4.2; 4.4; 10.2
    
	
314(b)
    	
 
    	
N/A
    
	
314(c)(1)(2)
    	
 
    	
10.4; 10.5
    
	
314(c)(3)
    	
 
    	
Inapplicable
    
	
314(d)
    	
 
    	
Inapplicable
    
	
314(e)
    	
 
    	
10.5
    
	
314(f)
    	
 
    	
Inapplicable
    
	
 
    	
 
    	
 
    
	
315(a)
    	
 
    	
7.1, 7.2
    
	
315(b)
    	
 
    	
7.5; 10.2
    
	
315(c)
    	
 
    	
7.1
    
	
315(d)
    	
 
    	
7.1; 7.2
    
	
315(e)
    	
 
    	
6.11
    
	
 
    	
 
    	
 
    
	
316(a)(last  sentence)
    	
 
    	
2.10
    
	
316(a)(1)(A)
    	
 
    	
6.5
    
	
316(a)(1)(B)
    	
 
    	
6.4
    
	
316(a)(2)
    	
 
    	
8.2
    
	
316(b)
    	
 
    	
6.7
    
	
316(c)
    	
 
    	
8.4
    
	
 
    	
 
    	
 
    
	
317(a)(1)
    	
 
    	
6.8
    
	
317(a)(2)
    	
 
    	
6.9
    
	
317(b)
    	
 
    	
2.5;   7.12
    
	
 
    	
 
    	
 
    
	
318(a)
    	
 
    	
10.1
    

 

Note:      This Cross-Reference Table shall not, for any purpose, be deemed to be a part of the Indenture.

 

v

 

INDENTURE, dated as of                             ,         , by and between Verastem, Inc., a Delaware corporation, as Issuer (the “Company”) and                                           , a                                  organized under the laws of                                               , as Trustee (the “Trustee”).

 

RECITALS OF THE COMPANY

 

The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its debentures, notes or other evidences of indebtedness to be issued in one or more series (the “Securities”), as herein provided, up to such principal amount as may from time to time be authorized in or pursuant to one or more resolutions of the Board of Directors or by supplemental indenture.

 

All things necessary to make this Indenture a valid agreement of the Company in accordance with its terms have been done, and the execution and delivery thereof have been in all respects duly authorized by the parties hereto.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities of a Series thereof, as follows:

 

ARTICLE 1

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

1.1.                            DEFINITIONS.

 

“Affiliate” of any specified Person means any other Person which, directly or indirectly through one or more intermediaries, controls, or is controlled by or is under common control with, such specified Person.  For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.

 

“Agent” means any Registrar, Paying Agent, co-registrar or agent for service of notices and demands.

 

“Board of Directors” means the Board of Directors of the Company or any committee duly authorized to act therefor.

 

“Board Resolution” means a copy of a resolution certified pursuant to an Officers’ Certificate to have been duly adopted by the Board of Directors of the Company and to be in full force and effect on the date of such certification which has been delivered to the Trustee.

 

 

“Capital Stock” means, with respect to any Person, any and all shares or other equivalents (however designated) of capital stock, partnership interests or any other participation, right or other interest in the nature of an equity interest in such Person or any option, warrant or other security convertible into any of the foregoing.

 

“Company” means the party named as such in the first paragraph of this Indenture until a successor replaces such party pursuant to Article 5 of this Indenture, and thereafter means the successor and any other primary obligor on the Securities.

 

“Company Order” means a written order signed in the name of the Company by two Officers, one of whom must be its Chief Executive Officer or its Chief Operating Officer.

 

“Company Request” means any written request signed in the name of the Company by its Chief Executive Officer, its President, any Vice President, its Chief Operating Officer or its Treasurer and attested to by its Secretary or any Assistant Secretary.

 

“Corporate Trust Office” means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered.

 

“Default” means any event that is, or that with the passing of time or giving of notice or both would be, an Event of Default.

 

“Depository” means, with respect to the Securities of any Series issuable or issued in whole or in part in the form of one or more Global Securities, the Person designated as Depository for such Series by the Company, which Depository shall be a clearing agency registered under the Exchange Act, until a successor Depository shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Depository” shall mean each Person who is then a Depository hereunder, and if at any time there is more than one such Person, such Persons.

 

“Dollars” means the currency of the United States of America.

 

“Euro” means the single currency of participating member states of the economic and monetary union as contemplated in the Treaty on European Union.

 

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

 

“Foreign Currency” means any currency or currency unit issued by a government other than the government of the United States of America.

 

“Foreign Government Obligations” means, with respect to Securities that are denominated in a Foreign Currency, (i) direct obligations of the government that issued or caused to be issued such currency for the payment of which obligations its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by, or acting as an agency or instrumentality of, such government, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by such government, which, in either case under clauses (i) and (ii), are not callable or redeemable at the option of the issuer thereof.

 

2

 

“GAAP” means generally accepted accounting principles consistently applied as in effect in the United States of America from time to time.

 

“Global Security” or “Global Securities” means a Security or Securities, as the case may be, in the form established pursuant to Section 2.2, evidencing all or part of a Series of Securities issued to the Depository for such Series or its nominee, and registered in the name of such Depository or nominee, and bearing the legend set forth in Section 2.15(c) (or such other legend(s) as may be applied to such Securities in accordance with Section 2.2(24)).

 

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

 

“Indebtedness” means (without duplication), with respect to any Person, any indebtedness at any time outstanding, secured or unsecured, contingent or otherwise, which is for borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or only to a portion thereof), or evidenced by bonds, notes, debentures or similar instruments, or representing the balance deferred and unpaid of the purchase price of any property (excluding any balances that constitute accounts payable or trade payables, and other accrued liabilities arising in the ordinary course of business), if and to the extent any of the foregoing indebtedness would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP.

 

“Indenture” means this Indenture as amended, restated or supplemented from time to time.

 

“Interest Payment Date,” when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.

 

“Lien” means, with respect to any property or assets of any Person, any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, security interest, lien, charge, easement, encumbrance, preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever on or with respect to such property or assets (including, without limitation, any capitalized lease obligation, conditional sales or other title retention agreement having substantially the same economic effect as any of the foregoing).

 

“Maturity,” when used with respect to any Security, means the date on which the principal of such Security, or an installment of principal, becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption, notice of option to elect payment or otherwise.

 

“Officer” means the Chief Executive Officer, the President, any Vice President, the Chief Operating Officer, the Treasurer or the Secretary of the Company, or any other officer designated by the Board of Directors, as the case may be.

 

“Officers’ Certificate” means, with respect to any Person, a certificate signed by the Chairman, Chief Executive Officer, President or any Senior or Executive Vice President and the Chief Operating Officer or any Treasurer of such Person, that shall comply with applicable provisions of this Indenture.

 

3

 

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

 

“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government (including any agency or political subdivision thereof).

 

“Redemption Date,” when used with respect to any Security to be redeemed, means the date fixed for such redemption pursuant to this Indenture.

 

“Responsible Officer,” when used with respect to the Trustee, means any officer within the corporate trust department or division of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers, and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

 

“SEC” means the United States Securities and Exchange Commission as constituted from time to time, or any successor performing substantially the same functions.

 

“Securities” means the securities that are issued under this Indenture, as amended or supplemented from time to time pursuant to this Indenture.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Series” or “Series of Securities” means each series of debentures, notes or other debt instruments of the Company created pursuant to Sections 2.1 and 2.2.

 

“Significant Subsidiary” means (i) any direct or indirect Subsidiary of the Company that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the date hereof, or (ii) any group of direct or indirect Subsidiaries of the Company that, taken together as a group, would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the date hereof.

 

“Stated Maturity,” when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security, or such installment of principal or interest, is due and payable, and when used with respect to any other Indebtedness, means the date specified in the instrument governing such Indebtedness as the fixed date on which the principal of such Indebtedness, or any installment of interest thereon, is due and payable.

 

“Subsidiary” of any specified Person means any corporation, limited liability company, partnership, joint venture, association or other business entity, whether now existing or hereafter organized or acquired, (i) in the case of a corporation, of which more than 50% of the total voting power of the Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors thereof is held, directly or indirectly, by such Person or any of

 

4

 

its Subsidiaries; or (ii) in the case of a partnership, joint venture, association or other business entity, with respect to which such Person or any of its Subsidiaries has the power to direct or cause the direction of the management and policies of such entity by contract or otherwise, or if in accordance with GAAP such entity is consolidated with such Person for financial statement purposes.

 

“TIA” means the Trust Indenture Act of 1939 (15 U.S. Code Section 77aaa-77bbbb) as in effect on the date of this Indenture (except as provided in Section 8.3).

 

“Trustee” means the party named as such in this Indenture until a successor replaces it pursuant to this Indenture, and thereafter means the successor, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any Series shall mean the Trustee with respect to Securities of that Series.

 

“U.S. Government Obligations” means direct non-callable obligations of, or non-callable obligations guaranteed by, the United States of America for the payment of which obligation or guarantee the full faith and credit of the United States of America is pledged.

 

1.2.                            OTHER DEFINITIONS.

 

The definitions of the following terms may be found in the sections indicated as follows:

 

	
TERM
    	
 
    	
DEFINED IN SECTION
    
	
“Bankruptcy   Law”
    	
 
    	
6.1
    
	
“Business   Day”
    	
 
    	
10.7
    
	
“Covenant   Defeasance”
    	
 
    	
9.3
    
	
“Custodian”
    	
 
    	
6.1
    
	
“Event   of Default”
    	
 
    	
6.1
    
	
“Journal”
    	
 
    	
10.15
    
	
“Judgment   Currency”
    	
 
    	
10.16
    
	
“Legal   Defeasance”
    	
 
    	
9.2
    
	
“Legal   Holiday”
    	
 
    	
10.7
    
	
“Market   Exchange Rate”
    	
 
    	
10.15
    
	
“New   York Paying Agent”
    	
 
    	
2.4
    
	
“Paying   Agent”
    	
 
    	
2.4
    
	
“Place   of Payment”
    	
 
    	
10.7
    
	
“Registrar”
    	
 
    	
2.4
    

 

5

 

	
TERM
    	
 
    	
DEFINED IN SECTION
    
	
“Required   Currency”
    	
 
    	
10.16
    
	
“Service   Agent”
    	
 
    	
2.4
    

 

1.3.                            INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.

 

Whenever this Indenture refers to a provision of the TIA, the portion of such provision required to be incorporated herein in order for this Indenture to be qualified under the TIA is incorporated by reference in and made a part of this Indenture.  The following TIA terms used in this Indenture have the following meanings:

 

“Commission” means the SEC.

 

“indenture securities” means the Securities.

 

“indenture securityholder” means a Holder or Securityholder.

 

“indenture to be qualified” means this Indenture.

 

“indenture trustee” or “institutional trustee” means the Trustee.

 

“obligor on the indenture securities” means the Company.

 

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

 

1.4.                            RULES OF CONSTRUCTION.

 

Unless the context otherwise requires:

 

(1)           a term has the meaning assigned to it herein, whether defined expressly or by reference;

 

(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 in the plural include the singular;

 

(5)           words used herein implying any gender shall apply to each gender; and

 

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

 

6

 

ARTICLE 2

 

THE SECURITIES

 

2.1.                            ISSUABLE IN SERIES.

 

The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is $[               ].  The Securities may be issued in one or more Series. All Securities of a Series shall be identical except as may be set forth in a Board Resolution, a supplemental indenture or an Officers’ Certificate detailing the adoption of the terms thereof pursuant to the authority granted under a Board Resolution.  In the case of Securities of a Series to be issued from time to time, the Board Resolution, Officers’ Certificate or supplemental indenture may provide for the method by which specified terms (such as interest rate, Stated Maturity, record date or date from which interest shall accrue) are to be determined.  Securities may differ between Series in respect of any matters, PROVIDED, that all Series of Securities shall be equally and ratably entitled to the benefits of the Indenture.

 

2.2.                            ESTABLISHMENT OF TERMS OF SERIES OF SECURITIES.

 

At or prior to the issuance of any Securities within a Series, the following shall be established (as to the Series generally, in the case of Subsection 2.2(1) and either as to such Securities within the Series or as to the Series generally in the case of Subsections 2.2(2) through 2.2(24)) by a Board Resolution, a supplemental indenture or an Officers’ Certificate, in each case, pursuant to authority granted under a Board Resolution:

 

(1)           the title of the Series (which shall distinguish the Securities of that particular Series from the Securities of any other Series);

 

(2)           any limit upon the aggregate principal amount of the Securities of the Series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 8.5);

 

(3)           the price or prices (expressed as a percentage of the principal amount thereof) at which the Securities of the Series will be issued;

 

(4)           the date or dates on which the principal of the Securities of the Series is payable;

 

(5)           the rate or rates (which may be fixed or variable) per annum or, if applicable, the method used to determine such rate or rates (including, but not limited to, any commodity, commodity index, stock exchange index or financial index) at which the Securities of the Series shall bear interest, if any, the date or dates from which such interest, if any, shall accrue, the date or dates on which such interest, if any, shall commence and be payable and any regular record date for the interest payable on any Interest Payment Date;

 

7

 

(6)           the place or places where the principal of, and interest and premium, if any, on, the Securities of the Series shall be payable, or the method of such payment, if by wire transfer, mail or other means;

 

(7)           if applicable, the period or periods within which, the price or prices at which and the terms and conditions upon which the Securities of the Series may be redeemed, in whole or in part, at the option of the Company;

 

(8)           the obligation, if any, of the Company to redeem or purchase the Securities of the Series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof, and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the Series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

 

(9)           the dates, if any, on which and the price or prices at which the Securities of the Series will be repurchased by the Company at the option of the Holders thereof, and other detailed terms and provisions of such repurchase obligations;

 

(10)         if other than denominations of $1,000 and any integral multiple thereof, the denominations in which the Securities of the Series shall be issuable;

 

(11)         the forms of the Securities of the Series in bearer (if to be issued outside of the United States of America) or fully registered form (and, if in fully registered form, whether the Securities will be issuable as Global Securities);

 

(12)         if other than the principal amount thereof, the portion of the principal amount of the Securities of the Series that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 6.2;

 

(13)         the currency of denomination of the Securities of the Series, which may be Dollars or any Foreign Currency, including, but not limited to, the Euro, and, if such currency of denomination is a composite currency other than the Euro, the agency or organization, if any, responsible for overseeing such composite currency;

 

(14)         the designation of the currency, currencies or currency units in which payment of the principal of, and interest and premium, if any, on, the Securities of the Series will be made;

 

(15)         if payments of principal of, or interest or premium, if any, on, the Securities of the Series are to be made in one or more currencies or currency units other than that or those in which such Securities are denominated, the manner in which the exchange rate with respect to such payments will be determined;

 

(16)         the manner in which the amounts of payment of principal of, or interest and premium, if any, on, the Securities of the Series will be determined, if such amounts may be determined by reference to an index based on a currency or currencies or by reference to a commodity, commodity index, stock exchange index or financial index;

 

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(17)         the provisions, if any, relating to any collateral provided for the Securities of the Series;

 

(18)         any addition to or change in the covenants set forth in Articles 4 or 5 that applies to Securities of the Series;

 

(19)         any addition to or change in the Events of Default which applies to any Securities of the Series, and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 6.2;

 

(20)         the terms and conditions, if any, for conversion of the Securities into or exchange of the Securities for shares of common stock or preferred stock of the Company that apply to Securities of the Series;

 

(21)         any depositories, interest rate calculation agents, exchange rate calculation agents or other agents with respect to Securities of such Series if other than those appointed herein;

 

(22)         the terms and conditions, if any, upon which the Securities shall be subordinated in right of payment to other Indebtedness of the Company;

 

(23)         if applicable, that the Securities of the Series, in whole or any specified part, shall be defeasible pursuant to Article 9; and

 

(24)         any other terms of the Securities of the Series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 8.1, but which may modify or delete any provision of this Indenture insofar as it applies to such Series).

 

All Securities of any one Series need not be issued at the same time, and may be issued from time to time, consistent with the terms of this Indenture, if so provided by or pursuant to the Board Resolution, supplemental indenture or Officers’ Certificate referred to above, however, the authorized principal amount of any Series may not be increased to provide for issuances of additional Securities of such Series, unless otherwise provided in such Board Resolution, supplemental indenture or Officers’ Certificate.

 

2.3.                            EXECUTION AND AUTHENTICATION.

 

The Securities shall be executed on behalf of the Company by two Officers of the Company or an Officer and an Assistant Secretary of the Company.  Each such signature may be either manual or facsimile.  The Company’s seal may be impressed, affixed, imprinted or reproduced on the Securities and may be in facsimile form.

 

If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid.

 

A Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.  The signature shall be conclusive evidence that the Security has been authenticated under this Indenture.  The Trustee shall at any time, and from time to time,

 

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authenticate Securities for original issue in the principal amount provided in the Board Resolution, supplemental indenture hereto or Officers’ Certificate, upon receipt by the Trustee of a Company Order.  Such Company Order may authorize authentication and delivery pursuant to oral or electronic instructions from the Company or its duly authorized agent or agents, which oral instructions shall be promptly confirmed in writing.  Each Security shall be dated the date of its authentication.

 

The aggregate principal amount of Securities of any Series outstanding at any time may not exceed any limit upon the maximum principal amount for such Series set forth in the Board Resolution, supplemental indenture hereto or Officers’ Certificate delivered pursuant to Section 2.2, except as provided in Section 2.8.

 

Prior to the issuance of Securities of any Series, the Trustee shall have received and (subject to Section 7.1) shall be fully protected in relying on: (a) the Board Resolution, supplemental indenture hereto or Officers’ Certificate establishing the form of the Securities of that Series or of Securities within that Series and the terms of the Securities of that Series or of Securities within that Series, (b) an Officers’ Certificate complying with Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.

 

The Trustee shall have the right to decline to authenticate and deliver any Securities of any Series: (a) if the Trustee, being advised in writing by outside counsel, determines that such action may not lawfully be taken; or (b) if the Trustee in good faith by its board of directors or trustees, executive committee or a trust committee of directors and/or vice-presidents shall reasonably determine that such action would expose the Trustee to personal liability, or cause it to have a conflict of interest with respect to Holders of any then outstanding Series of Securities.

 

The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities.  An authenticating agent may authenticate Securities whenever the Trustee may do so.  Any appointment shall be evidenced by an instrument signed by an authorized officer of the Trustee, a copy of which shall be furnished to the Company.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company.

 

2.4.                            REGISTRAR AND PAYING AGENT.

 

The Company shall maintain in each Place of Payment for any Series of Securities (i) an office or agency where such Securities may be presented for registration of transfer or for exchange (“Registrar”), (ii) an office or agency where such Securities may be presented for payment (“Paying Agent”) (PROVIDED that the Company shall at all times maintain a Paying Agent in the Borough of Manhattan, City of New York, State of New York (the “New York Paying Agent”), and PROVIDED, FURTHER, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the register for the Securities maintained by the Registrar), and (iii) an office or agency where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served (“Service Agent”).  The Registrar shall keep a register of the Securities and of their transfer and exchange.  The Company may have one or more co-registrars

 

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and one or more additional paying agents.  The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Company shall fail to maintain any such required office, or to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee as set forth in Section 10.2.  If the Company acts as Paying Agent, it shall segregate the money held by it for the payment of principal of, and interest and premium, if any, on, the Securities and hold it as a separate trust fund.  The Company may change any Paying Agent, Registrar, co-registrar or any other Agent without notice to any Securityholder.

 

The Company may also from time to time designate one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes, and may from time to time rescind such designations; PROVIDED, HOWEVER, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any Series for such purposes.  The Company hereby initially designates the Corporate Trust Office of the Trustee as such office of the Company.The Company shall give prompt written notice to the Trustee of such designation or rescission, and of any change in the location of any such other office or agency.

 

The Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture.  The agreement shall implement the provisions of this Indenture that relate to such Agent.  The Company shall notify the Trustee of the name and address of any such Agent.  If the Company fails to maintain a Registrar or Paying Agent, or agent for service of notices and demands, or fails to give the foregoing notice, the Trustee shall act as such.  The Company hereby appoints the Trustee as the initial Registrar, Paying Agent and Service Agent for each Series unless another Registrar, Paying Agent or Service Agent, as the case may be, is appointed prior to the time Securities of that Series are first issued.  The Company designates                                                                   , as the New York Paying Agent, with offices at                                                                          .

 

2.5.                            PAYING AGENT TO HOLD ASSETS IN TRUST.

 

The Trustee as Paying Agent shall, and the Company shall require each Paying Agent other than the Trustee to agree in writing that each Paying Agent shall, hold in trust for the benefit of the Holders of any Series of Securities or the Trustee all assets held by the Paying Agent for the payment of principal of, or interest or premium, if any, on, such Series of Securities (whether such assets have been distributed to it by the Company or any other obligor on such Series of Securities), and the Company and the Paying Agent shall notify the Trustee in writing of any Default by the Company (or any other obligor on such Series of Securities) in making any such payment.  The Company at any time may require a Paying Agent to distribute all assets held by it to the Trustee and account for any assets disbursed, and the Trustee may, at any time during the continuance of any payment default with respect to any Series of Securities, upon written request to a Paying Agent, require such Paying Agent to distribute all assets held by it to the Trustee and to account for any assets distributed.  Upon distribution to the Trustee of all assets that shall have been delivered by the Company to the Paying Agent, the Paying Agent shall have no further liability for such assets.

 

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2.6.                            SECURITYHOLDER LISTS.

 

The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders of each Series of Securities.  If the Trustee is not the Registrar, the Company shall furnish to the Trustee as of each regular record date for the payment of interest on the Securities of a Series and before each related Interest Payment Date, and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders of each Series of Securities.

 

2.7.                            TRANSFER AND EXCHANGE.

 

When Securities of a Series are presented to the Registrar with a request to register the transfer thereof, the Registrar shall register the transfer as requested if the requirements of applicable law are met, and when such Securities of a Series are presented to the Registrar with a request to exchange them for an equal principal amount of other authorized denominations of Securities of the same Series, the Registrar shall make the exchange as requested.  To permit transfers and exchanges, upon surrender of any Security for registration of transfer at the office or agency maintained pursuant to Section 2.4, the Company shall execute and the Trustee shall authenticate Securities at the Registrar’s request.

 

If Securities are issued as Global Securities, the provisions of Section 2.15 shall apply.

 

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

 

Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Registrar or a co-registrar) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar or a co-registrar, duly executed by the Holder thereof or his attorney duly authorized in writing.

 

Any exchange or transfer shall be without charge, except that the Company may require payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation to a transfer or exchange, but this provision shall not apply to any exchange pursuant to Section 2.11, 3.6 or 8.5.  The Trustee shall not be required to register transfers of Securities of any Series, or to exchange Securities of any Series, for a period of 15 days before the record date for selection for redemption of such Securities.  The Trustee shall not be required to exchange or register transfers of Securities of any Series called or being called for redemption in whole or in part, except the unredeemed portion of such Security being redeemed in part.

 

2.8.                            REPLACEMENT SECURITIES.

 

If a mutilated Security is surrendered to the Trustee, or if the Holder of a Security presents evidence to the satisfaction of the Company and the Trustee that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a

 

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replacement Security of the same Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.  An indemnity bond may be required by the Company or the Trustee that is sufficient in the reasonable judgment of the Company or the Trustee, as the case may be, to protect the Company, the Trustee or any Agent from any loss which any of them may suffer if a Security is replaced.  The Company may charge such Holder for the Company’s out-of-pocket expenses in replacing a Security, including the fees and expenses of the Trustee.  Every replacement Security shall constitute an original additional obligation of the Company, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that Series duly issued hereunder.

 

2.9.                            OUTSTANDING SECURITIES.

 

Securities outstanding at any time are all Securities authenticated by the Trustee, except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.9 as not outstanding.

 

If a Security is replaced pursuant to Section 2.8 (other than a mutilated Security surrendered for replacement), it ceases to be outstanding until the Company and the Trustee receive proof satisfactory to each of them that the replaced Security is held by a bona fide purchaser.  A mutilated Security ceases to be outstanding upon surrender of such Security and replacement thereof pursuant to Section 2.8.

 

If a Paying Agent holds on a Redemption Date or the Stated Maturity money sufficient to pay the principal of, premium, if any, and accrued interest on, Securities payable on that date, and is not prohibited from paying such money to the Holders thereof pursuant to the terms of this Indenture (PROVIDED, that if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made), then on and after that date such Securities cease to be outstanding and interest on them ceases to accrue.

 

A Security does not cease to be outstanding solely because the Company or an Affiliate holds the Security.

 

2.10.                     WHEN TREASURY SECURITIES DISREGARDED; DETERMINATION OF HOLDERS’ ACTION.

 

In determining whether the Holders of the required aggregate principal amount of the Securities of any Series have concurred in any direction, waiver or consent, the Securities of any Series owned by the Company or any other obligor on such Securities, or by any Affiliate of any of them, shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities of such Series which the Trustee actually knows are so owned shall be so disregarded.  Securities of such Series 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 so to act with respect to the Securities of such Series and that the pledgee is not the Company or any other obligor on the Securities of such Series, or an Affiliate of any of them.

 

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2.11.                     TEMPORARY SECURITIES.

 

Until definitive Securities are ready for delivery, the Company may prepare and execute, and the Trustee shall authenticate, temporary Securities.  Temporary Securities shall be substantially in the form, and shall carry all rights, of definitive Securities, but may have variations that the Company considers appropriate for temporary Securities.  Without unreasonable delay, the Company shall prepare and execute, and the Trustee shall authenticate, definitive Securities in exchange for temporary Securities without charge to the Holder.

 

2.12.                     CANCELLATION.

 

All Securities surrendered for payment, redemption or registration of transfer or exchange, or for credit against any sinking fund payment, shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee for cancellation.  The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold.  The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for transfer, exchange or payment.  The Trustee or, at the direction of the Trustee, the Registrar or the Paying Agent, and no one else, shall cancel, and at the written request of the Company shall dispose of, all Securities surrendered for transfer, exchange, payment or cancellation.  If the Company shall acquire any of the Securities, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Securities unless and until the same are surrendered to the Trustee for cancellation pursuant to this Section 2.12.  No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section 2.12, except as expressly permitted by this Indenture.

 

2.13.                     PAYMENT OF INTEREST; DEFAULTED INTEREST; COMPUTATION OF INTEREST.

 

Except as otherwise provided as contemplated by Section 2.2 with respect to any Series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security is registered at the close of business on the regular record date for such interest, as provided in the Board Resolution, supplemental indenture hereto or Officers’ Certificate establishing the terms of such Series.

 

If the Company defaults in a payment of interest on the Securities, it shall pay the defaulted amounts, plus any interest payable on defaulted amounts pursuant to Section 4.1, to the Persons who are Securityholders on a subsequent special record date, which date shall be the 15th day next preceding the date fixed by the Company for the payment of defaulted interest, or the next succeeding Business Day if such date is not a Business Day. At least 15 days before the special record date, the Company shall mail or cause to be mailed to each Securityholder, with a copy to the Trustee, a notice that states the special record date, the payment date and the amount of defaulted interest, and interest payable on such defaulted interest, if any, to be paid.

 

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Except as otherwise specified as contemplated by Section 2.2 for Securities of any Series, interest on the Securities of each Series shall be computed on the basis of a 360-day year of twelve 30-day months.

 

2.14.                     CUSIP NUMBER.

 

The Company in issuing the Securities may use one or more “CUSIP” numbers, and, if the Company does so, the Trustee shall use the CUSIP number(s) in notices of redemption or exchange as a convenience to Holders, PROVIDED, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP number(s) printed in the notice or on the Securities, and that reliance may be placed only on the other identification numbers printed on the Securities, and that any such redemption or exchange shall not be affected by any defect in or omission of any such numbers.

 

2.15.                     PROVISIONS FOR GLOBAL SECURITIES.

 

(a)                                 A Board Resolution, a supplemental indenture hereto or an Officers’ Certificate shall establish whether the Securities of a Series shall be issued in whole or in part in the form of one or more Global Securities, and the Depository for such Global Securities or Securities.

 

(b)                                 Notwithstanding any provisions to the contrary contained in Section 2.7 and in addition thereto, if, and only if the Depository (i) at any time is unwilling or unable to continue as Depository for such Global Security or ceases to be a clearing agency registered under the Exchange Act and (ii) a successor Depository is not appointed by the Company within 90 days after the date the Company is so informed in writing or becomes aware of the same, the Company promptly will execute and deliver to the Trustee definitive Securities, and the Trustee, upon receipt of a Company Request for the authentication and delivery of such definitive Securities (which the Company will promptly execute and deliver to the Trustee) and an Officers’ Certificate to the effect that such Global Security shall be so exchangeable, will authenticate and deliver definitive Securities, without charge, registered in such names and in such authorized denominations as the Depository shall direct in writing (pursuant to instructions from its direct and indirect participants or otherwise) in an aggregate principal amount equal to the principal amount of the Global Security with like tenor and terms.  Upon the exchange of a Global Security for definitive Securities, such Global Security shall be canceled by the Trustee.  Unless and until it is exchanged in whole or in part for definitive Securities, as provided in this Section 2.15(b), a Global Security may not be transferred except as a whole by the Depository with respect to such Global Security to a nominee of such Depository, by a nominee of such Depository to such Depository or another nominee of such Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor Depository.

 

(c)                                  Any Global Security issued hereunder shall bear a legend in substantially the following form:

 

“This Security is a Global Security within the meaning of the Indenture hereinafter referred to, and is registered in the name of the Depository or a nominee of the Depository.  This Security is exchangeable for Securities registered in the name of a Person

 

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other than the Depository or its nominee only in the limited circumstances described in the Indenture, and may not be transferred except as a whole by the Depository to a nominee of the Depository, by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor Depository.”

 

(d)                                 The Depository, as a Holder, may appoint agents and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under the Indenture.

 

(e)                                  Notwithstanding the other provisions of this Indenture, unless otherwise specified as contemplated by Section 2.2, payment of the principal of, and interest and premium, if any, on, any Global Security shall be made to the Depository or its nominee in its capacity as the Holder thereof.

 

(f)                                   Except as provided in Section 2.15(e) above, the Company, the Trustee and any Agent shall treat a Person as the Holder of such principal amount of outstanding Securities of any Series represented by a Global Security as shall be specified in a written statement of the Depository (which may be in the form of a participants’ list for such Series) with respect to such Global Security, for purposes of obtaining any consents, declarations, waivers or directions required to be given by the Holders pursuant to this Indenture, PROVIDED, that until the Trustee is so provided with a written statement, it may treat the Depository or any other Person in whose name a Global Security is registered as the owner of such Global Security for the purpose of receiving payment of the principal of, and any premium and (subject to Section 2.13) any interest on, such Global Security and for all other purposes whatsoever, and none of the Company, the Trustee or any agent of the Company or the Trustee shall be affected by notice to the contrary.

 

2.16.                     PERSONS DEEMED OWNERS.

 

Prior to due presentment of a Security for registration of transfer, the Company, the Trustee, the Registrar and any agent of the Company, the Registrar or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of the principal of, and any premium and (subject to Section 2.13) any interest on, such Security and for all other purposes whatsoever, and none of the Company, the Trustee, the Registrar or any agent of the Company, the Trustee or the Registrar shall be affected by notice to the contrary.

 

ARTICLE 3

 

REDEMPTION

 

3.1.                            NOTICES TO TRUSTEE.

 

The Company may, with respect to any Series of Securities, reserve the right to redeem and pay the Series of Securities, or may covenant to redeem and pay the Series of Securities or

 

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any part thereof, prior to the Stated Maturity thereof at such time and on such terms as provided for in such Securities or the related Board Resolution, supplemental indenture or Officers’ Certificate.  If a Series of Securities is redeemable and the Company elects to redeem all or part of such Series of Securities, it shall notify the Trustee of the Redemption Date and the principal amount of Securities to be redeemed at least 45 days (unless a shorter notice shall be satisfactory to the Trustee) before the Redemption Date.  Any such notice may be canceled at any time prior to notice of such redemption being mailed to any Holder, and shall thereby be void and of no effect.

 

3.2.                            SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.

 

Unless otherwise indicated for a particular Series of Securities by a Board Resolution, a supplemental indenture or an Officers’ Certificate, if fewer than all of the Securities of a Series are to be redeemed, the Trustee shall select the Securities of a Series to be redeemed pro rata, by lot or by any other method that the Trustee considers fair and appropriate (unless the Company specifically directs the Trustee otherwise) and, if such Securities are listed on any securities exchange, by a method that complies with the requirements of such exchange.

 

The Trustee shall make the selection from Securities of a Series outstanding and not previously called for redemption, and shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Security selected for partial redemption, the principal amount thereof to be redeemed at least 35 but not more than 60 days before the Redemption Date.  Securities of a Series in denominations of $1,000 may be redeemed only in whole.  The Trustee may select for redemption portions of the principal of Securities of a Series that have denominations larger than $1,000.  Securities of a Series and portions of them it selects shall be in amounts of $1,000 or, with respect to Securities of any Series issuable in other denominations pursuant to Section 2.2(10), the minimum principal denomination for each Series and integral multiples thereof.  Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption.

 

3.3.                            NOTICE OF REDEMPTION.

 

Unless otherwise indicated for a particular Series by Board Resolution, a supplemental indenture hereto or an Officers’ Certificate, at least 30 days, and no more than 60 days, before a Redemption Date, the Company shall mail, or cause to be mailed, a notice of redemption by first-class mail to each Holder of Securities to be redeemed at his or her last address as the same appears on the registry books maintained by the Registrar.  The notice shall identify the Securities to be redeemed and shall state:

 

(1)                                 the Redemption Date;

 

(2)                                 the redemption price, and that such redemption price shall become due and payable on the Redemption Date;

 

(3)                                 if any Security of a Series is being redeemed in part, the portion of the principal amount of such Security of a Series to be redeemed and that, after the Redemption

 

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Date and upon surrender of such Security of a Series, a new Security or Securities in principal amount equal to the unredeemed portion will be issued;

 

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

 

(5)                                 that Securities of a Series called for redemption must be surrendered to the Paying Agent to collect the redemption price, and the place or places where each such Security is to be surrendered for such payment;

 

(6)                                 that, unless the Company defaults in making the redemption payment, interest on the Securities of a Series called for redemption ceases to accrue on the Redemption Date, and the only remaining right of the Holders of such Securities is to receive payment of the redemption price upon surrender to the Paying Agent of the Securities redeemed;

 

(7)                                 if fewer than all of the Securities of a Series are to be redeemed, the identification of the particular Securities of a Series (or portion thereof) to be redeemed, as well as the aggregate principal amount of Securities of a Series to be redeemed and the aggregate principal amount of Securities of a Series to be outstanding after such partial redemption.

 

(8)                                 the CUSIP number, if any, printed on the Securities being redeemed; and

 

(9)                                 that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Securities.

 

At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at the Company’s sole expense.

 

3.4.                            EFFECT OF NOTICE OF REDEMPTION.

 

Once the notice of redemption described in Section 3.3 is mailed, Securities of a Series called for redemption become due and payable on the Redemption Date and at the redemption price, plus interest, if any, accrued to the Redemption Date.  Upon surrender to the Trustee or Paying Agent, such Securities of a Series shall be paid at the redemption price, plus accrued interest, if any, to the Redemption Date; PROVIDED, that if the Redemption Date is after a regular interest payment record date and on or prior to the next Interest Payment Date, the accrued interest shall be payable to the Holder of the redeemed Securities registered on the relevant record date, as specified by the Company in the notice to the Trustee pursuant to Section 3.1.

 

3.5.                            DEPOSIT OF REDEMPTION PRICE.

 

On or prior to the Redemption Date (but no later than 11:00 A.M. Eastern Time on such date), the Company shall deposit with the Paying Agent money sufficient to pay the redemption price of and accrued interest, if any, on all Securities to be redeemed on that date other than Securities or portions thereof called for redemption on that date which have been delivered by the Company to the Trustee for cancellation.

 

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On and after any Redemption Date, if money sufficient to pay the redemption price of, and accrued interest on, Securities called for redemption shall have been made available in accordance with the preceding paragraph and the Company and the Paying Agent are not prohibited from paying such moneys to Holders, the Securities called for redemption will cease to accrue interest and the only right of the Holders of such Securities will be to receive payment of the redemption price of and, subject to the proviso in Section 3.4, accrued and unpaid interest on such Securities to the Redemption Date.  If any Security called for redemption shall not be so paid, interest will be paid, from the Redemption Date until such redemption payment is made, on the unpaid principal of the Security and any interest or premium, if any, not paid on such unpaid principal, in each case, at the rate and in the manner provided in the Securities.

 

3.6.                           SECURITIES REDEEMED IN PART.

 

Upon surrender of a Security of a Series that is redeemed in part, the Company shall execute, and the Trustee shall authenticate, for a Holder a new Security of the same Series equal in principal amount to the unredeemed portion of the Security surrendered.

 

ARTICLE 4

 

COVENANTS

 

4.1.                            PAYMENT OF SECURITIES.

 

The Company shall pay the principal of, and interest and premium, if any, on, each Series of Securities on the dates and in the manner provided in such Securities and this Indenture.

 

An installment of principal or interest shall be considered paid on the date it is due if the Trustee or Paying Agent holds on that date money designated for and sufficient to pay such installment and is not prohibited from paying such money to the Holders pursuant to the terms of this Indenture or otherwise.

 

The Company shall pay interest on overdue principal, and overdue interest, to the extent lawful, at the rate specified in the Series of Securities.

 

4.2.                            SEC REPORTS.

 

The Company will deliver to the Trustee within 15 days after the filing of the same with the SEC, copies of the quarterly and annual reports and of the information, documents and other reports, if any, which the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act; PROVIDED, HOWEVER, that each such report or document will be deemed to be so delivered to the Trustee if the Company files such report or document with the SEC through the SEC’s EDGAR database no later than the time such report or document is required to be filed with the SEC pursuant to the Exchange Act.  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 file with the SEC, to the extent permitted, and provide the Trustee with, such quarterly and annual reports and such information, documents and other reports specified in Sections 13 and 15(d) of the Exchange Act.  The Company will also comply with the other provisions of TIA Section 314(a).

 

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4.3.                            WAIVER OF STAY, EXTENSION OR USURY LAWS.

 

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

 

4.4.                            COMPLIANCE CERTIFICATE.

 

(a)                                 The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, an Officers’ Certificate which complies with TIA Section 314(a)(4) stating that a review of the activities of the Company and its Subsidiaries during such fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and that there is no default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of, or interest or premium, if any, on, the Securities is prohibited, or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto.

 

(b)                                 (i) If any Default or Event of Default has occurred and is continuing or (ii) if any Holder seeks to exercise any remedy hereunder with respect to a claimed Default under this Indenture or the Securities, within five Business Days after the Company becoming aware of such occurrence the Company shall deliver to the Trustee an Officers’ Certificate specifying such event, notice or other action and what action the Company is taking or proposes to take with respect thereto.

 

4.5.                            CORPORATE EXISTENCE.

 

Subject to Article 5, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, in accordance with the organizational documents (as the same may be amended from time to time) of the Company and the rights (charter and statutory), licenses and franchises of the Company; PROVIDED, HOWEVER, that the Company shall not be required to preserve any such right, license or franchise, or its corporate existence, if the Board of Directors shall determine that the

 

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preservation thereof is no longer desirable in the conduct of the business of the Company and that the loss thereof is not adverse in any material respect to the Holders.

 

ARTICLE 5

 

SUCCESSOR CORPORATION

 

5.1.                            LIMITATION ON CONSOLIDATION, MERGER AND SALE OF ASSETS.

 

(a)                                 The Company will not, in any transaction or series of transactions, merge or consolidate with or into, or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of its properties and assets (as an entirety or substantially as an entirety in one transaction or a series of related transactions), to any Person or Persons, unless at the time of and after giving effect thereto (i) either (A) if the transaction or series of transactions is a merger or consolidation, the Company shall be the surviving Person of such merger or consolidation, or (B) the Person formed by such consolidation or into which the Company is merged or to which the properties and assets of the Company are transferred (any such surviving Person or transferee Person being the “Surviving Entity”) shall be a corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia, or a corporation or comparable legal entity organized under the laws of a foreign jurisdiction and shall expressly assume by a supplemental indenture executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all of the obligations of the Company (including, without limitation, the obligation to pay the principal of, and premium and interest, if any, on, the Securities and the performance of the other covenants) under the Securities of each Series and this Indenture, and in each case, this Indenture shall remain in full force and effect; and (ii) immediately before and immediately after giving effect to such transaction or series of transactions on a pro forma basis (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), no Default or Event of Default shall have occurred and be continuing.

 

(b)                                 In connection with any consolidation, merger or transfer of assets contemplated by this Section 5.1, the Company shall deliver, or cause to be delivered, to the Trustee, in form and substance reasonably satisfactory to the Trustee, an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer, and the supplemental indenture in respect thereto, comply with this Section 5.1, and that all conditions precedent herein provided for relating to such transaction or transactions have been complied with.

 

5.2.                            SUCCESSOR PERSON SUBSTITUTED.

 

Upon any consolidation, merger or transfer of all or substantially all of the assets of the Company in accordance with Section 5.1 above, the successor corporation formed by such consolidation, or into which the Company is merged or to which such transfer is made, shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor corporation had been named as the Company herein, and thereafter (except with respect to any such transfer which is a lease) the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

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ARTICLE 6

 

DEFAULTS AND REMEDIES

 

6.1.                            EVENTS OF DEFAULT.

 

“Events of Default,” wherever used herein with respect to Securities of any Series, means any one of the following events, unless in the establishing Board Resolution, supplemental indenture or Officers’ Certificate, it is provided that such Series shall not have the benefit of said Event of Default:

 

(1)                                 there is a default in the payment of any principal of, or premium, if any, on, the Securities when the same becomes due and payable at Maturity, upon acceleration, redemption or otherwise;

 

(2)                                 there is a default in the payment of any interest on any Security of a Series when the same becomes due and payable, and the Default continues for a period of 30 days;

 

(3)                                 the Company defaults in the observance or performance of any other covenant in the Securities of a Series or in this Indenture for 60 days after written notice from the Trustee or the Holders of not less than 25% in the aggregate principal amount of the Securities of such Series then outstanding, which notice must specify the Default, demand that it be remedied and state that the notice is a “Notice of Default”;

 

(4)                                 the Company or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

 

(A)                               commences a voluntary case,

 

(B)                               consents to the entry of an order for relief against it in an involuntary case,

 

(C)                               consents to the appointment of a Custodian of it or for all or substantially all of its property,

 

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

 

(E)                                generally is not paying its debts as they become due;

 

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

 

(A)                               is for relief against the Company or any Significant Subsidiary in an involuntary case;

 

(B)                               appoints a Custodian of the Company or any Significant Subsidiary, or for all or substantially all of the property of the Company or any Significant Subsidiary; or

 

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(C)                               orders the liquidation of the Company or any Significant Subsidiary, and the order or decree remains unstayed and in effect for 90 consecutive days; or

 

(6)                                 any other Event of Default provided with respect to Securities of that Series, which is specified in a Board Resolution, a supplemental indenture hereto or an Officers’ Certificate, in accordance with Section 2.2(19).

 

The term “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.  The term “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

The Trustee may withhold notice of any Default (except in the payment of the principal of, or interest or premium, if any, on, the Securities) to the Holders of the Securities of any Series in accordance with Section 7.5.  When a Default is cured, it ceases to exist.

 

6.2.                            ACCELERATION.

 

If an Event of Default with respect to Securities of any Series at the time outstanding (other than an Event of Default arising under Section 6.1(4) or (5)) occurs and is continuing, the Trustee by written notice to the Company, or the Holders of not less than 25% in aggregate principal amount of the Securities of that Series then outstanding by written notice to the Company and the Trustee, may declare that the entire principal amount of all the Securities of that Series then outstanding plus accrued and unpaid interest to the date of acceleration are immediately due and payable, in which case such amounts shall become immediately due and payable; PROVIDED, HOWEVER, that after such acceleration but before a judgment or decree based on such acceleration is obtained by the Trustee, the Holders of a majority in aggregate principal amount of the outstanding Securities of that Series may rescind and annul such acceleration and its consequences if (i) all existing Events of Default, other than the nonpayment of accelerated principal, interest or premium, if any, that has become due solely because of the acceleration, have been cured or waived, (ii) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid and (iii) the rescission would not conflict with any judgment or decree.  No such rescission shall affect any subsequent Default or impair any right consequent thereto.  In case an Event of Default specified in Section 6.1(4) or (5) with respect to the Company occurs, such principal, premium, if any, and interest amount with respect to all of the Securities of that Series shall be due and payable immediately without any declaration or other act on the part of the Trustee or the Holders of the Securities of that Series.

 

6.3.                            REMEDIES.

 

If an Event of Default with respect to Securities of any Series at the time outstanding occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of the principal of, or interest and premium, if any, on, the Securities of that Series, or to enforce the performance of any provision of the Securities of that Series or this Indenture.

 

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The Trustee may maintain a proceeding even if it does not possess any of the Securities of that Series or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default.  No remedy is exclusive of any other remedy.  All available remedies are cumulative to the extent permitted by law.

 

6.4.                            WAIVER OF PAST DEFAULTS AND EVENTS OF DEFAULT.

 

Subject to Sections 6.2, 6.7 and 8.2, the Holders of a majority in principal amount of the Securities of any Series then outstanding have the right to waive any existing Default or Event of Default with respect to such Series or compliance with any provision of this Indenture (with respect to such Series) or the Securities of such Series.  Upon any such waiver, such Default with respect to such Series shall cease to exist, and any Event of Default with respect to such Series arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.  This Section 6.4 shall be in lieu of TIA Section 316(a)(1)(B), and TIA Section 316(a)(1)(B) is hereby expressly excluded from this Indenture and Section as permitted by the TIA.

 

6.5.                            CONTROL BY MAJORITY.

 

Subject to Sections 6.2, 6.7 and 8.2, the Holders of a majority in principal amount of the Securities of any Series then outstanding may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee by this Indenture with respect to such Series.  The Trustee, however, may refuse to follow any direction that conflicts with law or this Indenture, or that the Trustee determines may be unduly prejudicial to the rights of another Securityholder, or that may involve the Trustee in personal liability; PROVIDED, that the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.  This Section 6.5 shall be in lieu of TIA Section 316(a)(1)(A), and TIA Section 316(a)(1)(A) is hereby expressly excluded from this Indenture and Section as permitted by the TIA.

 

6.6.                            LIMITATION ON SUITS.

 

Subject to Section 6.7, a Securityholder may not institute any proceeding or pursue any remedy with respect to this Indenture or the Securities of a Series unless:

 

(1)                                 the Holder gives to the Trustee written notice of a continuing Event of Default with respect to the Securities of that Series;

 

(2)                                 the Holders of at least 25% in aggregate principal amount of the Securities of such Series then outstanding make a written request to the Trustee to pursue the remedy;

 

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

 

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(4)                                 the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and

 

(5)                                 no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in aggregate principal amount of the Securities of such Series then outstanding.

 

A Securityholder may not use this Indenture to prejudice the rights of another Securityholder, or to obtain a preference or priority over another Securityholder.

 

6.7.                            RIGHTS OF HOLDERS TO RECEIVE PAYMENT.

 

Notwithstanding any other provision of this Indenture, the right of any Holder of a Security of a Series to receive payment of the principal of, and interest and premium, if any, on, the Security of such Series on or after the respective due dates expressed in the Security of such Series, or to bring suit for the enforcement of any such payment on or after such respective dates, is absolute and unconditional, and shall not be impaired or affected without the consent of the Holder.

 

6.8.                           COLLECTION SUIT BY TRUSTEE.

 

If an Event of Default in payment of principal, interest or premium, if any, specified in Section 6.1(1) or (2) with respect to Securities of any Series at the time outstanding occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company (or any other obligor on the Securities of that Series) for the whole amount of unpaid principal and premium, if any, and accrued interest remaining unpaid, together with interest on overdue principal and premium, if any, and, to the extent that payment of such interest is lawful, interest on overdue installments of interest, in each case at the rate then borne by the Securities of that Series, and such further amounts as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, as set forth in Section 7.7.

 

6.9.                            TRUSTEE MAY FILE PROOFS OF CLAIM.

 

The Trustee may file such proofs of claim and other papers or documents, and take other actions (including sitting on a committee of creditors), as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Securityholders allowed in any judicial proceedings relative to the Company (or any other obligor on the Securities), any of their respective creditors or any of their respective property, and the Trustee shall be entitled and empowered to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same after deduction of its charges and expenses to the extent that any such charges and expenses are not paid out of the estate in any such proceedings, and any custodian in any such judicial proceeding is hereby authorized by each Securityholder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Securityholders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements

 

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and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7.

 

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

 

6.10.                     PRIORITIES.

 

If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in the following order:

 

FIRST:  to the Trustee for amounts due under Section 7.7;

 

SECOND:  to Securityholders for amounts then due and unpaid for the principal of, and interest and premium, if any, on, the Securities in respect of which, or for the benefit of which, such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities; for principal and any premium and interest, respectively; and

 

THIRD:  to the Company.

 

The Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section 6.10.  At least 15 days before such record date, the Trustee shall mail to each Securityholder a notice that states the record date, the payment date and amount to be paid.

 

6.11.                     UNDERTAKING FOR COSTS.

 

In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in principal amount of the Securities of a Series then outstanding.

 

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ARTICLE 7

 

TRUSTEE

 

7.1.                            DUTIES OF TRUSTEE.

 

(a)                                 If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the same circumstances in the conduct of his own affairs.

 

(b)                                 Except during the continuance of an Event of Default:

 

(1)                                 The Trustee need perform only those duties that are specifically set forth in this Indenture, and no covenants or obligations shall be implied in this Indenture against the Trustee.

 

(2)                                 In the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture, but, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture.

 

(c)                                  The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

 

(1)                                 This paragraph does not limit the effect of paragraph (b) of this Section 7.1.

 

(2)                                 The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts.

 

(3)                                 The Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Sections 6.2 and 6.5.

 

(d)                                 No provision of this Indenture shall require the Trustee to expend or risk its own funds, or otherwise incur any financial liability, in the performance of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risk or liability is not reasonably assured to it.

 

(e)                                  Whether or not therein expressly so provided, paragraphs (a), (b), (c) and (d) of this Section 7.1 shall govern every provision of this Indenture that in any way relates to the Trustee.

 

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(f)                                   The Trustee and Paying Agent shall not be liable for interest on any money received by either of them, except as the Trustee and Paying Agent may agree in writing with the Company.  Money held in trust by the Trustee need not be segregated from other funds except to the extent required by the law.

 

(g)                                  The Paying Agent, the Registrar and any authenticating agent shall be entitled to the protections, immunities and standard of care set forth in paragraphs (a), (b), (c), (d) and (f) of this Section 7.1 and in Section 7.2 with respect to the Trustee.

 

7.2.                            RIGHTS OF TRUSTEE.

 

(a)                                 Subject to Section 7.1:

 

(1)                                 The Trustee may rely on, and shall be protected in acting or refraining from acting upon, any document reasonably believed by it to be genuine and to have been signed or presented by the proper Person.  The Trustee need not investigate any fact or matter stated in the document.

 

(2)                                 Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel, or both, which shall conform to the provisions of Section 10.5.  The Trustee shall be protected and shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion.

 

(3)                                 The Trustee may act through agents and attorneys, and shall not be responsible for the misconduct or negligence of any agent appointed by it with due care.

 

(4)                                 The Trustee shall not be liable for any action it takes or omits to take in good faith which it reasonably believes to be authorized or within its rights or powers.

 

(5)                                 The Trustee may consult with counsel reasonably acceptable to the Trustee, which may be counsel to the Company, and the advice or opinion of such counsel as to matters of law shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

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

 

(7)                                 The Trustee shall not be deemed to have knowledge of any fact or matter (including, without limitation, a Default or Event of Default) unless such fact or matter is known to a Responsible Officer of the Trustee.

 

(8)                                 Unless otherwise expressly provided herein or in the Securities of a Series or the related Board Resolution, supplemental indenture or Officers’ Certificate, the Trustee shall not have any responsibility with respect to reports, notices, certificates or other documents

 

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filed with it hereunder, except to make them available for inspection, at reasonable times, by Securityholders, it being understood that delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (except as set forth in Section 4.4).

 

7.3.                            INDIVIDUAL RIGHTS OF TRUSTEE.

 

The Trustee in its individual or any other capacity may become the owner or pledgee of Securities, and may make loans to, accept deposits from, perform services for or otherwise deal with the Company, or any Affiliate thereof, with the same rights it would have if it were not Trustee.  Any Agent may do the same with like rights.  The Trustee, however, shall be subject to Sections 7.10 and 7.11.

 

7.4.                            TRUSTEE’S DISCLAIMER.

 

The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities (except that the Trustee represents that it is duly authorized to execute and deliver this Indenture and authenticate the Securities and perform its obligations hereunder), and the Trustee shall not be accountable for the Company’s use of the proceeds from the sale of Securities or any money paid to the Company pursuant to the terms of this Indenture, and the Trustee shall not be responsible for any statement in the Securities other than its certificates of authentication.

 

7.5.                            NOTICE OF DEFAULT.

 

If a Default or an Event of Default occurs and is continuing with respect to the Securities of any Series, and if it is known to the Trustee, the Trustee shall mail to each Securityholder of the Securities of that Series notice of the Default or the Event of Default, as the case may be, within 90 days after it occurs or, if later, after a Responsible Officer of the Trustee has knowledge of such Default or Event of Default (except if such Default or Event of Default has been validly cured or waived before the giving of such notice).  Except in the case of a Default or an Event of Default in payment of the principal of, or interest or premium, if any, on, any Security of any Series, the Trustee may withhold the notice if and so long as the Board of Directors of the Trustee, the executive committee or any trust committee of such board and/or its Responsible Officers in good faith determine(s) that withholding the notice is in the interests of the Securityholders of that Series.

 

7.6.                            REPORTS BY TRUSTEE TO HOLDERS.

 

If and to the extent required by the TIA, within 60 days after April 1 of each year, commencing the April 1 following the date of this Indenture, the Trustee shall mail to each Securityholder a brief report dated as of such April 1 that complies with TIA Section 313(a).  The Trustee also shall comply with TIA Sections 313(b) and 313(c).

 

A copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and any stock exchange on which the Securities of that Series are listed.  The Company

 

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shall promptly notify the Trustee when the Securities of any Series are listed on any stock exchange or any delisting thereof, and the Trustee shall comply with TIA Section 313(d).

 

7.7.                            COMPENSATION AND INDEMNITY.

 

The Company shall pay to the Trustee from time to time reasonable compensation for its services.  The Trustee’s compensation shall not be limited by any provision of law on compensation of a trustee of an express trust.  The Company shall reimburse the Trustee within 45 days after receipt of request for all reasonable out-of-pocket disbursements and expenses incurred or made by it in connection with its duties under this Indenture, including the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

The Company shall indemnify the Trustee for, and hold it harmless against, any and all loss or liability incurred by it in connection with the acceptance or performance of its duties under this Indenture including the reasonable costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder.  The Trustee shall notify the Company promptly of any claim asserted against the Trustee for which it may seek indemnity.

 

The failure by the Trustee to so notify the Company shall not however relieve the Company of its obligations.  Notwithstanding the foregoing, the Company need not reimburse the Trustee for any expense or indemnify it against any loss or liability incurred by the Trustee through its negligence or bad faith.  To secure the payment obligations of the Company in this Section 7.7, the Trustee shall have a lien prior to the Securities of any Series on all money or property held or collected by the Trustee except such money or property held in trust to pay the principal of, interest and premium, if any, on particular Securities of that Series.

 

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.1(4) or (5) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law.

 

For purposes of this Section 7.7, the term “Trustee” shall include any trustee appointed pursuant to this Article 7.

 

7.8.                            REPLACEMENT OF TRUSTEE.

 

The Trustee may resign with respect to the Securities of one or more Series by so notifying the Company in writing at least 90 days in advance of such resignation.

 

The Holders of a majority in principal amount of the outstanding Securities of any Series may remove the Trustee with respect to that Series by notifying the removed Trustee in writing and may appoint a successor Trustee with respect to that Series with the consent of the Company, which consent shall not be unreasonably withheld.  The Company may remove the Trustee with respect to that Series at its election if:

 

(1)                                 the Trustee fails to comply with, or ceases to be eligible under, Section 7.10;

 

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(2)                                 the Trustee is adjudged a bankrupt or an insolvent, or an order for relief is entered with respect to the Trustee, under any Bankruptcy Law;

 

(3)                                 a Custodian or other public officer takes charge of the Trustee or its property; or

 

(4)                                 the Trustee otherwise becomes incapable of acting.

 

If the Trustee resigns or is removed, or if a vacancy exists in the office of Trustee, with respect to any Series of Securities for any reason, the Company shall promptly appoint, by Board Resolution, a successor Trustee.

 

If a successor Trustee with respect to the Securities of one or more Series does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in principal amount of the outstanding Securities of the applicable Series may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

If the Trustee with respect to the Securities of one or more Series fails to comply with Section 7.10, any Securityholder of the applicable Series may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company.  Immediately following such delivery, (i) the retiring Trustee with respect to one or more Series shall, subject to its rights under Section 7.7, transfer all property held by it as Trustee with respect to such Series to the successor Trustee, (ii) the resignation or removal of the retiring Trustee shall become effective and (iii) the successor Trustee with respect to such Series shall have all the rights, powers and duties of the Trustee under this Indenture.  A successor Trustee with respect to the Securities of one or more Series shall mail notice of its succession to each Securityholder of such Series.

 

7.9.                            SUCCESSOR TRUSTEE BY CONSOLIDATION, MERGER OR CONVERSION.

 

If the Trustee, or any Agent, consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust assets to, another corporation, subject to Section 7.10, the successor corporation without any further act shall be the successor Trustee or Agent, as the case may be.

 

7.10.                     ELIGIBILITY; DISQUALIFICATION.

 

This Indenture shall always have a Trustee who satisfies the requirements of TIA Sections 310(a)(1), (2) and (5) in every respect.  The Trustee (or in the case of a Trustee that is a Person included in a bank holding company system, the related bank holding company) shall have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition.  The Trustee shall comply with TIA Section 310(b), including the provision in Section 310(b)(1).  In addition, if the Trustee is a Person included in a bank holding company system, the Trustee, independently of such bank holding company, shall meet the capital requirements of TIA Section 310(a)(2).  If at any time the Trustee shall cease to

 

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be eligible in accordance with the provisions of this Section 7.10, it shall resign immediately in the manner and with the effect specified in this Article 7.

 

7.11.                     PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

 

The Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b).  A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein.

 

7.12.                     PAYING AGENTS.

 

The Company shall cause each Paying Agent other than the Trustee to execute and deliver to it and the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 7.12:

 

(1)                                 that it will hold all sums held by it as agent for the payment of the principal of, or interest or premium, if any, on, the Securities (whether such sums have been paid to it by the Company or by any obligor on the Securities) in trust for the benefit of Holders of the Securities or the Trustee;

 

(2)                                 that it will at any time during the continuance of any Event of Default, upon written request from the Trustee, deliver to the Trustee all sums so held in trust by it together with a full accounting thereof; and

 

(3)                                 that it will give the Trustee written notice within three Business Days after any failure of the Company (or by any obligor on the Securities) in the payment of any installment of the principal of, or interest or premium, if any, on, the Securities when the same shall be due and payable.

 

ARTICLE 8

 

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

8.1.                            WITHOUT CONSENT OF HOLDERS.

 

The Company, when authorized by a Board Resolution, and the Trustee may amend or supplement this Indenture or the Securities of one or more Series without notice to or consent of any Securityholder:

 

(1)                                 to comply with Section 5.1;

 

(2)                                 to provide for certificated Securities in addition to uncertificated Securities;

 

(3)                                 to comply with any requirements of the SEC under the TIA;

 

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(4)                                 to cure any ambiguity, defect or inconsistency, or to make any other change herein or in the Securities that does not materially and adversely affect the rights of any Securityholder;

 

(5)                                 to provide for the issuance of, and establish the form and terms and conditions of, Securities of any Series as permitted by this Indenture; or

 

(6)                                 to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more Series, and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee.

 

The Trustee is hereby authorized to join with the Company in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture, and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture which adversely affects its own rights, duties or immunities under this Indenture.

 

8.2.                            WITH CONSENT OF HOLDERS.

 

(a)                                 The Company, when authorized by a Board Resolution, and the Trustee may amend or supplement this Indenture or the Securities of one or more Series with the written consent of the Holders of not less than a majority in aggregate principal amount of the outstanding Securities of such Series affected by such amendment or supplement without notice to any Securityholder.  The Holders of not less than a majority in aggregate principal amount of the outstanding Securities of each such Series affected by such amendment or supplement may waive compliance by the Company in a particular instance with any provision of this Indenture or the Securities of such Series without notice to any Securityholder.  Subject to Section 8.4, without the consent of each Securityholder affected, however, an amendment, supplement or waiver may not:

 

(1)                                 reduce the amount of Securities whose Holders must consent to an amendment, supplement or waiver to this Indenture or the Securities;

 

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

 

(3)                                 reduce the principal, or change the Stated Maturity, of any Security, or reduce the amount of, or postpone the date fixed for, the payment of any sinking fund or analogous obligation;

 

(4)                                 make any Security payable in money other than that stated in the Security;

 

(5)                                 change the amount or time of any payment required by the Securities, or reduce the premium payable upon any redemption of the Securities, or change the time before which no such redemption may be made;

 

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(6)                                 waive a Default or Event of Default in the payment of the principal of, or interest or premium, if any, on, any Security (except a rescission of acceleration of the Securities of any Series by the Holders of at least a majority in principal amount of the outstanding Securities of such Series and a waiver of the payment default that resulted from such acceleration);

 

(7)                                 waive a redemption payment with respect to any Security, or change any of the provisions with respect to the redemption of any Securities;

 

(8)                                 make any changes in Section 6.6 or this Section 8.2, except to increase any percentage of Securities the Holders of which must consent to any matter; or

 

(9)                                 take any other action otherwise prohibited by this Indenture to be taken without the consent of each Holder affected thereby.

 

(b)                                 Upon the request of the Company, accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and upon the receipt by the Trustee of evidence reasonably satisfactory to the Trustee of the consent of the Securityholders as aforesaid and of the documents described in Section 8.6, the Trustee shall join with the Company in the execution of such supplemental indenture, unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

 

(c)                                  It shall not be necessary for the consent of the Holders under this section to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.

 

After an amendment or supplement under this Section becomes effective, the Company shall mail to Securityholders a notice briefly describing the amendment or supplement.  Any failure of the Company to mail any such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any supplemental indenture.

 

8.3.                           COMPLIANCE WITH TRUST INDENTURE ACT.

 

Every amendment to, or supplement of, this Indenture or the Securities shall comply with the TIA as then in effect.

 

8.4.                            REVOCATION AND EFFECT OF CONSENTS.

 

Until an amendment, supplement, waiver or other action becomes effective, a consent to it by a Holder of a Security is a continuing consent conclusive and binding upon such Holder and every subsequent Holder of the same Security or portion thereof, and of any Security issued upon the transfer thereof or in exchange therefor or in place thereof, even if notation of the consent is not made on any such Security.  Any such Holder or subsequent Holder, however, may revoke the consent as to his Security or portion of a Security, if the Trustee receives the notice of revocation before the date the amendment, supplement, waiver or other action becomes effective.

 

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The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver, which record date shall be at least 30 days prior to the first solicitation of such consent.  If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement or waiver, or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date.

 

After an amendment, supplement, waiver or other action becomes effective, it shall bind every Securityholder, unless it makes a change described in any of clauses (1) through (9) of Section 8.2.  In that case, the amendment, supplement, waiver or other action shall bind each Holder of a Security who has consented to it and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Security; PROVIDED, that any such waiver shall not impair or affect the right of any Holder to receive payment of the principal of, and interest and premium, if any, on, a Security, on or after the respective due dates expressed in such Security, or to bring suit for the enforcement of any such payment on or after such respective dates without the consent of such Holder.

 

8.5.                            NOTATION ON OR EXCHANGE OF SECURITIES.

 

If an amendment, supplement or waiver changes the terms of a Security of any Series, the Trustee may request the Holder of such Security to deliver it to the Trustee.  In such case, the Trustee shall place an appropriate notation on such Security about the changed terms and return it to the Holder.  Alternatively, the Company, in exchange for such Security, may issue, and the Trustee shall authenticate, a new security that reflects the changed terms.  Failure to make the appropriate notation or issue a new Security shall not affect the validity and effect of such amendment, supplement or waiver.

 

8.6.                            TRUSTEE TO SIGN AMENDMENTS, ETC.

 

The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article 8 if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee.  If it does, the Trustee may, but need not, sign it.  In signing or refusing to sign such amendment, supplement or waiver the Trustee shall be entitled to receive and, subject to Section 7.1, shall be fully protected in relying upon an Officers’ Certificate and an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by this Indenture.  The Company may not sign an amendment or supplement until the Board of Directors of the Company approves it.

 

ARTICLE 9

 

DISCHARGE OF INDENTURE; DEFEASANCE

 

9.1.                            DISCHARGE OF INDENTURE.

 

The Company may terminate its obligations under the Securities of any Series and this Indenture with respect to such Series, except the obligations referred to in the last paragraph of this Section 9.1, if there shall have been canceled by the Trustee, or delivered to the Trustee for

 

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cancellation, all Securities of such Series theretofore authenticated and delivered (other than any Securities of such Series that are asserted to have been destroyed, lost or stolen and that shall have been replaced as provided in Section 2.8) and the Company has paid all sums payable by it hereunder or deposited all required sums with the Trustee.

 

After such delivery the Trustee upon request shall acknowledge in a writing prepared by or on behalf of the Company the discharge of the Company’s obligations under the Securities of such Series and this Indenture, except for those surviving obligations specified below.

 

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company in Sections 7.7, 9.5 and 9.6 shall survive.

 

9.2.                            LEGAL DEFEASANCE.

 

The Company may at its option, by Board Resolution, be discharged from its obligations with respect to the Securities of any Series on the date upon which the conditions set forth in Section 9.4 below are satisfied (hereinafter, “Legal Defeasance”).  For this purpose, such Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Securities of such Series and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall, subject to Section 9.6, execute proper instruments acknowledging the same, as are delivered to it by the Company), except for the following, which shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of outstanding Securities of such Series to receive solely from the trust funds described in Section 9.4 and as more fully set forth in such section, payments in respect of the principal of, and interest and premium, if any, on, the Securities of such Series when such payments are due, (B) the Company’s obligations with respect to the Securities of such Series under Sections 2.4, 2.5, 2.6, 2.7, 2.8 and 2.9, (C) the rights, powers, trusts, duties and immunities of the Trustee hereunder (including claims of, or payments to, the Trustee under or pursuant to Section 7.7) and (D) this Article 9.  Subject to compliance with this Article 9, the Company may exercise its option under this Section 9.2 with respect to the Securities of any Series notwithstanding the prior exercise of its option under Section 9.3 below with respect to the Securities of such Series.

 

9.3.                            COVENANT DEFEASANCE.

 

At the option of the Company, pursuant to a Board Resolution, the Company shall be released from its obligations with respect to the outstanding Securities of any Series under Sections 4.2 through 4.5, inclusive, and Section 5.1, with respect to the outstanding Securities of such Series, on and after the date the conditions set forth in Section 9.4 are satisfied (hereinafter, “Covenant Defeasance”).  For this purpose, such Covenant Defeasance means that 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 specified section or portion thereof, whether directly or indirectly by reason of any reference elsewhere herein to any such specified Section or portion thereof or by reason of any reference in any such specified section or portion thereof to any other provision herein or in any other document, but the remainder of this Indenture and the Securities of any Series shall be unaffected thereby.

 

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9.4.                            CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE.

 

The following shall be the conditions to application of Section 9.2 or Section 9.3 to the outstanding Securities of a Series:

 

(1)                                      the Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 7.10 who shall agree to comply with the provisions of this Article 9 applicable to it) as funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of the Securities, (A) money in an amount, or (B) U.S. Government Obligations or Foreign Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than the due date of any payment, money in an amount, or (C) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, the principal of, and accrued interest and premium, if any, on, the outstanding Securities of such Series at the Stated Maturity of such principal, interest or premium, if any, or on dates for payment and redemption of such principal, interest and premium, if any, selected in accordance with the terms of this Indenture and of the Securities of such Series;

 

(2)                                      no Event of Default or Default with respect to the Securities of such Series shall have occurred and be continuing on the date of such deposit, or shall have occurred and be continuing at any time during the period ending on the 91st day after the date of such deposit or, if longer, ending on the day following the expiration of the longest preference period under any Bankruptcy Law applicable to the Company in respect of such deposit as specified in the Opinion of Counsel identified in paragraph (8) below (it being understood that this condition shall not be deemed satisfied until the expiration of such period);

 

(3)                                      such Legal Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest for purposes of the TIA with respect to any securities of the Company;

 

(4)                                      such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute default under, any other agreement or instrument to which the Company is a party or by which it is bound;

 

(5)                                      the Company shall have delivered to the Trustee an Opinion of Counsel stating that, as a result of such Legal Defeasance or Covenant Defeasance, neither the trust nor the Trustee will be required to register as an investment company under the Investment Company Act of 1940, as amended;

 

(6)                                      in the case of an election under Section 9.2, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling to the effect that or (ii) there has been a change in any applicable Federal income tax law with the effect that, and such opinion shall confirm that, the Holders of the outstanding Securities of such Series or Persons in

 

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their positions will not recognize income, gain or loss for Federal income tax purposes solely as a result of such Legal Defeasance and will be subject to Federal income tax on the same amounts, in the same manner, including as a result of prepayment, and at the same times as would have been the case if such Legal Defeasance had not occurred;

 

(7)                                      in the case of an election under Section 9.3, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the outstanding Securities of such Series will not recognize income, gain or loss for Federal income tax purposes as a result of such Covenant Defeasance, and will be subject to 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;

 

(8)                                      the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in this Article 9 relating to either the Legal Defeasance under Section 9.2 or the Covenant Defeasance under Section 9.3 (as the case may be) have been complied with;

 

(9)                                      the Company shall have delivered to the Trustee an Officers’ Certificate stating that the deposit under clause (1) was not made by the Company with the intent of defeating, hindering, delaying or defrauding any creditors of the Company or others; and

 

(10)                               the Company shall have paid, or duly provided for payment under terms mutually satisfactory to the Company and the Trustee, all amounts then due to the Trustee pursuant to Section 7.7.

 

9.5.                            DEPOSITED MONEY AND U.S. AND FOREIGN GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.

 

All money, U.S. Government Obligations and Foreign Government Obligations (including the proceeds thereof) deposited with the Trustee pursuant to Section 9.4 in respect of the outstanding Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal, accrued interest and premium, if any, but such money need not be segregated from other funds except to the extent required by law.

 

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations and Foreign Government Obligations deposited pursuant to Section 9.4 or the principal, interest and premium, if any, received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Securities.

 

Anything in this Article 9 to the contrary notwithstanding, but subject to payment of any of its outstanding fees and expenses, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money, U.S. Government Obligations or Foreign Government Obligations held by the Trustee as provided in Section 9.4 which, in the opinion of a nationally-recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would

 

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then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

9.6.                            REINSTATEMENT.

 

If the Trustee or Paying Agent is unable to apply any money, U.S. Government Obligations or Foreign Government Obligations in accordance with Section 9.1, 9.2, 9.3 or 9.4 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article 9 until such time as the Trustee or Paying Agent is permitted to apply all such money, U.S. Government Obligations or Foreign Government Obligations, as the case may be, in accordance with Section 9.1, 9.2, 9.3 or 9.4; PROVIDED, HOWEVER, that if the Company has made any payment of principal of, or accrued interest or premium, if any, on, any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money, U.S. Government Obligations or Foreign Government Obligations held by the Trustee or Paying Agent.

 

9.7.                            MONEYS HELD BY PAYING AGENT.

 

In connection with the satisfaction and discharge of this Indenture, all moneys then held by any Paying Agent under the provisions of this Indenture shall, upon demand of the Company, be paid to the Trustee, or, if sufficient moneys have been deposited pursuant to Section 9.1, to the Company, and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.

 

9.8.                            MONEYS HELD BY TRUSTEE.

 

Any moneys deposited with the Trustee or any Paying Agent or then held by the Company in trust for the payment of the principal of, or interest or premium, if any, on, any Security that are not applied but remain unclaimed by the Holder of such Security for two years after the date upon which the principal of, or interest or premium, if any, on, such Security shall have respectively become due and payable shall be repaid to the Company upon Company Request, or if such moneys are then held by the Company in trust, such moneys shall be released from such trust; and the Holder of such Security entitled to receive such payment shall thereafter, as an unsecured general creditor, look only to the Company for the payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or any such Paying Agent, before being required to make any such repayment, may, at the expense of the Company, either mail to each Securityholder affected, at the address shown in the register of the Securities maintained by the Registrar, or cause to be published once a week for two successive weeks, in a newspaper published in the English language, customarily published each Business Day and of general circulation in the City of New York, New York, a notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such mailing or publication, any unclaimed balance of such moneys then remaining will be repaid to the Company.  After payment to the Company or the release of any money held in trust by the

 

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Company, Securityholders entitled to the money must look only to the Company for payment as general creditors, unless applicable abandoned property law designates another Person.

 

ARTICLE 10

 

MISCELLANEOUS

 

10.1.                     TRUST INDENTURE ACT CONTROLS.

 

If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control.  If any provision of this Indenture modifies or excludes any provision of the TIA which may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

 

10.2.                     NOTICES.

 

Any notice or communication shall be given in writing and delivered in Person, sent by facsimile (and receipt confirmed by telephone or electronic transmission report), delivered by commercial courier service or mailed by first-class mail, postage prepaid, addressed as follows:

 

If to the Company:

 

Verastem, Inc.

215 First Street, Suite 440

Cambridge, Massachusetts 02142

Fax: (617) 812-0059
 Attention:  Chief Operating Officer

 

Copy to:

 

Ropes & Gray LLP

Prudential Tower
 800 Boylston Street
 Boston, MA 02199

Fax: (617) 951-7050
 Attention:  Marc A. Rubenstein, Esq.

 

If to the Trustee:

 

 

 

 

The Company or the Trustee by written notice to the other may designate additional or different addresses for subsequent notices or communications.  Any notice or communication to the Company or the Trustee shall be deemed to have been given or made as of the date so

 

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delivered if personally delivered; when receipt is confirmed by telephone or electronic transmission report, if sent by facsimile; and three Business Days after mailing if sent by registered or certified mail, postage prepaid (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee).

 

Any notice or communication mailed to a Securityholder shall be mailed to such Securityholder by first-class mail, postage prepaid, at such Securityholder’s address shown on the register kept by the Registrar.

 

Failure to mail, or any defect in, a notice or communication to a Securityholder shall not affect its sufficiency with respect to other Securityholders.  If a notice or communication to a Securityholder is mailed in the manner provided above, it shall be deemed duly given, three Business Days after such mailing, whether or not the addressee receives it.

 

In case by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice as required by this Indenture, then such method of notification as shall be made with the approval of the Trustee shall constitute a sufficient mailing of such notice.

 

In the case of Global Securities, notices or communications to be given to Securityholders shall be given to the Depository, in accordance with its applicable policies as in effect from time to time.

 

In addition to the manner provided for in the foregoing provisions, notices or communications to Securityholders shall be given by the Company by release made to Reuters Economic Services and Bloomberg Business News.

 

10.3.                     COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.

 

Securityholders of any Series may communicate pursuant to TIA Section 312(b) with other Securityholders of that Series or any other Series with respect to their rights under this Indenture or the Securities of that Series or any other Series.  The Company, the Trustee, the Registrar and any other Person shall have the protection of TIA Section 312(c).

 

10.4.                     CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

 

Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:

 

(1)                                 an Officers’ Certificate (which shall include the statements set forth in Section 10.5 below) stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

 

(2)                                 an Opinion of Counsel (which shall include the statements set forth in Section 10.5 below) stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

 

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10.5.                     STATEMENT REQUIRED IN CERTIFICATE AND OPINION.

 

Each certificate and opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than pursuant to Section 4.4) shall include:

 

(1)                                 a statement that the Person making such certificate or opinion has read such covenant or condition;

 

(2)                                 a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(3)                                 a statement that, in the opinion of such Person, it or he has made such examination or investigation as is necessary to enable it or him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(4)                                 a statement as to whether or not, in the opinion of such Person, such covenant or condition has been complied with.

 

10.6.                     RULES BY TRUSTEE AND AGENTS.

 

The Trustee may make reasonable rules for action by or at meetings of Securityholders.  The Registrar and Paying Agent may make reasonable rules for their functions.

 

10.7.                     BUSINESS DAYS; LEGAL HOLIDAYS; PLACE OF PAYMENT.

 

A “Business Day” is a day that is not a Legal Holiday.  A “Legal Holiday” is a Saturday, a Sunday, a federally-recognized holiday or a day on which banking institutions are not authorized or required by law, regulation or executive order to be open in the State of New York.

 

If a payment date is a Legal Holiday at a Place of Payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period.  “Place of Payment” means the place or places where the principal of, and interest and premium, if any, on, the Securities of a Series are payable as specified as contemplated by Section 2.2.  If the regular record date is a Legal Holiday, the record date shall not be affected.

 

10.8.                     GOVERNING LAW.

 

THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

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10.9.                     NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

 

This Indenture may not be used to interpret another indenture, loan, security or debt agreement of the Company or any Subsidiary thereof.  No such indenture, loan, security or debt agreement may be used to interpret this Indenture.

 

10.10.              NO RECOURSE AGAINST OTHERS.

 

A director, officer, employee, stockholder or incorporator, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture.  Each Securityholder by accepting a Security waives and releases all such liability.  Such waiver and release are part of the consideration for the issuance of the Securities.

 

10.11.              SUCCESSORS.

 

All covenants and agreements of the Company in this Indenture and the Securities shall bind the Company’s successors and assigns, whether so expressed or not.  All agreements of the Trustee, any additional trustee and any Paying Agents in this Indenture shall bind their respective successors and assigns.

 

10.12.              MULTIPLE COUNTERPARTS.

 

The parties may sign multiple counterparts of this Indenture.  Each signed counterpart shall be deemed an original, but all of them together represent one and the same agreement.

 

10.13.              TABLE OF CONTENTS, HEADINGS, ETC.

 

The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

 

10.14.              SEVERABILITY.

 

Each provision of this Indenture shall be considered separable, and if for any reason any provision which is not essential to the effectuation of the basic purpose of this Indenture or the Securities 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, and a Holder shall have no claim therefor against any party hereto.

 

10.15.              SECURITIES IN A FOREIGN CURRENCY OR IN EUROS.

 

Unless otherwise specified in a Board Resolution, a supplemental indenture hereto or an Officers’ Certificate delivered pursuant to Section 2.2 with respect to a particular Series of Securities, whenever for purposes of this Indenture any action may be taken by the Holders of a specified percentage in aggregate principal amount of Securities of all Series or all Series affected by a particular action at the time outstanding and, at such time, there are outstanding Securities of any Series which are denominated in a coin or currency other than Dollars (including Euros), then the principal amount of Securities of such Series which shall be deemed

 

43

 

to be outstanding for the purpose of taking such action shall be that amount of Dollars that could be obtained for such amount at the Market Exchange Rate at such time.  For purposes of this Section 10.15, “Market Exchange Rate” shall mean the noon Dollar buying rate in New York City for cable transfers of that currency as published by the Federal Reserve Bank of New York; PROVIDED, HOWEVER, in the case of Euros, Market Exchange Rate shall mean the rate of exchange determined by the Commission of the European Union (or any successor thereto) as published in the Official Journal of the European Union (such publication or any successor publication, the “Journal”).  If such Market Exchange Rate is not available for any reason with respect to such currency, the Trustee shall use, in its sole discretion and without liability on its part, such quotation of the Federal Reserve Bank of New York or, in the case of Euros, the rate of exchange as published in the Journal, as of the most recent available date, or quotations or, in the case of Euros, rates of exchange from one or more major banks in New York City or in the country of issue of the currency in question or, in the case of Euros, in Luxembourg or such other quotations or, in the case of Euros, rates of exchange as the Trustee, upon consultation with the Company, shall deem appropriate.  The provisions of this paragraph shall apply in determining the equivalent principal amount in respect of Securities of a Series denominated in currency other than Dollars in connection with any action taken by Holders of Securities pursuant to the terms of this Indenture.

 

All decisions and determinations of the Trustee regarding the Market Exchange Rate or any alternative determination provided for in the preceding paragraph shall be in the Trustee’s sole discretion, and shall, in the absence of manifest error, be conclusive to the extent permitted by law for all purposes and irrevocably binding upon the Company and all Holders.

 

10.16.              JUDGMENT CURRENCY.

 

The Company agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due in respect of the principal of, or interest or premium, if any, or other amount on, the Securities of any Series (the “Required Currency”) into a currency in which a judgment will be rendered (the “Judgment Currency”), the rate of exchange used shall be the rate at which, in accordance with normal banking procedures, the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the day on which final unappealable judgment is entered, unless such day is not a Business Day, in which instance, the rate of exchange used shall be the rate at which, in accordance with normal banking procedures, the Trustee could purchase in The City of New York the Required Currency with the Judgment Currency on the Business Day preceding the day on which final unappealable judgment is entered and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender or any recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)) in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.

 

	
 
    	
VERASTEM, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
[Name   of Trustee]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

45Exhibit 4.2

 

EAGLE PHARMACEUTICALS, INC.

 

THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

 

This THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this “Agreement”) is made as of April 11, 2013, by and among Eagle Pharmaceuticals, Inc., a Delaware corporation (the “Company”), the holders of the Company’s Series A Convertible Preferred Stock listed on the Schedule of Investors attached hereto as Exhibit A (the “Series A Holders”), the holders of the Company’s Series B Convertible Preferred Stock listed on the Schedule of Investors attached hereto as Exhibit A (the “Series B Holders”), the holders of the Company’s Series B-1 Convertible Preferred Stock listed on the Schedule of Investors attached hereto as Exhibit A (the “Series B-1 Holders”), the holders of the Company’s Series C Convertible Preferred Stock listed on the Schedule of Investors attached hereto as Exhibit A (the “Series C Holders” and, collectively with the Series A Holders, the Series B Holders and the Series B-1 Holders, the “Investors”) and Scott L. Tarriff (the “Key Employee”).

 

RECITALS:

 

WHEREAS, the Company and the Series A Holders have entered into that certain Series A Convertible Preferred Stock Purchase Agreement, dated as of March 8, 2007 (the “Series A Purchase Agreement”), which provided for, among other things, the purchase by the Series A Holders of shares of the Company’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”);

 

WHEREAS, the obligations of the Series A Holders under the Series A Purchase Agreement were conditioned upon the execution and delivery by the Company, the Series A Holders and the Key Employee of that certain Investor Rights Agreement, dated as of March 8, 2007 (the “Original Investor Rights Agreement”);

 

WHEREAS, the Company and the Series B Holders have entered into that certain Series B Convertible Preferred Stock Purchase Agreement, dated as of August 11, 2008 (the “Series B Purchase Agreement”), which provided for, among other things, the purchase by the Series B Holders of shares of the Company’s Series B Convertible Preferred Stock (the “Series B Preferred Stock”);

 

WHEREAS, the obligations of the Series B Holders under the Series B Purchase Agreement were conditioned upon the execution and delivery by the Company, the Series B Holders and the Key Employee of that certain Amended and Restated Investor Rights Agreement, dated as of August 11, 2008 (the “Amended and Restated Investor Rights Agreement”), which amended and restated the Original Investor Rights Agreement;

 

WHEREAS, the Company and the Series B-1 Holders have entered into that certain Series B-1 Convertible Preferred Stock Purchase Agreement, dated as of February 4, 2011 (the “Series B-1 Purchase Agreement”), which provided for, among other things, the purchase by the Series B-1 Holders of shares of the Company’s Series B-1 Convertible Preferred Stock (the “Series B-1 Preferred Stock”);

 

 

WHEREAS, the obligations of the Series B-1 Holders under the Series B-1 Purchase Agreement were conditioned upon the execution and delivery by the Company, the Series B-1 Holders and the Key Employee of that certain Second Amended and Restated Investor Rights Agreement, dated as of February 4, 2011 (the “Second Amended and Restated Investor Rights Agreement”), which amended and restated the Amended and Restated Investor Rights Agreement;

 

WHEREAS, the Company and one of the Series C Holders have entered into that certain Series C Convertible Preferred Stock Purchase Agreement, dated as of April 11, 2013 (the “Series C Purchase Agreement”), which provides for, among other things, the purchase by such Series C Holder of shares of the Company’s Series C Convertible Preferred Stock (the “Series C Preferred Stock”);

 

WHEREAS, the obligations of the Investor party to the Series C Purchase Agreement are conditioned upon the execution and delivery of this Agreement (which will amend and restate the Second Amended and Restated Investor Rights Agreement); and WHEREAS, the Company and the Holders holding a majority of the Registrable Securities desire to amend and restate the Second Amended and Restated Investor Rights Agreement in its entirety;

 

NOW, THEREFORE, in consideration of these premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, (i) the Company and the Holders holding a majority of the Registrable Securities hereby amend and restate the Second Amended and Restated Investor Rights Agreement in its entirety as follows and (ii) the Investors and the Key Employee hereby agree as follows:

 

1.                                      Definitions.

 

1.1.                            Certain Definitions.  As used in this Agreement, the following terms shall have the meanings set forth below:

 

(a)                                 “Affiliate” (and its correlative, “Affiliated entities”) means any Person directly or indirectly controlling, controlled by or under common control with another Person.

 

(b)                                 “Affiliated Fund” shall have the meaning set forth in Section 2.8(a)(iii) hereof

 

(c)                                  “Agreement” shall have the meaning set forth in the first paragraph hereto.

 

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

 

(e)                                  “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act (as defined herein).

 

(f)                                   “Common Stock” shall mean the Common Stock, par value $.001 per share, of the Company.

 

(g)                                  “Control” (including its correlative meanings, “controlled by” and “under common control with”) shall mean possession, directly or indirectly through one or more intermediaries, of power to direct or cause the direction of management or policies

 

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(whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).

 

(h)                                 “Company” shall have the meaning set forth in the first paragraph hereto.

 

(i)                                     “Co-Sale Agreement” shall mean the Third Amended and Restated Co-Sale Agreement (as defined in the Series C Purchase Agreement).

 

(j)                                    “Deemed Liquidation Event” shall have the meaning set forth in the Company’s Fifth Amended and Restated Certificate of Incorporation.

 

(k)                                 “Election Period” shall have the meaning set forth in Section 4.1(c) hereof.

 

(1)                                 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

 

(m)                             “Holder” shall mean (i) any Investor that holds Registrable Securities (as defined herein) and (ii) any holder of Registrable Securities to whom the registration rights conferred by this Agreement shall have been duly and validly transferred in accordance with Section 2.12 of this Agreement.

 

(n)                                 “Indemnified Party” shall have the meaning set forth in Section 2.6(c) hereof.

 

(o)                                 “Indemnifying Party” shall have the meaning set forth in Section 2.6(c) hereof.

 

(p)                                 “Initial Public Offering” shall mean the closing of the Company’s first firm commitment underwritten public offering of Common Stock registered under the Securities Act.

 

(q)                                 “Initiating Holders” shall mean any Holder or Holders who in the aggregate hold not less than thirty percent (30%) of the outstanding Registrable Securities; provided, that, for the purpose of Section 2.3 of this Agreement, the term “Initiating Holders” shall mean any Holder or Holders who in the aggregate hold not less than ten percent (10%) of the outstanding Registrable Securities.

 

(r)                                    “Investors” shall have the meaning set forth in the first paragraph hereto.

 

(s)                                   “Key Employee” shall have the meaning set forth in the first paragraph hereto.

 

(t)                                    “Major Investor” shall mean an Investor holding, together with its Affiliates, at least 1,000,000 shares (as adjusted for stock splits, stock dividends, reverse stock splits and the like) of Preferred Stock.

 

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(u)                                 “New Securities” shall have the meaning set forth in Section 4.1(a) hereof.

 

(v)                                 “Person” shall mean a natural person, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other entity.

 

(w)                               “Preferred Stock” shall mean, collectively, the Series A Preferred Stock, the Series B Preferred Stock, the Series B-1 Preferred Stock and the Series C Preferred Stock.

 

(x)                                 “Registrable Securities” shall mean: (i) shares of Common Stock owned as of the date hereof by ProQuest Investments IV, L.P.; (ii) shares of Series A Preferred Conversion Stock, Series B Preferred Conversion Stock, Series B-1 Preferred Conversion Stock and Series C Preferred Conversion Stock; (iii) shares of Common Stock hereafter acquired or issued pursuant to the exercise or conversion of any securities hereafter acquired by the Investors pursuant to the right of first refusal set forth in Section 2.4 of the Co-Sale Agreement and/or pursuant to the right of first refusal set forth in Section 4 of this Agreement; and (iv) any Common Stock issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in the foregoing clauses (i), (ii) or (iii) above; provided, however, that Registrable Securities shall not include any shares of Common Stock described above which have previously been registered or which have been sold to the public either pursuant to a registration statement under the Securities Act or Rule 144.

 

(y)                                 The terms “register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.

 

(z)                                  “Registration Expenses” shall mean all expenses incurred by the Company in effecting any registration pursuant to this Agreement, including, without limitation, all registration, qualification, filing fees, printing expenses, accounting fees, escrow fees, fees and disbursements of counsel for the Company, fees and disbursements of one special counsel for the Holders (selected by a majority-in-interest of the Holders and limited in amount as set forth in the definition of Selling Expenses below), blue sky fees and expenses, and expenses of any regular or special audits incident to or required by any such registration, but shall not include Selling Expenses, fees and disbursements of other counsel for the Holders and the compensation of regular employees of the Company, which shall be paid in any event by the Company.

 

(aa)                          “Restricted Securities” shall mean any Registrable Securities required to bear the first legend set forth in Section 2.8(b) hereof.

 

(bb)                          “Rule 144” shall mean Rule 144 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

 

(cc)                            “Rule 145” shall mean Rule 145 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

 

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(dd)                          “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

 

(ee)                            “Selling Expenses” shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel for any Holder (other than the fees and disbursements of one special counsel to the Holders not to exceed $50,000 included in Registration Expenses).

 

(ff)                              “Series A Holders” shall have the meaning set forth in the first paragraph hereto.

 

(gg)                            “Series A Preferred Conversion Stock” shall mean the shares of Common Stock issued upon conversion of the Series A Preferred Stock.

 

(hh)                          “Series A Preferred Stock” shall have the meaning set forth in the Recitals hereto.

 

(ii)                                  “Series B Holders” shall have the meaning set forth in the first paragraph hereto.

 

(jj)                                “Series B Preferred Conversion Stock” shall mean the shares of Common Stock issued upon conversion of the Series B Preferred Stock.

 

(kk)                          “Series B Preferred Stock” shall have the meaning set forth in the Recitals hereto.

 

(ll)                                  “Series B-1 Holders” shall have the meaning set forth in the first paragraph hereto.

 

(mm)                  “Series B-1 Preferred Conversion Stock” shall mean the shares of Common Stock issued upon conversion of the Series B-1 Preferred Stock.

 

(nn)                          “Series B-1 Preferred Stock” shall have the meaning set forth in the Recitals hereto.

 

(oo)                          “Series C Holders” shall have the meaning set forth in the first paragraph hereto.

 

(pp)                          “Series C Preferred Conversion Stock” shall mean the shares of Common Stock issued upon conversion of the Series C Preferred Stock.

 

(qq)                          “Series C Preferred Stock” shall have the meaning set forth in the Recitals hereto.

 

(n)                                 “Series C Purchase Agreement” shall have the meaning set forth in the Recitals hereto.

 

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(ss)                              “Shares” shall mean (i) the Company’s Preferred Stock, (ii) the Company’s Common Stock and (iii) any securities issued with respect to the foregoing upon any stock split, stock dividend, recapitalization, or similar event or upon any conversion.

 

(tt)                                “Subject Securities” shall mean all Registrable Securities held by the Investors and the shares of Common Stock held at any time by the Key Employee; provided, however, that Subject Securities shall not include any shares of Common Stock described above which have been previously registered or which have been sold to the public either pursuant to a registration statement under the Securities Act or Rule 144.

 

2.                                      Registration Rights; Restrictions on Transfer.

 

2.1.                            Demand Registration.

 

(a)                                 Request for Registration. Subject to the conditions set forth in this Section 2.1, if the Company shall receive from Initiating Holders a written request signed by such Initiating Holders that the Company effect any registration of the Registrable Securities of the Company with an aggregate offering price to the public (net of underwriting discounts and commissions) of not less than Five Million Dollars ($5,000,000) (such request shall state the number of shares of Registrable Securities requested to be disposed of by such Initiating Holders), the Company will promptly give written notice of the proposed registration to all other Holders whereupon such other Holders shall give written notice to the Company within 20 days after the date of the Company’s notice (the “Notice Period”) if they propose to dispose of any shares of Registrable Stock pursuant to such registration, stating the number of shares of Registrable Stock to be disposed of by such Holder or Holders and the intended method of disposition.

 

(b)                                 The Key Employee may register securities for sale for his own account in any registration requested pursuant to this Section 2.1, subject to limitations on the number of shares which may be imposed by the underwriter as set forth in Section 2.1(f) below. At the time the Company shall give the notice to Holders required by Section 2.1(a), it shall also give the same notice to the Key Employee whereupon the Key Employee shall give written notice to the Company within the Notice Period if he proposes to dispose of any shares of Common Stock held by him pursuant to such registration, stating the number of shares of Common Stock to be disposed of by the Key Employee and the intended method of disposition.

 

(c)                                  The Company shall, as soon as practicable, file and use its commercially reasonable efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and to permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Subject Securities of any Holder or Holders or the Key Employee joining in such request as are specified in a written request received by the Company within twenty (20) days after such written notice from the Company is mailed or delivered; provided that unless a registration pursuant to this Section 2.1 is the Company’s Initial Public Offering, the Company also shall use its reasonable best efforts to file the registration statement within ninety (90) days of the receipt of the request from the Initiating Holders.

 

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(d)                                 Limitations on Requested Registration. The Company shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 2.1:

 

(i)                                     prior to the earlier of (A) the five (5) year anniversary of the Closing Date or (B) six (6) months following the effective date of the Company’s Initial Public Offering;

 

(ii)                                  in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(iii)                               after the Company has initiated two (2) such registrations pursuant to this Section 2.1 (counting for these purposes only (1) registrations where at least 75% of the Registrable Securities requested to be registered are in fact registered and which have been declared or ordered effective and pursuant to which securities have been sold, and (2) registrations that closed, or were withdrawn at the request of the Holders (other than as a result of a material adverse change to the Company)); or

 

(iv)                              during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of filing of, and ending on a date ninety (90) days (or in the case of the Company’s Initial Public Offering, one hundred eighty (180) days) after the effective date of, a Company-initiated registration (other than a registration relating solely to employee benefit plans); provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective.

 

(e)                                  Deferral. If (i) in the good faith judgment of the Board of Directors of the Company, the filing of a registration statement covering the Registrable Securities would be materially detrimental to the Company and the Board of Directors of the Company concludes, as a result, that it is in the best interests of the Company to defer the filing of such registration statement at such time, and (ii) the Company shall furnish to such Holders a certificate signed by the President of the Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company for such registration statement to be filed in the near future and that it is, therefore, in the best interests of the Company to defer the filing of such registration statement, then (in addition to the limitations set forth in Section 2.1(d)(iv) above) the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders; provided that the Company shall not defer its obligation in this manner more than twice in any twelve-month period.

 

(f)                                   Underwriting. If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.1 and the Company shall include such information in the written notice referred to in subsection 2.1(a). In such event, the right of any Holder or the Key Employee to include all or any portion of its Subject Securities in a registration pursuant to this Section 2.1 shall be conditioned upon such Holder’s or the Key

 

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Employee’s participation in such underwriting and the inclusion of such Holder’s or the Key Employee’s Subject Securities to the extent provided herein. If the Company shall request inclusion in any registration pursuant to Section 2.1 of securities being sold for its own account, or if other persons shall request inclusion in any registration pursuant to Section 2.1, the Initiating Holders shall, on behalf of all Holders and the Key Employee, offer to include such securities in the underwriting and such offer shall be conditioned upon the participation of the Company or such other persons in such underwriting and the inclusion of the Company’s and such other person’s securities of the Company and their acceptance of the further applicable provisions of this Section 2 (including Section 2.10). The Company shall (together with all Holders and the Key Employee proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by the Company, which underwriters shall be reasonably acceptable to a majority in interest of the Initiating Holders.

 

Notwithstanding any other provision of this Section 2.1, if the underwriters advise the Initiating Holders in writing that (i) marketing factors require a limitation on the number of shares to be underwritten, or a limitation of the total number of shares of the Key Employee to be underwritten, or (ii) the offering price per share would be reduced by the inclusion of the shares of the Key Employee and/or the Company, then the number of shares to be included in the registration and underwriting shall first be allocated among all Holders who indicated to the Company their decision to distribute any of their Registrable Securities through such underwriting, in proportion, as nearly as practicable, to the respective numbers of shares of Registrable Securities owned by such Holders at the time of filing the registration statement, then to the Key Employee who has indicated to the Company his decision to distribute any of his Subject Securities (not otherwise constituting Registrable Securities) through such underwriting, in proportion, as nearly as practicable, to the number of shares of Subject Securities owned by the Key Employee at the time of filing the registration statement, and the remainder, if any, to the Company; provided, however, that if the underwriter determines that marketing factors require a limitation of the number of shares of the Key Employee to be underwritten or that the offering price per share would be reduced by the inclusion of the shares of the Key Employee, then the number of shares of the Key Employee that may be so included shall be reduced, or eliminated from registration, as the underwriter shall advise. No stock excluded from the underwriting by reason of the underwriter’s marketing limitation shall be included in such registration. In no event shall Registrable Securities be excluded from such registration unless all other stockholders’ securities and securities for the account of the Company have been first excluded.

 

If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall be excluded therefrom by written notice from the Company, the underwriter or the Initiating Holders. The securities so excluded shall also be withdrawn from registration. Any Subject Securities or other securities excluded or withdrawn from such underwriting shall also be withdrawn from such registration. If shares are so withdrawn from the registration and if the number of shares to be included in such registration was previously reduced as a result of marketing factors pursuant to this Section 2.1(f), then the Company shall then offer to all Holders, and thereafter to the Key Employee, who have retained rights to include securities in the registration the right to include additional Subject Securities in the registration in an aggregate amount equal to the number of shares so withdrawn, with such

 

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shares to be allocated first among such Holders requesting additional inclusion, as set forth above, and thereafter to the Key Employee.

 

2.2.                            Piggyback Registration.

 

(a)                                 Piggyback Registration.  If the Company shall determine to register any of its securities either for its own account or the account of a security holder or holders, other than a registration pursuant to Section 2.1 or 2.3, a registration relating solely to employee benefit plans, a registration relating to the offer and sale of debt securities, a registration relating to a corporate reorganization or other Rule 145 transaction, or a registration on any registration form that does not permit secondary sales, the Company will:

 

(i)                                     promptly give written notice of the proposed registration to all Holders and the Key Employee; and

 

(ii)                                  use its commercially reasonable efforts to include in such registration (and any related qualification under blue sky laws or other compliance), except as set forth in Section 2.2(b) below, and in any underwriting involved therein, all of such Subject Securities as are specified in a written request or requests made by any Holder or Holders or the Key Employee received by the Company within twenty (20) days after such written notice from the Company is mailed or delivered. Such written request may specify all or a part of a Holder’s or the Key Employee’s Subject Securities.

 

(b)                                 Underwriting.  If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders and the Key Employee as a part of the written notice given pursuant to Section 2.2(a)(i). In such event, the right of any Holder or the Key Employee to registration pursuant to this Section 2.2 shall be conditioned upon such Holder’s or the Key Employee’s participation in such underwriting and the inclusion of such Holder’s or the Key Employee’s Subject Securities in the underwriting to the extent provided herein. All Holders and the Key Employee proposing to distribute their securities through such underwriting shall (together with the Company and the other holders of securities of the Company with registration rights to participate therein distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by the Company.

 

Notwithstanding any other provision of this Section 2.2, if the underwriters advise the Company in writing that marketing factors require a limitation on the number of shares to be underwritten, the underwriters may (subject to the limitations set forth below) limit the number of Subject Securities to be included in the registration and underwriting. In no event shall any Registrable Securities be excluded from such registration and underwriting unless all other stockholders’ securities have been first excluded. In the event that the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such registration and underwriting, then the Registrable Securities that are included in such registration and underwriting shall be apportioned pro rata among the selling Holders based on the number of Registrable Securities held by all selling Holders or in such other proportions as shall mutually be agreed to by all such selling Holders. Notwithstanding the foregoing, in no

 

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event shall the amount of securities of the selling Holders included in the registration and underwriting be reduced below thirty percent (30%) of the total amount of securities included in such registration and underwriting, unless such registration is the Company’s Initial Public Offering, in which case the selling Holders may be excluded if the underwriters make the determination described above.

 

If a person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such person shall also be excluded therefrom by written notice from the Company or the underwriter. The securities so excluded shall also be withdrawn from such registration. Any Subject Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration.

 

(c)                                  Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder or the Key Employee has elected to include securities in such registration.

 

2.3.                            Registration on Form S-3.

 

(a)                                 Request for Form S-3 Registration.  If the Company is then qualified for the use of Form S-3, in addition to the rights contained in the foregoing provisions of this Section 2 and subject to the conditions set forth in this Section 2.3, and shall receive from Initiating Holders a written request signed by such Initiating Holders that the Company effect any registration on Form S-3 or any similar short form registration statement with respect to all or part of the Registrable Securities (such request shall state the number of shares of Registrable Securities requested to be disposed of and the intended methods of disposition of such shares by such Holder or Holders), the Company will take all such actions with respect to such Registrable Securities as required by Section 2.1(a); provided that in the case of a registration pursuant to this Section 2.3, the Company also shall use its reasonable best efforts to file the registration statement within ninety (90) days of the receipt of the request from the Initiating Holders.

 

(b)                                 Limitations on Form S-3 Registration.  The Company shall not be obligated to effect, or take any action to effect, any such registration pursuant to this Section 2.3:

 

(i)                                     in the circumstances described in either Sections 2.1(d)(ii) or 2.1(d)(iv);

 

(ii)                                  if the Initiating Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) on Form S-3 at an aggregate price to the public (net of any underwriters’ discounts and commissions) of less than Three Million Dollars ($3,000,000); or

 

(iii)                               if, in a given six-month period, the Company has effected one (1) such registration in such period.

 

(c)                                  Deferral. The provisions of Section 2.1(e) shall apply to any registration pursuant to this Section 2.3.

 

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(d)                                 Underwriting.  If the Initiating Holders requesting registration under this Section 2.3 intend to distribute the Registrable Securities covered by their request by means of an underwriting, the provisions of Sections 2.1(f) shall apply to such registration. Notwithstanding anything contained herein to the contrary, registrations effected pursuant to this Section 2.3 shall not be counted as requests for registration or registrations effected pursuant to Section 2.1.

 

2.4.                            Expenses of Registration.  All Registration Expenses incurred in connection with registrations pursuant to Sections 2.1, 2.2 and 2.3 hereof shall be borne by the Company; provided that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Sections 2.1 and 2.3 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders shall bear such expenses pro rata among each other based on the number of Registrable Securities requested to be so registered), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to a demand registration pursuant to Section 2.1; and provided, further, that if at the time of such withdrawal, the Holders have learned of a material adverse change in the condition, business or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness following disclosure by the Company of, or their learning of, such material adverse change, then the Holders shall not be required to pay any of such expenses and shall retain their rights pursuant to Section 2.1 or 2.3, as the case may be. All Selling Expenses shall be borne pro rata by the selling Holders based on the number of Registrable Securities requested to be so registered.

 

2.5.                            Registration Procedures.  In the case of each registration effected by the Company pursuant to Section 2, the Company will keep each Holder and the Key Employee advised in writing as to the initiation of each registration and as to the completion thereof At its expense, the Company will use its commercially reasonable efforts to:

 

(a)                                 keep such registration effective for a period ending on the earlier of the date which is nine (9) months from the effective date of the registration statement or such time as the Holder or Holders have completed the distribution described in the registration statement relating thereto;

 

(b)                                 prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in subsection (a) above;

 

(c)                                  furnish such number of prospectuses, including any preliminary prospectuses, and other documents incident thereto, including any amendment of or supplement to the prospectus, as a Holder from time to time may reasonably request;

 

(d)                                 use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company

 

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shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such jurisdictions;

 

(e)                                  notify each seller of Subject Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and following such notification promptly prepare and furnish to such Holder or the Key Employee a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing;

 

(f)                                   provide a transfer agent and registrar for all Subject Securities registered pursuant to such registration statement and a CUSIP number for all such. Subject Securities, in each case not later than the effective date of such registration;

 

(g)                                  cause all such Subject Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed;

 

(h)                                 otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission;

 

(i)                                     in connection with any underwritten offering pursuant to a registration statement filed pursuant to Section 2.1 hereof, enter into an underwriting agreement in form reasonably necessary to effect the offer and sale of Common Stock, provided such underwriting agreement contains reasonable and customary provisions; provided further that each Holder and the Key Employee participating in such underwriting shall also enter into and perform its obligations under such an agreement; and

 

(j)                                    use its commercially reasonable efforts to furnish, at the request of any Holder or the Key Employee requesting registration of Subject Securities pursuant to this Section 2, on the date that such Subject Securities are delivered to the underwriters for sale in connection with a registration pursuant to this Section 2, if such securities are being sold through underwriters, (i) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, and (ii) a letter dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters.

 

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2.6.                            Indemnification.

 

(a)                                 To the extent permitted by law, the Company will indemnify and hold harmless each Holder, each of its officers, directors and partners, and each person controlling such Holder within the meaning of Section 15 of the Securities Act, and the Key Employee, with respect to which registration, qualification, or compliance has been effected pursuant to this Section 2, and each underwriter, if any, and each person who controls within the meaning of Section 15 of the Securities Act any underwriter, against all expenses, claims, losses, damages and liabilities (or actions, proceedings or settlements in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any prospectus, offering circular, or other document (including any related registration statement, notification, or the like) incident to any such registration, qualification, or compliance; (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; or (iii) any violation (or alleged violation) by the Company of the Securities Act, the Exchange Act, any state securities laws or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any offering covered by such registration, qualification, or compliance, and the Company will reimburse each such Holder, each of its officers, directors and partners, and each person controlling such Holder, and the Key Employee, each such underwriter, and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability, or action as they are incurred; provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability, or action arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by such Holder, any of such Holder’s officers, directors and partners, and any person controlling such Holder, or the Key Employee, as the case may be, such underwriter or any person who controls any such underwriter and stated to be specifically for use therein; and provided, further, that the indemnity agreement contained in this Section 2.6(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld, conditioned or delayed).

 

(b)                                 To the extent permitted by law, each Holder and the Key Employee will, if Subject Securities held by such Holder or the Key Employee, as the case may be, are included in the securities as to which such registration, qualification or compliance is being effected, indemnify and hold harmless the Company, each of its directors, officers and partners, and each underwriter, if any, of the Company’s securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, each other such Holder or the Key Employee, and each of their officers, directors and partners, and each person controlling such Holder or the Key Employee, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any such registration statement, prospectus, offering circular, or other document, or (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and such Holders, Key Employee, directors, officers, partners, persons, underwriters, or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action as they are incurred, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue

 

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statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular, or other document in reliance upon and in conformity with written information furnished to the Company by such Holder or the Key Employee, as the case may be, and stated to be specifically for use therein; provided that the obligations of such Holder hereunder or the Key Employee, as the case may be, shall not apply to amounts paid in settlement of any such claims, losses, damages, or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder or the Key Employee, as the case may be (which consent shall not be unreasonably withheld); and provided, further, that in no event shall any indemnity under this Section 2.6 exceed the net proceeds from the offering received by such Holder or the Key Employee, as the case may be.

 

(c)                                  Each party entitled to indemnification under this Section 2.6 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense; provided, further, that an Indemnified Party (together with all other Indemnified Parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding; and provided, further, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2.6, to the extent the Indemnifying Party is not prejudiced thereby. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

 

(d)                                 If the indemnification provided for in this Section 2.6 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage, or expense referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense, as well as any other relevant equitable considerations; provided that no contribution by any Holder, when combined with any amounts paid by such Holder pursuant to Section 2.6(b), shall exceed the net proceeds from the offering received by such Holder. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged

 

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untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

 

(e)                                  Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in such underwriting agreement shall control.

 

2.7.                            Information by Holder and the Key Employee.  Each Holder of Registrable Securities and the Key Employee owning Subject Securities shall furnish to the Company such information regarding such Holder or the Key Employee, as the case may be, and the distribution proposed by such Holder or the Key Employee as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification, or compliance referred to in this Section 2.

 

2.8.                            Securities Laws Restrictions on Transfer.

 

(a)                                 Each Holder and the Key Employee, in addition to any other restrictions to which he, she or it may be subject (including, without limitation, under the Co-Sale Agreement), agrees not to make any sale, assignment, transfer, pledge or other disposition of all or any portion of the equity securities of the Company owned by it, or any beneficial interest therein, unless and until (x) the transferee thereof has agreed in writing for the benefit of the Company to take and hold such equity securities subject to, and to be bound by, the terms and conditions set forth in this Agreement, including, without limitation, this Section 2.8 and Section 2.10, and (y):

 

(i)                                     There is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or

 

(ii)                                  Such Holder or the Key Employee shall have given prior written notice to the Company of such Holder’s or the Key Employee’s, as the case may be, intention to make such disposition and shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition, and, if requested by the Company, such Holder or the Key Employee shall have furnished the Company, at such Holder’s or the Key Employee’s, as the case may be, expense, with (A) an opinion of counsel, reasonably satisfactory to the Company, to the effect that such disposition will not require registration of such equity securities under the Securities Act or (B) a “no action” letter from the Commission to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, whereupon the holder of such equity securities shall be entitled to transfer such equity securities in accordance with the terms of the notice delivered by the Holder or the Key Employee to the Company. It is agreed that the Company will not require opinions of counsel or “no action” letters for transactions made pursuant to Rule 144, except in unusual circumstances.

 

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(iii)                               Notwithstanding the provisions of subsections (a)(i) and (a)(ii) above, no such registration statement or opinion of counsel or “no action” letter shall be necessary for: (A) a transfer by a Holder to any of its Affiliates (including an Affiliated fund managed by the same manager or managing member or general partner or management company or by an entity controlling, controlled by, or under common control with such manager or managing member or general partner or management company, each an “Affiliated Fund”); (B) a transfer by a Holder that is a partnership, limited liability company or corporation to a subsidiary, parent, partner, limited partner, retired partner, member, retired member or stockholder of a Holder; (C) the transfer by a Holder or the Key Employee by gift, will or intestate succession of such Holder or the Key Employee to his or her spouse or to the siblings, lineal descendants or ancestors of such Holder or the Key Employee or his or her spouse; or (D) the transfer by a Holder or the Key Employee pursuant to Section 2.5, Section 3 or Section 4.1 of the Co-Sale Agreement, if in each transfer under clauses (A), (B) or (C) the prospective transferee agrees in all such instances in writing to be subject to the terms hereof to the same extent as if he or she were an original party hereunder.

 

(b)                                 Each certificate representing equity securities of the Company shall (unless otherwise permitted by the provisions of this Agreement) be stamped or otherwise imprinted with a legend substantially similar to the following (in addition to any legend required under applicable state securities laws):

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO (1) RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD OF UP TO 180 DAYS IN THE EVENT OF A PUBLIC OFFERING, AS SET FORTH IN AN INVESTOR RIGHTS AGREEMENT, AND (2) VOTING RESTRICTIONS AS SET FORTH IN A VOTING AGREEMENT AMONG THE COMPANY AND THE ORIGINAL HOLDERS OF THESE SHARES, COPIES OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.

 

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The Holders and the Key Employee consent to the Company making a notation on its records and giving instructions to any transfer agent of the equity securities in order to implement the restrictions on transfer established in this Section 2.8.

 

(c)                                  The first legend referring to federal and state securities laws identified in Section 2.8(b) hereof stamped on a certificate evidencing the equity securities and the stock transfer instructions and record notations with respect to such equity securities shall be removed and the Company shall issue a certificate without such legend to the holder of such equity securities if (i) such securities are registered under the Securities Act; or (ii) such holder provides the Company with an opinion of counsel reasonably acceptable to the Company to the effect that a public sale or transfer of such securities may be made without registration under the Securities Act; or (iii) such holder provides the Company with reasonable assurances, which may, at the option of the Company, include an opinion of counsel reasonably satisfactory to the Company, that such securities can be sold pursuant to Section (d) of Rule 144 under the Securities Act.

 

2.9.                            Rule 144 Reporting.  With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Subject Securities to the public without registration, the Company agrees to use its commercially reasonable efforts to:

 

(a)                                 make and keep public information regarding the Company available as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public;

 

(b)                                 file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at any time after it has become subject to such reporting requirements; and

 

(c)                                  so long as a Holder or the Key Employee owns any Restricted Securities, furnish to the Holder or the Key Employee, as the case may be, forthwith upon written request a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time from and after ninety (90) days following the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed as a Holder or Key Employee, as the case may be, may reasonably request in availing itself of any rule or regulation of the Commission allowing a Holder or the Key Employee to sell any such securities without registration.

 

2.10.                     Market Stand-Off Agreement.  If requested by the managing underwriter in connection with the Company’s Initial Public Offering, each Holder and the Key Employee hereby agrees that such Holder or the Key Employee, as the case may be, shall not sell or otherwise transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, of any Common Stock (or other securities) of the Company held by such Holder or the Key Employee, as the case may be

 

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(other than those included in the registration), during the one hundred eighty (180) day period following the effective date of the Company’s Initial Public Offering; provided that all of the directors and officers of the Company and one percent (1%) stockholders of the Company agree to the same terms; provided, further, that if the Company or the underwriters waive or shorten the lock-up period for any of the Company’s officers, directors or stockholders, then the lock-up for each Holder or the Key Employee will be waived or shortened pro rata, based on the number of Shares held by each Holder or the Key Employee, as the case may be. The obligations described in this Section 2.10 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions and may stamp each such certificate with the second legend set forth in Section 2.8(b) hereof with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of such one hundred eighty (180) day period. Each Holder agrees to execute a market standoff agreement with said underwriters in customary form consistent with the provisions of this Section 2.10.

 

2.11.                     Delay of Registration.  No Holder or the Key Employee shall have any right to take any action to restrain, enjoin, or otherwise delay any registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

2.12.                     Transfer or Assignment of Registration Rights.  The rights to cause the Company to register securities granted to a Holder by the Company under this Section 2 may be transferred or assigned by a Holder only to: (a) a transferee or assignee of not less than 250,000 shares of Registrable Securities (as presently constituted and subject to subsequent adjustments for stock splits, stock dividends, reverse stock splits, and the like); (b) an Affiliate of a Holder (including an Affiliated Fund); (c) if a Holder is a partnership, limited liability company or corporation, then to a subsidiary, parent, partner, limited partner, retired partner, member, retired member or stockholder of such Holder; or (d) a Holder’s ancestors, descendants, siblings or spouse, or a trust or family limited partnership for the benefit of such Persons or the Holder, either during his or her lifetime or on death by will or intestacy; provided that (i) any such transfer or assignment of Registrable Securities is effected in accordance with the terms of Section 2.8 hereof, and applicable securities laws; (ii) the Company is given written notice prior to said transfer or assignment, stating the name and address of the transferee or assignee and identifying the securities with respect to which such registration rights are intended to be transferred or assigned; (iii) the transferee or assignee of such rights assumes in writing the obligations of such Holder under this Agreement, including without limitation the obligations set forth in Section 2.10; and (iv) any such transferee is not engaged in direct competition with the Company as reasonably determined by the Board of Directors of the Company. The rights to cause the Company to register securities granted to the Key Employee (in his capacity as such, and not in his capacity as an Investor, if applicable) by the Company under this Section may not be transferred or assigned.

 

2.13.                     Limitations on Subsequent Registration Rights.  From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders holding a majority of the Registrable Securities, enter into any agreement with any holder or prospective

 

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holder of any securities of the Company giving such holder or prospective holder any registration rights the terms of which are pari passu with or senior to, equal to or more favorable than the registration rights granted to the Holders hereunder.

 

2.14.                     Termination of Registration Rights.  The right of any Holder or the Key Employee to request registration or inclusion in any registration pursuant to Section 2.1, 2.2 or 2.3 shall terminate on the earlier of (i) the date on which such Holder or the Key Employee holds no Subject Securities; and (ii) five (5) years after the closing of the Company’s Initial Public Offering.

 

3.                                      Covenants of the Company.  The Company hereby covenants and agrees with the Investors, as follows:

 

3.1.                            Basic Financial Information.  The Company shall deliver, upon request, to each Major Investor the following financial information:

 

(a)                                 as soon as practicable, but in any event within 90 days after the end of each fiscal year of the Company, an income statement for such fiscal year, a balance sheet of the Company and statement of stockholder’s equity as of the end of such year, and a statement of cash flows for such year, such year-end financial reports to be in reasonable detail, prepared in accordance with generally accepted accounting principles (“GAAP”), setting forth in each case comparisons to the corresponding period in the preceding fiscal year, and audited and certified by an independent public accounting firm of nationally recognized standing selected by the Company;

 

(b)                                 as soon as practicable, but in any event within 30 days after the end of each of the first three quarters of each fiscal year of the Company, an unaudited profit or loss statement, a statement of cash flows for such fiscal quarter and an unaudited balance sheet as of the end of such fiscal quarter prepared in accordance with GAAP consistently applied with prior practice for earlier periods (with the exception of footnotes that may be required by GAAP) and which shall fairly present the financial condition of the Company and its results of operation for the period specified, subject to year-end audit adjustment, setting forth in each case comparisons to the Company’s annual budget and to the corresponding period in the preceding fiscal year;

 

(c)                                  as soon as practicable, but in any event within 20 days after the end of each month (other than a month that ends on or about the last day of a quarterly accounting period of the Company), for such month and for a period from the beginning of the fiscal year to the end of such month, an unaudited profit or loss statement, a statement of cash flows and an unaudited balance sheet prepared in accordance with GAAP consistently applied with prior practice for earlier periods (with the exception of footnotes that may be required by GAAP) and which shall fairly present the financial condition of the Company and its results of operation for the period specified, setting forth in each case comparisons to the Company’s annual budget and to the corresponding period in the preceding fiscal year, subject to year-end audit adjustment;

 

(d)                                 as soon as practicable, but in any event within 30 days prior to the commencement of each new fiscal year of the Company, an annual comprehensive operating

 

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budget forecasting the Company’s revenues, expenses, and cash positions on a month-to-month basis for the upcoming fiscal year; and

 

(e)                                  promptly following the end of each quarter, an up-to-date capitalization table, certified by the Chief Financial Officer of the Company.

 

3.2.                            Inspection Rights.  The Company will afford to each Major Investor and any authorized representative of such Major Investor reasonable access during normal business hours and with reasonable advance notification to all of the Company’s facilities and personnel. Major Investors may exercise their rights under this Section 3.2 only for purposes reasonably related to their interests as a stockholder. The rights granted pursuant to this Section 3.2 may not be assigned or otherwise conveyed by any Major Investor.

 

3.3.                            Confidentiality.  Anything in this Agreement to the contrary notwithstanding, no Holder by reason of this Agreement shall have access to any trade secrets or classified information of the Company. The Company shall not be required to comply with any information rights or inspection rights pursuant to this Section 3 in respect of any Holder whom the Board of Directors of the Company reasonably determines to be a competitor of the Company. The Company shall not be obligated to disclose details of contracts with, or work performed for, specific customers and other business partners where to do so would violate confidentiality obligations to those parties. Each Holder agrees that it will not use any information received by it pursuant to this Agreement in violation of the Exchange Act or reproduce, disclose or disseminate such information to any other person (other than its employees, agents or partners having a need to know the contents of such information), except in connection with the exercise of rights under this Agreement, unless the Company has made such information available to the public generally.

 

3.4.                            Termination of Covenants.  The covenants set forth in this Section 3 shall terminate and be of no further force and effect after (a) the closing of the Company’s Initial Public Offering or (b) the closing of an acquisition of the Company by another entity by means of any transaction or series of related transactions to which the Company is a party (including, without limitation, any stock acquisition, reorganization, merger or consolidation but excluding any sale of stock for capital raising purposes) other than a transaction or series of transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction continue to retain (either by such voting securities remaining outstanding or by such voting securities being converted into voting securities of the surviving entity), as a result of shares in the Company held by such holders prior to such transaction, more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such transaction or series of transactions; or (c) the closing of a sale, lease or other conveyance of all or substantially all of the assets of the Company.

 

4.                                      Right of First Refusal.

 

4.1.                            Right of First Refusal to Investors.  The Company hereby grants to each Investor the right of first refusal to purchase its pro rata share of New Securities (as defined in Section 4.1(a)), which the Company may, from time to time, propose to sell and issue after the date of

 

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this Agreement. A Preferred Holder’s pro rata share, for purposes of this right of first refusal, is equal to the ratio of (A) the number of shares of Common Stock owned by such Investor on the date hereof (assuming full conversion of the Preferred Stock and exercise of all outstanding convertible securities, rights, options and warrants, directly or indirectly, into Common Stock held by said Holder) to (B) the total number of shares of Common Stock outstanding on the date hereof (assuming full conversion of the Preferred Stock and exercise of all outstanding convertible securities, rights, options and warrants, directly or indirectly, into Common Stock). For purposes of the immediately preceding sentence of this Section 4.1, an Investor includes any general partner, managing member and Affiliates (including Affiliated Funds) of an Investor. An Investor who chooses to exercise the right of first refusal may designate as purchasers under such right itself and/or its partners or Affiliates (including Affiliated Funds), in such proportions as it deems appropriate.

 

(a)                                 “New Securities” shall mean any capital stock (including Common Stock and/or Preferred Stock) of the Company whether now authorized or not, and rights, convertible securities, options or warrants to purchase such capital stock, and securities of any type whatsoever that are, or may become, exercisable or convertible into capital stock; provided that the term “New Securities” does not include:

 

(i)                                     the Series A Preferred Conversion Stock, the Series B Preferred Conversion Stock, the Series B-1 Preferred Conversion Stock and the Series C Preferred Conversion Stock;

 

(ii)                                  securities issued or issuable to employees, officers or directors, of, or consultants or advisors to, the Company or any subsidiary pursuant to stock grants, option plans or similar arrangements approved by the Board of Directors of the Company;

 

(iii)                               securities issued upon the conversion or exercise of any outstanding convertible or exercisable securities as of this date of this Agreement;

 

(iv)                              securities issued or issuable as a dividend or distribution on Preferred Stock or pursuant to any event for which adjustment is made pursuant to Sections 4(e), (f) or (g) of the Fifth Amended and Restated Certificate of Incorporation of the Company;

 

(v)                                 securities offered pursuant to a registered public offering under the Securities Act in connection with which all outstanding shares of Preferred Stock are converted into Common Stock;

 

(vi)                              securities issued or issuable pursuant to the bona fide acquisition of another entity by the Company by merger, purchase of substantially all of the assets or other reorganization, which acquisition is approved by the Board of Directors of the Company;

 

(vii)                           securities issued or issuable to banks, equipment lessors or other financial institutions pursuant to a debt financing, equipment lease, bank credit arrangement or commercial leasing transaction entered into for primarily non-equity financing purposes and approved by the Board of Directors of the Company;

 

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(viii)                        securities of the Company which the Board of Directors of the Company unanimously determines shall be excluded from the definition of New Securities and which are not offered to any existing stockholder of the Company;

 

(ix)                              securities issued in connection with sponsored research, collaboration, technology license, development, distribution, marketing or other similar agreements or strategic partnerships entered into for primarily non-equity financing purposes and approved by the Board of Directors of the Company;

 

(x)                                 securities issued to suppliers or third party service providers in connection with the provision of goods or services pursuant to transactions approved by the Board of Directors of the Company;

 

(xi)                              securities issued with the prior written waiver of the holders of at least two-thirds of the outstanding shares of Preferred Stock (voting together as a single class); and (xii) securities issued or issuable upon conversion or exercise of any of the foregoing.

 

(b)                                 In the event the Company proposes to undertake an issuance of New Securities, it shall give each Investor written notice of its intention, describing the type of New Securities, their price and the general terms upon which the Company proposes to issue the same. Each Investor shall have twenty (20) days after receipt of such notice to agree to purchase such Investor’s pro rata share of such New Securities for the price and upon the terms specified in the notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased, provided that, if an Investor elects not to purchase its pro rata share of the New Securities pursuant to this Section 4.1, the Company shall promptly notify, in writing, the remaining Investors and offer each such Investor the right to acquire its pro rata share of such unsubscribed New Securities. The Investors shall have ten (10) days following receipt of such notice from the Company to notify the Company of their election to purchase their pro rata share of all or a portion of the unsubscribed New Securities.

 

(c)                                  In the event the Investors fail to exercise fully the right of first refusal within said twenty (20) day period and, if applicable, said ten (10) day period (the “Election Period”), the Company shall have ninety (90) days thereafter to sell or enter into an agreement (pursuant to which the sale of New Securities covered thereby shall be closed, if at all, within ninety (90) days from the date of said agreement) to sell that portion of the New Securities with respect to which the Investors’ right of first refusal option set forth in this Section 4.1 was not exercised, at a price and upon terms no more favorable to the purchasers thereof than specified in the Company’s notice to Investors delivered pursuant to Section 4.1(b). In the event the Company has not sold within such ninety (90) day period following the Election Period, or such ninety (90) day period following the date of said agreement, the Company shall not thereafter issue or sell any New Securities without first again offering such securities to the Investors in the manner provided in this Section 4.1.

 

(d)                                 The right of first refusal granted under this Agreement shall expire upon, and shall not be applicable to, the Company’s Initial Public Offering.

 

22

 

5.                                      Miscellaneous.

 

5.1.                            Amendment.  Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument referencing this Agreement and signed by the Company and the Holders holding a majority of the Registrable Securities (excluding any of such shares that have been sold pursuant to a registration statement or pursuant to Rule 144). Any such amendment, waiver, discharge or termination effected in accordance with this paragraph shall be binding upon each Holder and each future holder of any securities of such Holder. Each Holder and the Key Employee acknowledges that by the operation of this paragraph, the Holders of a majority of the Registrable Securities (excluding any of such shares that have been sold pursuant to a registration statement or pursuant to Rule 144) will have the right and power to diminish or eliminate all rights of such Holder or the Key Employee under this Agreement, but only in a manner affecting all such Holders and, in the case of Section 2, the Key Employee, equally.

 

5.2.                            Notices.  All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail (if delivered in the United States) or internationally recognized express courier (if delivered internationally), in either case postage prepaid, sent by facsimile or electronic mail or otherwise delivered by hand or by messenger addressed:

 

(a)                                 if to an Investor, at the Investor’s address, facsimile number or electronic mail address as shown in the Company’s records, as the same may be updated in accordance with the provisions hereof;

 

(b)                                 if to any Holder or the Key Employee, at such address, facsimile number or electronic mail address as shown in the Company’s records, or, until any such holder so furnishes an address, facsimile number or electronic mail address to the Company, then to and at the address of the last holder of such shares for which the Company has contact information in its records; or

 

(c)                                  if to the Company, one copy should be sent to Eagle Pharmaceuticals, Inc., 470 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07677, Attention: Scott L. Tarriff, President and Chief Executive Officer, or at such other address as the Company shall have furnished to the Investors, with a copy to Orrick, Herrington & Sutcliffe LLP, 51 West 52nd Street, New York, New York 10019, Attention: R. King Milling, Esq.

 

Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given when delivered if delivered personally, or, if sent by mail within the United States, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid or, if sent internationally, at the earlier of its receipt or three business days after the same has been sent by internationally recognized express courier, addressed and delivered as aforesaid or, if sent by facsimile, upon confirmation of facsimile transfer or, if sent by electronic mail, upon confirmation of delivery when directed to the electronic mail address shown in the Company’s records.

 

5.3.                            Governing Law.  This Agreement shall be governed in all respects by the internal laws of the State of Delaware, without regard to principles of conflicts of law.

 

23

 

5.4.                            Successors and Assigns.  Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of Registrable Securities from time to time; provided that prior to the receipt by the Company of adequate written notice of the transfer of any Registrable Securities specifying the full name and address of the transferee, the Company may deem and treat the person listed as the holder of such shares in its records as the absolute owner and holder of such shares for all purposes, including the payment of dividends or any redemption price.

 

5.5.                            Entire Agreement.  This Agreement and the exhibits hereto constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and supersedes all prior written or oral agreements and understandings relating to such subject matter. No party hereto shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof by any warranties, representations or covenants except as specifically set forth herein.

 

5.6.                            Delays or Omissions.  Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party to this Agreement upon any breach or default of any other party under this Agreement shall impair any such right, power or remedy of such non-defaulting party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement, shall be cumulative and not alternative.

 

5.7.                            Severability.  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision. The balance of this Agreement shall be enforceable in accordance with its terms.

 

5.8.                            Titles and Subtitles.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. All references in this Agreement to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.

 

5.9.                            Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties that execute such counterparts, and all of which together shall constitute one instrument.

 

24

 

5.10.                     Telecopy Execution and Delivery.  A facsimile, telecopy or other reproduction of this Agreement may be executed by one or more parties hereto and delivered by such party by facsimile or any similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen. Such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to execute and deliver an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

 

5.11.                     Further Assurances.  Each party hereto agrees to execute and deliver, by the proper exercise of its corporate, limited liability company, partnership or other powers, all such other and additional instruments and documents and do all such other acts and things as may be necessary to more fully effectuate this Agreement.

 

5.12.                     Affiliated Funds or Aggregation of Stock.  All shares of Common Stock and Preferred Stock held or acquired by Affiliated funds or Affiliated Persons or Persons under common investment management or control shall be aggregated together for the purpose of determining the availability of any rights or obligations under this Agreement. Additionally, for any Holder that is a partnership, corporation or limited liability company, the general partner, limited partners, retired partners, shareholders, members, retired members and Affiliates of such Holder, or the members or retired members of the foregoing, as applicable, or the estates, beneficiaries and family members of any such general partner, limited partners, retired partners, shareholders, members, and retired members and any trusts for the benefit of any of the foregoing Persons shall be deemed to be a single “Holder,” and any pro rata reductions pursuant to Section 2.1 or 2.3 with respect to such Holder shall be based upon the aggregate amount of Registrable Securities owned by all Persons included in such “Holder,” as defined in this Section 5.12.

 

[Remainder of Page Intentionally Left Blank]

 

25

 

IN WITNESS WHEREOF, the parties hereto have executed this Third Amended and Restated Investor Rights Agreement as of the date first above written.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
EAGLE   PHARMACEUTICALS,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Scott L. Tarriff
    
	
 
    	
 
    	
Scott   Tarriff, President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
KEY   EMPOYEE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Scott L. Tarriff
    
	
 
    	
Scott   L. Tarriff
    
	
 
    	
 
    
	
 
    	
PREFERRED   HOLDERS:
    
	
 
    	
 
    
	
 
    	
PROQUEST   INVESTMENTS IV, L.P.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Pasquale DeAngelis
    
	
 
    	
 
    	
Name:
    	
Pasquale   DeAngelis
    
	
 
    	
 
    	
Title:
    	
Managing   member of the General Partner
    
	
 
    	
 
    
	
 
    	
PROQUEST   MANAGEMENT, LLC DBPP FBO JAY MOORIN
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Pasquale DeAngelis
    
	
 
    	
 
    	
Name:
    	
Pasquale   DeAngelis
    
	
 
    	
 
    	
Title:
    	
Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PROQUEST   MANAGEMENT, LLC SALARY SAVING PLAN FRO JAY MOORIN
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Pasquale DeAngelis
    
	
 
    	
 
    	
Name:
    	
Pasquale   DeAngelis
    
	
 
    	
 
    	
Title:
    	
Trustee
    

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Third Amended and Restated Investor Rights Agreement as of the date first above written.

 

	
 
    	
PREFERRED   HOLDERS:
    
	
 
    	
 
    
	
 
    	
PROQUEST   MANAGEMENT, LLC SALARY SAVING PLAN FBO JEE SHIN
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Pasquale DeAngelis
    
	
 
    	
 
    	
Name:
    	
Pasquale   DeAngelis
    
	
 
    	
 
    	
Title:
    	
Trustee
    
	
 
    	
 
    
	
 
    	
PROQUEST   MANAGEMENT LLC SALARY SAVING PLAN FBO JOYCE TSAN
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Pasquale DeAngelis
    
	
 
    	
 
    	
Name:
    	
Pasquale   DeAngelis
    
	
 
    	
 
    	
Title:
    	
Trustee
    
	
 
    	
 
    
	
 
    	
PROQUEST   MANAGEMENT, LLC SALARY SAVING PLAN FBO PASQUALE DEANGELIS
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Pasquale DeAngelis
    
	
 
    	
 
    	
Name:
    	
Pasquale   DeAngelis
    
	
 
    	
 
    	
Title:
    	
Trustee
    
	
 
    	
 
    
	
 
    	
INVESTOR:
    
	
 
    	
 
    
	
 
    	
JAFCO   Super V3 Investment Limited Partnership
    
	
 
    	
 
    
	
 
    	
By:
    	
JAFCO   Co., Ltd.
    
	
 
    	
Its:
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Shinichi Fuki
    
	
 
    	
 
    	
Name:
    	
Shinichi   Fuki
    
	
 
    	
 
    	
Title:   
    	
President   and CEO of JAFCO Co., Ltd.
    

 

 

EXHIBIT A

 

SCHEDULE OF INVESTORS

 

Series A Holders:

 

ProQuest Investments IV, L.P.

Scott L. Tarriff

Deerfield Special Situations Fund International, Limited

Deerfield Special Situations Fund, LP

E*Trade Clearing LLC Custodian FBO Ira M Lechner Roth IRA

Timothy D. Coan Series

 

Series B Holders:

 

ProQuest Investments IV, L.P.

General Electric Pension Trust

Jennison Health Sciences Fund

Sander Flaum

 

Series B-1 Holders:

 

ProQuest Investments IV, L.P.

ProQuest Management, LLC DBPP FBO Jay Moorin

ProQuest Management, LLC Salary Savings Plan FBO Jay Moorin

ProQuest Management, LLC Salary Savings Plan FBO Pasquale DeAngelis

ProQuest Management, LLC Salary Savings Plan FBO Joyce Tsang

ProQuest Management, LLC Salary Savings Plan FBO Jee Shin

Deerfield Special Situations Fund International, Limited

Deerfield Special Situations Fund, LP

Ira M. Lechner Roth IRA, E-Trade as Custodian

Timothy D. Coan

Prudential Jennison Health Sciences Fund f/k/a Jennison Health Sciences Fund

General Electric Pension Trust

Sander Flaum

Steven Ratoff

 

Series C Holders:

 

JAFCO Super V3 Investment Limited Partnership

ProQuest Investments IV, L.P.

ProQuest Management, LLC DBPP FBO Jay Moorin

ProQuest Management, LLC Salary Savings Plan FBO Jay Moorin

ProQuest Management, LLC Salary Savings Plan FBO Jee Shin

ProQuest Management, LLC Salary Savings Plan FBO Joyce Tsang

ProQuest Management, LLC Salary Savings Plan FBO Pasquale DeAngelis

Deerfield Special Situations Fund, LP

Deerfield Special Situations Fund International, Limited

 

 

Hare & Co. as Nominee for Jennison Health Sciences Fund

General Electric Pension Trust

Scott L. Tarriff

Steven Ratoff

Ira M. Lechner & Winifred E. Haag Family Trust

Timothy D. Coan

Sander Flaum

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