Document:

exh4-1_4130412.htm

EXHIBIT 4.1

 

EXECUTION COPY

 

 

 

 

CINEDIGM CORP.

 

 

and

 

 

U.S. BANK NATIONAL ASSOCIATION

 

as Trustee

 

 

INDENTURE

 

 

Dated as of April 29, 2015

 

 

5.5% Convertible Senior Notes due 2035

 

 

 

 

 

 

 

  

  

  

 

	 	 TABLE OF CONTENTS	 
	 	 	 
	 	 	 Page
	 	 	 
	  	
ARTICLE I

DEFINITIONS

	  
	  	  	  
	
Section 1.01

	
Definitions

	
1

	
Section 1.02

	
References to Interest

	
14

	  	  	  
	  	
ARTICLE II

ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

	  
	  	  	  
	
Section 2.01

	
Designation and Amount

	
14

	
Section 2.02

	
Form of Notes

	
14

	
Section 2.03

	
Date and Denomination of Notes; Payments of Interest and Defaulted Amounts

	
15

	
Section 2.04

	
Execution, Authentication and Delivery of Notes

	
16

	
Section 2.05

	
Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary

	
17

	
Section 2.06

	
Mutilated, Destroyed, Lost or Stolen Notes

	
23

	
Section 2.07

	
Temporary Notes

	
24

	
Section 2.08

	
Cancellation of Notes Paid, Converted, Etc.

	
25

	
Section 2.09

	
CUSIP Numbers

	
25

	
Section 2.10

	
Additional Notes; Repurchases

	
25

	  	  	  
	  	
ARTICLE III

SATISFACTION AND DISCHARGE

	  
	  	  	  
	
Section 3.01

	
Satisfaction and Discharge

	
26

	  	  	  
	  	
ARTICLE IV

PARTICULAR COVENANTS OF THE COMPANY

	  
	  	  	  
	
Section 4.01

	
Payment of Principal and Interest

	
26

	
Section 4.02

	
Maintenance of Office or Agency

	
27

	
Section 4.03

	
Appointments to Fill Vacancies in Trustee’s Office

	
27

	
Section 4.04

	
Provisions as to Paying Agent

	
27

	
Section 4.05

	
Existence

	
29

	
Section 4.06

	
Rule 144A Information Requirement and Annual Reports

	
29

	
Section 4.07

	
Stay, Extension and Usury Laws

	
30

	
Section 4.08

	
Compliance Certificate; Statements as to Defaults

	
31

	
Section 4.09

	
Further Instruments and Acts

	
31

	
Section 4.10

	
Limitation on Intercompany Indebtedness

	
31

	
Section 4.11

	
Limitation on Investments

	
31

	
Section 4.12

	
Limitation on Transactions with Affiliates

	
31

	  	  	  

  

i

  

 

	  	
ARTICLE V

LISTS OF HOLDERS AND REPORTS BY THE COMPANY AND THE TRUSTEE

	  
	  	  	  
	
Section 5.01

	
Lists of Holders

	
31

	
Section 5.02

	
Preservation and Disclosure of Lists

	
32

	  	  	  
	  	
ARTICLE VI

DEFAULTS AND REMEDIES

	  
	  	  	  
	
Section 6.01

	
Events of Default

	
32

	
Section 6.02

	
Acceleration; Rescission and Annulment

	
33

	
Section 6.03

	
Additional Interest in Lieu of Reporting Default

	
34

	
Section 6.04

	
Payments of Notes on Default; Suit Therefor

	
35

	
Section 6.05

	
Application of Monies Collected by Trustee

	
36

	
Section 6.06

	
Proceedings by Holders

	
37

	
Section 6.07

	
Proceedings by Trustee

	
38

	
Section 6.08

	
Remedies Cumulative and Continuing

	
38

	
Section 6.09

	
Direction of Proceedings and Waiver of Defaults by Majority of Holders

	
38

	
Section 6.10

	
Notice of Defaults

	
39

	
Section 6.11

	
Undertaking to Pay Costs

	
39

	  	  	  
	  	
ARTICLE VII

CONCERNING THE TRUSTEE

	  
	  	  	  
	
Section 7.01

	
Duties and Responsibilities of Trustee

	
40

	
Section 7.02

	
Reliance on Documents, Opinions, Etc.

	
41

	
Section 7.03

	
No Responsibility for Recitals, Etc.

	
43

	
Section 7.04

	
Trustee, Paying Agents, Conversion Agents or Note Registrar May Own Notes

	
43

	
Section 7.05

	
Monies and Shares of Common Stock to Be Held in Trust

	
43

	
Section 7.06

	
Compensation and Expenses of Trustee

	
43

	
Section 7.07

	
Officer’s Certificate as Evidence

	
44

	
Section 7.08

	
Eligibility of Trustee

	
44

	
Section 7.09

	
Resignation or Removal of Trustee

	
44

	
Section 7.10

	
Acceptance by Successor Trustee

	
45

	
Section 7.11

	
Succession by Merger, Etc.

	
46

	
Section 7.12

	
Trustee’s Application for Instructions from the Company

	
46

	  	  	  
	  	
ARTICLE VIII

CONCERNING THE HOLDERS

	  
	  	  	  
	
Section 8.01

	
Action by Holders

	
47

	
Section 8.02

	
Proof of Execution by Holders

	
47

	
Section 8.03

	
Who Are Deemed Absolute Owners

	
47

	
Section 8.04

	
Company-Owned Notes Disregarded

	
48

	
Section 8.05

	
Revocation of Consents; Future Holders Bound

	
48

	  	  	  

  

ii

  

 

	  	
ARTICLE IX

HOLDERS’ MEETINGS

	  
	  	  	  
	
Section 9.01

	
Purpose of Meetings

	
48

	
Section 9.02

	
Call of Meetings by Trustee

	
49

	
Section 9.03

	
Call of Meetings by Company or Holders

	
49

	
Section 9.04

	
Qualifications for Voting

	
49

	
Section 9.05

	
Regulations

	
50

	
Section 9.06

	
Voting

	
50

	
Section 9.07

	
No Delay of Rights by Meeting

	
50

	  	  	  
	  	
ARTICLE X

SUPPLEMENTAL INDENTURES

	  
	  	  	  
	
Section 10.01

	
Supplemental Indentures Without Consent of Holders

	
51

	
Section 10.02

	
Supplemental Indentures with Consent of Holders

	
52

	
Section 10.03

	
Effect of Supplemental Indentures

	
53

	
Section 10.04

	
Notation on Notes

	
53

	
Section 10.05

	
Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee

	
53

	  	  	  
	  	
ARTICLE XI

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

	  
	  	  	  
	
Section 11.01

	
Company May Consolidate, Etc. on Certain Terms

	
54

	
Section 11.02

	
Successor Corporation to Be Substituted

	
54

	
Section 11.03

	
Evidence to Be Given to Trustee

	
55

	  	  	  
	  	
ARTICLE XII

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

	  
	  	  	  
	
Section 12.01

	
Indenture and Notes Solely Corporate Obligations

	
55

	  	  	  
	  	
ARTICLE XIII

CONVERSION OF NOTES

	  
	  	  	  
	
Section 13.01

	
Conversion Privilege

	
55

	
Section 13.02

	
Conversion Procedure; Settlement Upon Conversion

	
56

	
Section 13.03

	
Ownership Limit

	
58

	
Section 13.04

	
Increased Conversion Rate Applicable to Certain Notes Surrendered in Connection with Make-Whole Fundamental Change or during a Redemption Period

	
58

	
Section 13.05

	
Adjustment of Conversion Rate

	
61

	
Section 13.06

	
Adjustments of Prices

	
70

	
Section 13.07

	
Shares to Be Reserved

	
70

	
Section 13.08

	
Effect of Recapitalizations, Reclassifications and Changes of the Common Stock

	
70

  

iii

  

	
Section 13.09

	
Certain Covenants

	
72

	
Section 13.10

	
Responsibility of Trustee

	
73

	
Section 13.11

	
Stockholder Rights Plans

	
73

	
Section 13.12

	
Notice to Holders Prior to Certain Actions

	
74

	  	  	  
	  	
ARTICLE XIV

REPURCHASE OF NOTES AT OPTION OF HOLDERS

	  
	  	  	  
	
Section 14.01

	
Repurchase at Option of Holders Upon a Fundamental Change

	
74

	
Section 14.02

	
Repurchase at Option of Holders on Specified Repurchase Dates

	
75

	
Section 14.03

	
Repurchase Procedures

	
76

	
Section 14.04

	
Withdrawal of Fundamental Change Repurchase Notice or Specified Repurchase Date Notice

	
78

	
Section 14.05

	
Deposit of Fundamental Change Repurchase Price and Specified Repurchase Date Price

	
78

	
Section 14.06

	
Covenant to Comply with Applicable Laws Upon Repurchase of Notes

	
79

	  	  	  
	  	
ARTICLE XV

OPTIONAL REDEMPTION

	  
	  	  	  
	
Section 15.01

	
Optional Redemption

	
80

	
Section 15.02

	
Notice of Optional Redemption; Selection of Notes

	
80

	
Section 15.03

	
Payment of Notes Called for Redemption

	
81

	
Section 15.04

	
Restrictions on Redemption

	
82

	  	  	  
	  	
ARTICLE XVI

MISCELLANEOUS PROVISIONS

	  
	  	  	  
	
Section 16.01

	
Provisions Binding on Company’s Successors

	
82

	
Section 16.02

	
Official Acts by Successor Corporation

	
82

	
Section 16.03

	
Addresses for Notices, Etc.

	
82

	
Section 16.04

	
Governing Law

	
83

	
Section 16.05

	
Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee

	
84

	
Section 16.06

	
Legal Holidays

	
84

	
Section 16.07

	
No Security Interest Created

	
84

	
Section 16.08

	
Benefits of Indenture

	
84

	
Section 16.09

	
Table of Contents, Headings, Etc.

	
84

	
Section 16.10

	
Authenticating Agent

	
85

	
Section 16.11

	
Execution in Counterparts

	
86

	
Section 16.12

	
Severability

	
86

	
Section 16.13

	
Waiver of Jury Trial

	
86

	
Section 16.14

	
Force Majeure

	
86

	
Section 16.15

	
Calculations

	
86

	
Section 16.16

	
USA PATRIOT Act

	
86

	  	  	  

  

iv

  

 

	  	
EXHIBIT

	  
	  	  	  
	
Exhibit A

	
Form of Note

	
A-1

	
Exhibit B

	
Free Transferability Certificate

	
B-1

 

 

  

v

  

INDENTURE, dated as of April 29, 2015, between CINEDIGM CORP., a Delaware corporation, as issuer (the “Company,” as more fully set forth in Section 1.01), and U.S. Bank National Association, a national banking association, as trustee (the “Trustee,” as more fully set forth in Section 1.01).

 

W I T N E S S E T H:

 

WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issuance of its 5.5% Convertible Senior Notes due 2035 (the “Notes”), initially in an aggregate principal amount not to exceed $64,000,000, and in order to provide the terms and conditions upon which the Notes are to be authenticated, issued and delivered, the Company has duly authorized the execution and delivery of this Indenture;

 

WHEREAS, the Form of Note, the certificate of authentication to be borne by each Note, the Form of Notice of Conversion, the Form of Fundamental Change Repurchase Notice, the Form of Specified Repurchase Date Notice and the Form of Assignment and Transfer to be borne by the Notes are to be substantially in the forms hereinafter provided; and

 

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

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

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

 

ARTICLE I

Definitions

 

Section 1.01   Definitions.  The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01.  The words “herein,” “hereof,” “hereunder,” and words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.  The terms defined in this Article include the plural as well as the singular.

 

“Additional Interest” means all amounts, if any, payable pursuant to Section 4.06(d), Section 4.06(e) and Section 6.03, as applicable.

 

“Additional Shares” shall have the meaning specified in Section 13.04(a).

 

  

  

  

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

 

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

 

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors, and to be in full force and effect on the date of such certification.

 

“Business Day” means, with respect to any Note, any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.

 

“Capital Lease” means, with respect to any Person, any lease of, or other arrangement conveying the right to use, any property (whether real, personal or mixed) by such Person as lessee that has been or is required to be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.

 

“Capitalized Lease Obligations” means, at any time, with respect to any Capital Lease, any lease entered into as part of any sale and leaseback transaction or any synthetic lease of any Person, the amount of all obligations of such Person that is (or that would be required to be, if such synthetic lease or other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such Person prepared in accordance with GAAP.

 

“Capital Stock” means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity; provided that solely for the definition of Equity Interests, “Capital Stock” means:

 

(a) in the case of a corporation, corporate stock;

 

(b) in the case of an association or business entity, any and all shares, interests, participations or rights (however designated) that are the equivalent of corporate stock;

 

(c) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and

 

(d) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

“Cinedigm Digital Funding I, LLC Credit Agreement” means the Amended and Restated Credit Agreement, dated as of February 28, 2013, among Cinedigm Digital Funding I, LLC, the Lenders party thereto and Société Générale, New York Branch, as administrative agent and collateral agent for the lenders and secured parties thereto.

 

  

2

  

“Clause A Distribution” shall have the meaning specified in Section 13.05(c).

 

“Clause B Distribution” shall have the meaning specified in Section 13.05(c).

 

“Clause C Distribution” shall have the meaning specified in Section 13.05(c).

 

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

 

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

 

“Commission” means the U.S. Securities and Exchange Commission or any successor thereto.

 

“Common Equity” of any Person means Capital Stock of such Person that is generally entitled (a) to vote in the election of directors of such Person or (b) if such Person is not a corporation, to vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.

 

“Common Stock” means the Class A common stock of the Company, par value $0.001 per share, at the date of this Indenture, subject to Section 13.08.

 

“Company” shall have the meaning specified in the first paragraph of this Indenture, and subject to the provisions of Article XI, shall include its successors and assigns.

 

“Company Order” means a written order of the Company, signed by one of its Officers.

 

“Conversion Agent” shall have the meaning specified in Section 4.02.

 

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

 

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

 

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

 

“Conversion Rate” shall have the meaning specified in 13.01.

 

“Corporate Trust Office” means the designated office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at U.S. Bank National Association, 190 S. LaSalle Street, 10th Floor, MK-IL-SLTR, Chicago, Illinois 60603, Attention: Global Corporate Trust, with respect to presentation of Notes for exchange or registration of transfer, U.S. Bank National Association, 60 Livingston Avenue, St. Paul, Minnesota 55107, Attention: Global Corporate Trust or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the designated corporate trust office of any successor trustee (or such other address as such successor trustee may designate from time to time by notice to the Holders and the Company).

 

“Custodian” means the Trustee, as custodian for DTC, with respect to the Global Notes, or any successor entity thereto.

 

  

3

  

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

 

“Defaulted Amounts” means any amounts on any Note (including, without limitation, the Fundamental Change Repurchase Price, the Specified Repurchase Date Price, the Redemption Price, principal and interest) that are payable but are not punctually paid or duly provided for.

 

“Depositary” means, with respect to each Global Note, the Person specified in Section 2.05(c) as the Depositary with respect to such Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter,

 

“Depositary” shall mean or include such successor.

 

“Distributed Property” shall have the meaning specified in Section 13.05(c).

 

“DTC” means The Depository Trust Company, a New York corporation.

 

“Effective Date” shall have the meaning specified in Section 13.04(c); provided that, solely for purposes of Section 13.05, “Effective Date” means the first date on which shares of Common Stock trade on the applicable exchange or in the applicable market, regular way, reflecting the relevant share split or share combination, as applicable.

 

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (including any debt security that is convertible into, or exchangeable for, Capital Stock).

 

“Events of Default” shall have the meaning specified in Section 6.01.

 

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

 

“Ex-Dividend Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question, from the Company or, if applicable, from the seller of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.

 

“Free Trade Date” means the date that is one year after the last date of original issuance of the Notes.

 

“Form of Assignment and Transfer” means the “Form of Assignment and Transfer” attached as Attachment 4 to the Form of Note attached hereto as Exhibit A.

 

“Form of Fundamental Change Repurchase Notice” means the “Form of Fundamental Change Repurchase Notice” attached as Attachment 2 to the form of Note attached hereto as Exhibit A.

 

“Form of Note” means the “Form of Note” attached hereto as Exhibit A.

 

  

4

  

“Form of Notice of Conversion” means the “Form of Notice of Conversion” attached as Attachment 1 to the Form of Note attached hereto as Exhibit A.

 

“Form of Specified Repurchase Date Notice” means the “Form of Specified Repurchase Date Notice” attached as Attachment 3 to the form of Note attached hereto as Exhibit A.

 

“Free Transferability Certificate” shall mean the “Free Transferability Certificate” attached hereto as Exhibit B.

 

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

 

(a)           a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than the Company, its Wholly Owned Subsidiaries, the employee benefit plans of the Company and its Wholly Owned Subsidiaries, has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s Common Equity representing more than 50% of the voting power of the Company’s Common Equity;

 

(b)           the consummation of (A) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination or changes in par value) as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets; (B) any share exchange, consolidation or merger of the Company pursuant to which the Common Stock will be converted into cash, other securities or other property or assets; or (C) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one of the Company’s Wholly Owned Subsidiaries; provided, however, that a transaction described in clause (B) in which the holders of all classes of the Company’s Common Equity immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of Common Equity of the continuing or surviving corporation or transferee or the parent thereof immediately after such transaction in substantially the same proportions as such ownership immediately prior to such transaction shall not be a Fundamental Change pursuant to this clause (b);

 

(c)           the holders of the Company’s Common Stock or, if no approval from the holders of the Company’s Common Stock is necessary, the Company’s Board of Directors approves any plan or proposal for the liquidation or dissolution of the Company; or

 

(d)           the Common Stock (or other common stock underlying the Notes) ceases to be listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Market, The NASDAQ Global Select Market or The NASDAQ Capital Market (or any of their respective successors);

 

provided, however, that a transaction or transactions described in clause (a) or (b) of this definition of “Fundamental Change” shall not constitute a Fundamental Change if at least 90% of 

 

  

5

  

the consideration received or to be received by the common stockholders of the Company, excluding cash payments for fractional shares or pursuant to dissenters’ rights, in connection with such transaction or transactions consists of shares of common stock that are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global Market, The NASDAQ Global Select Market or The NASDAQ Capital Market (or any of their respective successors) or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions and as a result of such transaction or transactions, the Notes become convertible into such consideration, excluding cash payments for fractional shares or pursuant to dissenters’ rights in accordance with Section 13.08 and subject to the provisions of Section 13.02(a). For purposes of this definition of “Fundamental Change,” any transaction that constitutes a “Fundamental Change” pursuant to both clause (a) and clause (b) of such definition shall be deemed a “Fundamental Change” solely under clause (b) of such definition.

 

“Fundamental Change Company Notice” shall have the meaning specified in Section 14.01(b).

 

“Fundamental Change Expiration Time” shall have the meaning specified in Section 14.03(a)(i).

 

“Fundamental Change Repurchase Date” shall have the meaning specified in Section 14.01(a).

 

“Fundamental Change Repurchase Notice” shall have the meaning specified in Section 14.03(a)(i).

 

“Fundamental Change Repurchase Price” shall have the meaning specified in Section 14.01(a).

 

“GAAP” means generally accepted accounting principles in the United States, as in effect from time to time, set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, in the statements and pronouncements of the Financial Accounting Standards Board and in such other statements by such other Person as may be in general use by significant segments of the accounting profession in the United States that are applicable to the circumstances as of the date of determination.

 

“Global Note” shall have the meaning specified in Section 2.05(b).

 

“Hedging Agreement” means any interest rate contract, foreign exchange, swap, option or forward contract, spot, cap, floor or collar transaction, any other derivative instrument, and any other similar transaction and any other similar agreement or arrangement designed to provide protection against fluctuations in any interest rate.

 

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

 

  

6

  

“Indebtedness” of any Person means, without duplication, any of the following, whether or not matured:

 

(a) all indebtedness for borrowed money;

 

(b) all obligations evidenced by notes, bonds, debentures or similar instruments;

 

(c) all reimbursement and other obligations with respect to (i) letters of credit (whether drawn or undrawn), bank guarantees or bankers’ acceptances or (ii) surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation) other than those entered into in the ordinary course of business;

 

(d) all obligations to pay the deferred purchase price of property or services, other than trade payables incurred in the ordinary course of business;

 

(e) all obligations created or arising under any conditional sale or other title retention agreement, regardless of whether the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property;

 

(f) all Capitalized Lease Obligations;

 

(g) all obligations, whether or not contingent, to purchase, redeem, retire, defease or otherwise acquire for value any of its own Equity Interests (or any Equity Interests of a direct or indirect parent entity thereof) prior to the date that is 180 calendar days after the maturity date of the notes;

 

(h) all payments that would be required to be made in respect of any Hedging Agreement in the event of a termination (including an early termination) on the date of determination; and

 

(i) all guarantees for obligations of any other Person constituting Indebtedness of such other Person;

 

provided, however, that the items in each of clauses (a) through (i) above shall constitute ‘‘Indebtedness’’ of such Person solely to the extent, directly or indirectly, (x) such Person is liable for any part of any such item, (y) any such item is secured by a Lien on such Person’s property or (z) any other Person has a right, contingent or otherwise, to cause such Person to become liable for any part of any such item or to grant such a Lien.

 

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

 

“Interest Payment Date” means each April 15 and October 15 of each year, beginning on October 15, 2015.

 

“Investment” means, with respect to any Person, all direct or indirect investments by such Person in other Persons in the forms of loans (including guarantees or other obligations), 

 

  

7

  

advances or capital contributions, purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are required to be classified as investments on a balance sheet prepared in accordance with GAAP.

 

“KBC Bank NV Credit Agreements” means collectively, the Credit Agreements entered into prior to the date hereof between KBC Bank NV and Access Digital Cinema Phase 2 B/AIX Corp.

 

“Last Reported Sale Price” of the Common Stock on any date means the closing sale price per share (or if no closing sale price is reported, the average of the last bid and last ask prices or, if more than one in either case, the average of the average last bid and the average last ask prices) on such date as reported in composite transactions for The NASDAQ Global Market, or if the Common Stock is not then listed on The NASDAQ Global Market, the principal U.S. national or regional securities exchange on which the Common Stock is traded.  If the Common Stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the “Last Reported Sale Price” shall be the average of the last quoted bid and ask prices per share for the Common Stock in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization.  If the Common Stock is not so quoted, the “Last Reported Sale Price” shall be the average of the mid-point of the last bid and ask prices per share for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose. The Last Reported Sale Price shall be determined without regard to after-hours trading or any other trading outside of regular trading session hours. On or after the occurrence of a Share Exchange Event, the “Last Reported Sale Price” of a unit of Reference Property on any date shall be determined in accordance with the four immediately preceding sentences except that (i) in the case of a Share Exchange Event in connection with which holders of Common Stock receive only cash as set forth in ‎Section 13.08(a), the “Last Reported Sale Price” shall be equal to the per share amount of cash received by holders of Common Stock in such Share Exchange Event, (ii) in the case of a Share Exchange Event in connection with which holders of Common Stock receive a type of consideration other than cash or common stock as set forth in ‎Section 13.08(a), the “Last Reported Sale Price” shall be the fair market value of such unit of Reference Property determined by a nationally recognized independent investment banking firm retained for this purpose by the Company and (iii) in the case of a Share Exchange Event in connection with which holders of Common Stock receive a combination of common stock, cash and/or a type of consideration of the kind described in clause (ii), the “Last Reported Sale Price” shall be equal to the sum of values of each component or portion of such unit of Reference Property determined in accordance with the four immediately preceding sentences, clause (i) and/or clause (ii), as the case may be.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), security interest or other security arrangement and any other preference, priority or preferential arrangement of any kind or nature whatsoever with respect to any asset, including any conditional sale contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.

 

  

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“Limited Recourse Guaranty Agreement” means the Limited Recourse Guaranty Agreement, dated as of February 28, 2013, made by Cinedigm Digital Cinema Corp. in favor of Prospect Capital Corporation, as Collateral Agent and as Administrative Agent, and any amendment, restatement, modification or refinancing thereof, provided that the terms of the agreement governing such amendment, restatement, modification or refinancing are not, in the good faith judgment of the Chief Financial Officer of the Company, materially worse to the Holders.

 

 “Make-Whole Fundamental Change” means any transaction or event that constitutes a Fundamental Change (as defined above and determined after giving effect to any exceptions to or exclusions from such definition, but without regard to the proviso in clause (b) of the definition thereof).

 

“Maturity Date” means April 15, 2035.

 

“Note” or “Notes” shall have the meaning specified in the first paragraph of the recitals of this Indenture.

 

“Note Register” shall have the meaning specified in Section 2.05(a).

 

“Note Registrar” shall have the meaning specified in Section 2.05(a).

 

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

 

“Notice of Redemption” shall have the meaning specified in Section 15.02(a).

 

“Offering Memorandum” means the preliminary offering memorandum dated April 23, 2015, as supplemented by the pricing term sheet dated April 23, 2015, relating to the offering and sale of the Notes.

 

“Officer” means, with respect to the Company, the Chief Executive Officer, the Chief Financial Officer, the President, the Treasurer, any Assistant Treasurer, the Secretary, any Assistant Secretary, any Executive or Senior Vice President or any Vice President (whether or not designated by a number or numbers or word or words added before or after the title “Vice President”).

 

“Officer’s Certificate,” when used with respect to the Company, means a certificate that is signed by an Officer of the Company.  Each such certificate shall include the statements provided for in Section 16.05 if and to the extent required by the provisions of such Section. The Officer giving an Officer’s Certificate pursuant to Section 4.08 shall be one of the principal executive, financial or accounting officers of the Company.

 

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

 

“Opinion of Counsel” means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company, which opinion may contain customary exceptions and qualifications as to the matters set forth therein.  Each such opinion shall include the statements provided for in Section 16.05 if and to the extent required by the provisions of such Section 16.05.

 

  

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“Optional Redemption” shall have the meaning specified in Section 15.01.

 

“outstanding,” when used with reference to Notes, shall, subject to the provisions of Section 8.04, mean, as of any particular time, all Notes authenticated and delivered by the Trustee under this Indenture, except:

 

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

 

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

 

(c)           Notes that have been paid pursuant to Section 2.06 or Notes in lieu of which, or in substitution for which, other Notes shall have been authenticated and delivered pursuant to the terms of Section 2.06 unless proof reasonably satisfactory to the Trustee is presented that any such Notes are held by protected purchasers in due course;

 

(d)           Notes converted pursuant to Article XIII and required to be cancelled pursuant to Section 2.08; and

 

(e)           Notes repurchased pursuant to the penultimate sentence of Section 2.10.

 

“Ownership Change” shall have the meaning assigned to it in Section 382.

 

“Paying Agent” shall have the meaning specified in Section 4.02.

 

 “Person” means an individual, a corporation, a limited liability company, an association, a partnership, a joint venture, a joint stock company, a trust, an unincorporated organization or a government or an agency or a political subdivision thereof; provided that for purposes of the definitions of Capital Lease, Capitalized Lease Obligations, Capital Stock, GAAP, Indebtedness and Investment, “Person” means any individual, partnership, corporation (including a business trust and a public benefit corporation), joint stock company, estate, association, firm, enterprise, trust, limited liability company, unincorporated association, joint venture, successors and assigns and any other entity.

 

“Phase 2 Credit Agreement” means, collectively, the Credit Agreement, dated as of October 18, 2011, among Cinedigm Digital Funding II, LLC, the  lenders party thereto and Société Générale, New York Branch as administrative agent and collateral agent for the lenders and secured parties thereto, the Multiparty Agreement dated as of October 18, 2011 among Cinema Digital Funding II, LLC, Access Digital Cinema Phase 2, Corp., CDF2 Holdings, LLC, the Company, each grantor from time to time party thereto, CHG-Meridian Finance U.S. Ltd., Société Générale, New York Branch, as collateral agent and administrative agent under the Senior Credit Documents (as defined therein), Ballantyne Strong, Inc. and the other approved 

 

  

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vendors from time to time parties thereto, and the Master Lease Agreement dated as of October 18, 2011 between CHG-Meridian Finance U.S. Ltd. and CDF2 Holdings, LLC.

“Physical Notes” means permanent certificated Notes in registered form issued in denominations of $1,000 principal amount and integral multiples thereof.

 

“Predecessor Note” of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 2.06 in lieu of or in exchange for a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note that it replaces.

 

“Prospect Capital Term Loan” means the term loan agreement, dated as of February 28, 2013, by and among Cinedigm DC Holdings, LLC, Access Digital Media, Inc., Access Digital Phase 2, Corp., the Guarantors party thereto, the Lenders party thereto and Prospect Capital Corporation as Administrative Agent and Collateral Agent.

 

“Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock (or other applicable security) have the right to receive any cash, securities or other property or in which the Common Stock (or such other security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock (or such other security) entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors, by statute, by contract or otherwise).

 

“Redemption Date” shall have the meaning specified in Section 15.02(a).

 

“Redemption Notice Date” shall have the meaning specified in Section 15.02(c).

 

“Redemption Period” means, with respect to any Optional Redemption, the period beginning at the close of business on the Redemption Notice Date and ending at the close of business on the second Business Day immediately preceding the related Redemption Date.

 

“Redemption Price” shall have the meaning specified in Section 15.01.

 

“Reference Property” shall have the meaning specified in Section 13.08(a).

 

 “Regular Record Date,” with respect to any Interest Payment Date, means the April 1 or October 1 (whether or not such day is a Business Day) immediately preceding the applicable April 15 or October 15 Interest Payment Date, respectively.

 

“Restriction Release Date” shall have the meaning assigned to it in the Company’s Fourth Amended and Restated Certificate of Incorporation, as may be amended from time to time.

 

“Resale Restriction Termination Date,” (i) with respect to the Notes, shall have the meaning specified in the legend set forth in Section 2.05(c), and (ii) with respect to the Common Stock issued upon conversion of the Notes, shall have the meaning specified in the legend set forth in Section 2.05(d).

 

  

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“Responsible Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee who shall have direct responsibility for the administration of this Indenture or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject.

 

“Restricted Securities” shall have the meaning specified in Section 2.05(c).

 

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

 

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

 

“Section 382” means Section 382 of the Code.

 

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

 

“Share Exchange Event” shall have the meaning specified in Section 13.08(a).

 

“Significant Subsidiary” means a Subsidiary of the Company that meets the definition of “significant subsidiary” in Article 1, Rule 1-02(w) of Regulation S-X under the Exchange Act.

 

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

 

“Specified Repurchase Date Company Notice” shall have the meaning specified in Section 14.02(b).

 

“Specified Repurchase Date Expiration Time” shall have the meaning specified in Section 14.03(a)(i).

 

“Specified Repurchase Date Notice” shall have the meaning specified in Section 14.03(a)(i).

 

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

 

“Specified Subsidiary Indebtedness” means Indebtedness for which the Company is not an obligor, except in specified circumstances with respect to the Indebtedness described in clause (a) of this definition, none of which have occurred as of the date of this Indenture, and which exists under or with respect to any of the following credit facilities: (a) the Prospect Capital Term Loan, (b) the Cinedigm Digital Funding I, LLC Credit Agreement, (c) the Phase II Credit Agreement and (d) the KBC Bank NV Credit Agreements; provided that at any time the Company or any of its Subsidiaries (other than any Specified Subsidiary) become an obligor in respect of Indebtedness described in clauses (a), (b), (c) or (d) of this definition of Specified Subsidiary Indebtedness, such Indebtedness in respect of which the Company or any of its Subsidiaries (other than any Specified Subsidiary) become an obligor will not be considered “Specified Subsidiary Indebtedness” for purposes of this Indenture.

 

“Specified Subsidiaries” means (a) with respect to the Prospect Capital Term Loan, Cinedigm DC Holdings, LLC, Access Digital Media, Inc., Access Digital Cinema Phase 2 Corp. and Cinedigm Digital Cinema Australia Pty. Ltd., (b) with respect to the Cinedigm Digital Funding I, 

 

  

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LLC Credit Agreement, Christie/AIX Inc. and Cinedigm Digital Funding I, LLC, (c) with respect to the Cinedigm Digital Funding I, LLC Credit Agreement, Cinedigm Digital Funding II, LLC and CDF2 Holdings, LLC, (d) with respect to the KBC Bank NV Credit Agreements, Access Digital Cinema Phase 2 B/AIX Corp. and (e) each of the respective Subsidiaries and successors of all of the foregoing Subsidiaries of the Company.

 

“Spin-Off” shall have the meaning specified in Section 13.05(c).

 

“Stock Price” shall have the meaning specified in Section 13.04(c).

 

“Subsidiary” means, with respect to any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries of such Person.

 

“Successor Company” shall have the meaning specified in Section 11.01(a).

 

“Trading Day” means a day on which (i) trading in the Common Stock (or other security for which a closing sale price must be determined) generally occurs on The NASDAQ Global Market or, if the Common Stock (or such other security) is not then listed on The NASDAQ Global Market, on the principal other U.S. national or regional securities exchange on which the Common Stock (or such other security) is then listed or, if the Common Stock (or such other security) is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock (or such other security) is then listed or admitted for trading and (ii) a Last Reported Sale Price for the Common Stock (or closing sale price for such other security) is available on such securities exchange or market; provided that if the Common Stock (or such other security) is not so listed or traded, “Trading Day” means a Business Day.

 

“transfer” shall have the meaning specified in Section 2.05(c).

 

“Treasury Regulation” means a Treasury Regulation promulgated under the Code.

 

“Trigger Event” shall have the meaning specified in Section 13.05(c).

 

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, as it was in force at the date of execution of this Indenture; provided, however, that in the event the Trust Indenture Act of 1939 is amended after the date hereof, the term “Trust Indenture Act” shall mean, to the extent required by such amendment, the Trust Indenture Act of 1939, as so amended.

 

“Trustee” means the Person named as the “Trustee” in the first paragraph of this Indenture until a successor trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter, “Trustee” shall mean or include each Person who is then a Trustee hereunder.

 

“unit of Reference Property” shall have the meaning specified in Section 13.08(a).

 

  

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“Valuation Period” shall have the meaning specified in Section 13.05(c).

 

“Wholly Owned Subsidiary” means, with respect to any Person, any Subsidiary of such Person, except that, solely for purposes of this definition, the reference to “50%” in the definition of “Subsidiary” shall be deemed replaced by a reference to “100%”.

 

Section 1.02   References to Interest.  Unless the context otherwise requires, any reference to interest on, or in respect of, any Note in this Indenture shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of Section 4.06(d), Section 4.06(e) and Section 6.03. Unless the context otherwise requires, any express mention of Additional Interest in any provision hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made.

 

ARTICLE II

Issue, Description, Execution, Registration and Exchange of Notes

 

Section 2.01   Designation and Amount.  The Notes shall be designated as the “5.5% Convertible Senior Notes due 2035.” The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is initially limited to $64,000,000, subject to Section 2.10 and except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of other Notes pursuant to Section 2.05, Section 2.06, Section 2.07, Section 10.04, Section 13.02, Section 14.05 and Section 15.03(b).

 

Section 2.02            Form of Notes.  The Notes and the Trustee’s certificate of authentication to be borne by such Notes shall be substantially in the respective forms set forth in Exhibit A, the terms and provisions of which shall constitute, and are hereby expressly incorporated in and made a part of this Indenture.  To the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.

 

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

 

Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends or endorsements as the Officer executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, or to conform to usage or to indicate any special limitations or restrictions to which any particular Notes are subject.

 

  

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Each Global Note shall represent such principal amount of the outstanding Notes as shall be specified therein and shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be increased or reduced to reflect repurchases, cancellations, conversions, transfers or exchanges permitted hereby.  Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in such manner and upon instructions given by the Holder of such Notes in accordance with this Indenture.  Payment of principal (including the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable) of, and accrued and unpaid interest on, a Global Note shall be made to the Holder of such Note on the date of payment, unless a record date or other means of determining Holders eligible to receive payment is provided for herein.

 

Section 2.03   Date and Denomination of Notes; Payments of Interest and Defaulted Amounts.  (a)  The Notes shall be issuable in registered form without coupons in denominations of $1,000 principal amount and integral multiples thereof.  Each Note shall be dated the date of its authentication and shall bear interest from the date specified on the face of the form of such Note.  Accrued interest on the Notes shall be computed on the basis of a 360-day year composed of twelve 30-day months and, for partial months, on the basis of actual days elapsed over a 30-day month.

 

(b)           The Person in whose name any Note (or its Predecessor Note) is registered on the Note Register at the close of business on any Regular Record Date with respect to any Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date.  Interest shall be payable at the office or agency of the Company maintained by the Company for such purposes, which shall initially be the Corporate Trust Office, or any other office or agency located in the United States of America so designated by the Trustee.  The Company shall pay interest (i) on any Physical Notes (A) to Holders holding Physical Notes having an aggregate principal amount of $5,000,000 or less, by check mailed to the Holders of these Notes at their address as it appears in the Note Register and (B) to Holders holding Physical Notes having an aggregate principal amount of more than $5,000,000, either by check mailed to such Holders or, upon written application by such a Holder to the Note Registrar not later than the relevant Regular Record Date, by wire transfer in immediately available funds to that Holder’s account within the United States, which application shall remain in effect until the Holder notifies, in writing, the Note Registrar to the contrary or (ii) on any Global Note by wire transfer of immediately available funds to the account of the Depositary or its nominee.

 

(c)           Any Defaulted Amounts shall forthwith cease to be payable to the Holder on the relevant payment date but shall accrue interest per annum at the rate borne by the Notes, subject to the enforceability thereof under applicable law, from, and including, such relevant payment date, and such Defaulted Amounts together with such interest thereon shall be paid by the Company, at its election in each case, as provided in clause (i) or (ii) below:

 

(i)           The Company may elect to make payment of any Defaulted Amounts to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on a special record date for the payment of such 

 

  

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

 

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

 

Section 2.04   Execution, Authentication and Delivery of Notes.  The Notes shall be signed in the name and on behalf of the Company by the manual or facsimile signature of its Chief Executive Officer, President, Chief Financial Officer, Treasurer, Secretary or any of its Executive or Senior Vice Presidents.

 

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

 

Only such Notes as shall bear thereon a certificate of authentication substantially in the form set forth on the form of Note attached as Exhibit A hereto, executed manually by an authorized officer of the Trustee (or an authenticating agent appointed by the Trustee as provided by Section 16.10), shall be entitled to the benefits of this Indenture or be valid or obligatory for 

 

  

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

 

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

 

Section 2.05   Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary.  (a)  The Company shall cause to be kept at the Corporate Trust Office a register (the register maintained in such office or in any other office or agency of the Company designated pursuant to Section 4.02, the “Note Register”) in which, subject to such reasonable procedures as it may prescribe, the Company shall provide for the registration of Notes and of transfers of Notes.  Such register shall be in written form or in any form capable of being converted into written form within a reasonable period of time.  The Trustee is hereby appointed the “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided.  The Company may appoint one or more co-Note Registrars in accordance with Section 4.02.

 

Upon surrender for registration of transfer of any Note to the Note Registrar or any co-Note Registrar, and satisfaction of the requirements for such transfer set forth in this Section 2.05, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denominations and of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture.

 

Notes may be exchanged for other Notes of any authorized denominations and of a like aggregate principal amount, upon surrender of the Notes to be exchanged at any such office or agency maintained by the Company pursuant to Section 4.02.  Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes that the Holder making the exchange is entitled to receive, bearing registration numbers not contemporaneously outstanding.

 

All Notes presented or surrendered for registration of transfer or for exchange, repurchase or conversion shall (if so required by the Company, the Trustee, the Note Registrar or any co-Note Registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and duly executed, by the Holder thereof or its attorney-in-fact duly authorized in writing.

 

No service charge shall be imposed by the Company, the Trustee, the Note Registrar, any co-Note Registrar or any Paying Agent for any exchange or registration of transfer of Notes, but the Company and the Trustee may require a Holder to pay a sum sufficient to cover any 

 

  

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documentary, stamp or similar issue or transfer tax or other similar governmental charge required by law or permitted pursuant to Section 13.02(d) or Section 13.02(e).

 

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

 

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

 

(b)           So long as the Notes are eligible for book-entry settlement with the Depositary, unless otherwise required by applicable law, subject to the fourth paragraph from the end of Section 2.05(c) all Notes shall be represented by one or more Notes in global form (each, a “Global Note”) registered in the name of the Depositary or a nominee of the Depositary.  Each Global Note shall bear the legend required on a Global Note set forth on Exhibit A hereto. The transfer and exchange of beneficial interests in a Global Note that does not involve the issuance of a Physical Note shall be effected through the Depositary (but not the Trustee or the Custodian) in accordance with this Indenture (including the restrictions on transfer set forth herein) and the procedures of the Depositary therefor.

 

(c)           Every Note that bears or is required under this Section 2.05(c) to bear the legend set forth in this Section 2.05(c) (together with any Common Stock issued upon conversion of the Notes and required to bear the legend set forth in Section 2.05(d), collectively, the “Restricted Securities”) shall be subject to the restrictions on transfer set forth in this Section 2.05(c) (including those contained in the legend set forth below), unless such restrictions on transfer shall be eliminated or otherwise waived by written consent of the Company with written notice to the Trustee as provided below.  The Holder of each such Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer.  As used in this Section 2.05(c) and Section 2.05(d), the term “transfer” encompasses any sale, pledge, transfer or other disposition whatsoever of any Restricted Security.

 

Until the Resale Restriction Termination Date, any certificate evidencing such Note (and all securities issued in exchange therefor or substitution thereof, other than Common Stock, if any, issued upon conversion thereof, which shall bear the legend set forth in Section 2.05(d), if applicable) shall bear a legend in substantially the following form (unless such Notes have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company in writing, with notice thereof to the Trustee):

 

  

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

 

(A)           TO CINEDIGM CORP. (THE ‘‘COMPANY’’) OR ANY SUBSIDIARY THEREOF;

 

(B)           PURSUANT TO, AND IN ACCORDANCE WITH, A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER;

 

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

 

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

 

THE ‘‘RESALE RESTRICTION TERMINATION DATE’’ MEANS THE LATER OF: (1) THE DATE THAT IS ONE YEAR AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THE NOTES OR SUCH SHORTER PERIOD OF TIME PERMITTED BY RULE 144 OR ANY SUCCESSOR PROVISION THERETO; AND (2) SUCH OTHER DATE AS MAY BE REQUIRED BY APPLICABLE LAW.

 

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

 

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

 

Any Note (or security issued in exchange or substitution therefor) (i) as to which such restrictions on transfer shall have expired in accordance with their terms (ii) that has been transferred pursuant to, and in accordance with, a registration statement that has become effective or been declared effective under the Securities Act and that continues to be effective or (iii) that has been sold pursuant to the exemption from registration provided by Rule 144 or any 

 

  

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similar provision then in force under the Securities Act may, upon surrender of such Note for exchange to the Note Registrar in accordance with the provisions of this Section 2.05, be exchanged for a new Note or Notes, of like tenor and aggregate principal amount, which shall not bear the restrictive legend required by this Section 2.05(c) and shall not be assigned a restricted CUSIP number.  No later than the fifth calendar day immediately following the Free Trade Date, the Company shall use reasonable efforts to cause every beneficial interest in any Note represented by a Global Note that bears the restricted legend specified in this Section 2.05(c) to be automatically exchanged for beneficial interests in a Global Note that shall not bear such restrictive legend and shall not be assigned a restricted CUSIP number (other than any Notes held by Affiliates of the Company).  To effect such exchange, the Company (A) will deliver to the Depositary an instruction letter for the Depositary’s mandatory exchange process at least 15 calendar days immediately prior to the Free Trade Date and (B) will deliver to each of the Trustee and the Note Registrar a duly completed free transferability certificate in the form set forth on Exhibit B (the “Free Transferability Certificate”) promptly upon the occurrence of the Free Trade Date.  Upon receipt of the Free Transferability Certificate by the Trustee and the Note Registrar, the legend set forth above shall be deemed removed from each Global Note specified in the Free Transferability Certificate and the restricted CUSIP number shall be deemed removed from each such Global Note and deemed replaced with an unrestricted CUSIP number, with no further action required by the Company, the Trustee or, if applicable, the Depositary.  Prior to the Company’s delivery of the Free Transferability Certificate and afterwards, the Company and the Trustee will comply with the rules and procedures of the Depositary and otherwise use reasonable efforts to cause each Global Note to be identified by an unrestricted CUSIP number in the facilities of the Depositary by the Free Trade Date or as promptly as possible thereafter.  In addition, on the Free Trade Date or promptly thereafter, the Company will provide Bloomberg LLP with a copy of the Free Transferability Certificate and will use reasonable efforts to cause Bloomberg LLP to adjust its screen page for the Notes to indicate that the Notes are no longer Restricted Securities and are now identified by an unrestricted CUSIP number.  Notwithstanding anything to the contrary in this paragraph, the Company will not be required to deliver or provide the Free Transferability Certificate if it reasonably believes that removal of the restrictive legend or the changes to the CUSIP number for the Notes could result in or facilitate transfers of the Notes in violation of applicable law; provided that, this sentence does not limit the application of Section 4.06(e).

 

The Company shall promptly notify the Trustee and the Holders in writing after a registration statement, if any, with respect to the Notes or any Common Stock issued upon conversion of the Notes has been declared effective under the Securities Act.

 

Notwithstanding any other provisions of this Indenture (other than the provisions set forth in this Section 2.05(c)), a Global Note may not be transferred as a whole or in part except (i) by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary and (ii) for transfers of portions of a Global Note in certificated form made upon request of a member of, or a participant in, the Depositary (for itself or on behalf of a beneficial owner) by written notice given to the Trustee by or on behalf of the Depositary in accordance with customary procedures of the Depositary and in compliance with this Section 2.05(c).

 

  

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The Depositary shall be a clearing agency registered under the Exchange Act.  The Company initially appoints DTC to act as Depositary with respect to each Global Note.  Initially, each Global Note shall be issued to the Depositary, registered in the name of Cede & Co., as the nominee of the Depositary, and deposited with the Trustee as custodian for Cede & Co. Neither the Trustee nor any agent shall have any responsibility or liability for any actions taken or not taken by the Depositary.

 

If (i) the Depositary notifies the Company at any time that the Depositary is unwilling or unable to continue as depositary for the Global Notes and a successor depositary is not appointed within 90 calendar days, (ii) the Depositary ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 calendar days, or (iii) an Event of Default with respect to the Notes has occurred and is continuing and a beneficial owner of any Note requests that its beneficial interest therein be issued as a Physical Note, the Company shall execute, and the Trustee, upon receipt of an Officer’s Certificate and a Company Order for the authentication and delivery of Notes, shall authenticate and deliver (x) in the case of clause (iii), a Physical Note to such beneficial owner in a principal amount equal to the principal amount of such Note corresponding to such beneficial owner’s beneficial interest and (y) in the case of clause (i) or (ii), Physical Notes to each beneficial owner of the related Global Notes (or a portion thereof) in an aggregate principal amount equal to the aggregate principal amount of such Global Notes in exchange for such Global Notes, and upon delivery of the Global Notes to the Trustee such Global Notes shall be canceled.

 

Physical Notes issued in exchange for all or a part of the Global Note pursuant to this Section 2.05(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee.  Upon execution and authentication, the Trustee shall deliver such Physical Notes to the Persons in whose names such Physical Notes are so registered.

 

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

 

None of the Company, the Trustee nor any agent of the Company or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Note or maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

 

(d)           Until the Resale Restriction Termination Date, any stock certificate representing Common Stock issued upon conversion of a Note shall bear a legend in substantially the 

 

  

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

 

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

 

(A)           TO CINEDIGM CORP. (THE ‘‘COMPANY’’) OR ANY SUBSIDIARY THEREOF;

 

(B)           PURSUANT TO, AND IN ACCORDANCE WITH, A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER;

 

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

 

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

 

THE ‘‘RESALE RESTRICTION TERMINATION DATE’’ MEANS THE LATER OF: (1) THE DATE THAT IS ONE YEAR AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THE COMPANY’S 5.5% CONVERTIBLE SENIOR NOTES DUE 2035 OR SUCH SHORTER PERIOD OF TIME PERMITTED BY RULE 144 OR ANY SUCCESSOR PROVISION THERETO; AND (2) SUCH OTHER DATE AS MAY BE REQUIRED BY APPLICABLE LAW.

 

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

 

  

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

 

Any such Common Stock (i) as to which such restrictions on transfer shall have expired in accordance with their terms (ii) that has been transferred pursuant to, and in accordance with, a registration statement that has become effective or been declared effective under the Securities Act and that continues to be effective at the time of such transfer or (iii) that has been sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, may, upon surrender of the certificates representing such shares of Common Stock for exchange in accordance with the procedures of the transfer agent for the Common Stock, be exchanged for a new certificate or certificates for a like aggregate number of shares of Common Stock, which shall not bear the restrictive legend required by this Section 2.05(d).

 

(e)           The Company shall not, and shall not permit any of the “affiliates” (as defined in Rule 144) it controls to, resell any of the Notes that constitute “restricted securities” under Rule 144 that have been reacquired by any of them.

 

(f)           The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among participants of the Depositary or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof

 

(g)           Until the Restriction Resale Date, any stock certificate representing Common Stock issued upon conversion of such Note shall bear a legend in substantially the following form:

 

THE TRANSFER OF SECURITIES REPRESENTED HEREBY IS SUBJECT TO RESTRICTION PURSUANT TO ARTICLE FOURTH OF THE RESTATED CERTIFICATE OF INCORPORATION OF CINEDIGM CORP. AS AMENDED AND IN EFFECT FROM TIME TO TIME, A COPY OF WHICH MAY BE OBTAINED FROM THE CORPORATION UPON REQUEST.

 

Section 2.06   Mutilated, Destroyed, Lost or Stolen Notes.  In case any Note shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon its written request by Company Order, the Trustee or an authenticating agent appointed by the Trustee shall authenticate and deliver a new Note, bearing a registration number not contemporaneously outstanding, in exchange and substitution for the mutilated Note, or in lieu of and in substitution for the Note so destroyed, lost or stolen.  In every case the applicant for a substituted Note shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless from any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company, to 

 

  

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the Trustee and, if applicable, to such authenticating agent evidence to their satisfaction of the destruction, loss or theft of such Note and of the ownership thereof.

 

The Trustee or such authenticating agent may authenticate any such substituted Note and deliver the same upon the receipt of such security or indemnity as the Trustee, the Company and, if applicable, such authenticating agent may require.  No service charge shall be imposed by the Company, the Trustee, the Note Registrar, any co-Note Registrar or the Paying Agent upon the issuance of any substitute Note, but the Company and the Trustee may require a Holder to pay a sum sufficient to cover any documentary, stamp or similar issue or transfer tax required in connection therewith as a result of the name of the Holder of the new substitute Note being different from the name of the Holder of the old Note that became mutilated or was destroyed, lost or stolen.  In case any Note that has matured or is about to mature or has been surrendered for required repurchase or is about to be converted in accordance with Article XIII or redeemed in accordance with Article XV shall become mutilated or be destroyed, lost or stolen, the Company may, in its sole discretion, instead of issuing a substitute Note, pay or authorize the payment of or convert or authorize the conversion of the same (without surrender thereof except in the case of a mutilated Note), as the case may be, if the applicant for such payment or conversion shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless for any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, evidence satisfactory to the Company, the Trustee and, if applicable, any Paying Agent or Conversion Agent evidence of their satisfaction of the destruction, loss or theft of such Note and of the ownership thereof.

 

Every substitute Note issued pursuant to the provisions of this Section 2.06 by virtue of the fact that any Note is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note shall be found at any time, and shall be entitled to all the benefits of (but shall be subject to all the limitations set forth in) this Indenture equally and proportionately with any and all other Notes duly issued hereunder.  To the extent permitted by applicable law, all Notes shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment or conversion or repurchase of mutilated, destroyed, lost or stolen Notes and shall preclude any and all other rights or remedies notwithstanding any applicable law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment or conversion of negotiable instruments or other securities without their surrender.

 

Section 2.07   Temporary Notes.  Pending the preparation of Physical Notes, the Company may execute and the Trustee or an authenticating agent appointed by the Trustee shall, upon written request of the Company by Company Order delivered to the Trustee, authenticate and deliver temporary Notes (printed or lithographed).  Temporary Notes shall be issuable in any authorized denomination, and substantially in the form of the Physical Notes but with such omissions, insertions and variations as may be appropriate for temporary Notes, all as may be determined by the Company.  Every such temporary Note shall be executed by the Company and authenticated by the Trustee or such authenticating agent upon the same conditions and in substantially the same manner, and with the same effect, as the Physical Notes.  Without unreasonable delay, the Company shall execute and deliver to the Trustee or such authenticating 

 

  

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agent Physical Notes (other than any Global Note) and thereupon any or all temporary Notes (other than any Global Note) may be surrendered in exchange therefor, at each office or agency maintained by the Company pursuant to Section 4.02 and the Trustee or such authenticating agent shall authenticate and deliver in exchange for such temporary Notes an equal aggregate principal amount of Physical Notes.  Such exchange shall be made by the Company at its own expense and without any charge therefor.  Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits and subject to the same limitations under this Indenture as Physical Notes authenticated and delivered hereunder.

 

Section 2.08            Cancellation of Notes Paid, Converted, Etc.  The Company shall cause all Notes surrendered for the purpose of payment, redemption, repurchase, registration of transfer or exchange or conversion, if surrendered to any Person other than the Trustee (including the Company or the Company’s agents, Subsidiaries or Affiliates), to be surrendered to the Trustee for cancellation.  All Notes delivered to the Trustee shall be canceled promptly in accordance with its customary procedures, and no Notes shall be authenticated in exchange thereof except as expressly permitted by any of the provisions of this Indenture.  The Trustee shall dispose of canceled Notes in accordance with its customary procedures and, after such disposition, shall deliver a certificate of such disposition to the Company, at the Company’s written request in a Company Order. If the Company or any of its Subsidiaries shall acquire any of the Notes, such acquisition shall not operate as a redemption, repurchase or satisfaction of the indebtedness represented by such Notes unless and until the same are delivered to the Trustee for cancellation. Any Notes surrendered for cancellation shall not be reissued or resold and shall be promptly cancelled.

 

Section 2.09            CUSIP Numbers.  The Company in issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in all notices issued to Holders as a convenience to such Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or on such notice and that reliance may be placed only on the other identification numbers printed on the Notes.  The Company shall promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

 

Section 2.10   Additional Notes; Repurchases.  The Company may, without the consent of the Holders and notwithstanding Section 2.01, reopen this Indenture and issue additional Notes hereunder with the same terms and the same CUSIP number as the Notes initially issued hereunder (other than differences in the issue price, interest accrued prior to the issue date of such additional Notes, transfer restrictions and other related matters) in an unlimited aggregate principal amount; provided that if any such additional Notes are not fungible with the Notes initially issued hereunder for U.S. federal income tax or securities law purposes, such additional Notes shall have one or more separate CUSIP numbers.  Prior to the issuance of any such additional Notes, the Company shall deliver to the Trustee a Company Order, an Officer’s Certificate and an Opinion of Counsel, such Officer’s Certificate and Opinion of Counsel to cover such matters required by Section 16.05 and that the form and terms of such Notes has been established in conformity with the provisions of this Indenture and that such Notes, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and binding 

 

  

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obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general application affecting the rights and remedies of creditors and to general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith, fair dealing and unconscionability), regardless of whether considered in a proceeding in equity or law. In addition, the Company may, to the extent permitted by applicable law, and directly or indirectly (regardless of whether such Notes are surrendered to the Company), repurchase Notes in the open market or otherwise, whether by the Company or its Subsidiaries or through a private or public tender or exchange offer or through counterparties to private agreements, including by cash-settled swaps or other derivatives, in each case without prior notice to the Holders. Any Notes repurchased by the Company may, at the Company’s option, be surrendered to the Trustee for cancellation in accordance with Section 2.08, but shall not be reissued or resold by the Company.

 

ARTICLE III

Satisfaction and Discharge

 

Section 3.01   Satisfaction and Discharge.  This Indenture and the Notes shall upon request of the Company contained in an Officer’s Certificate cease to be of further effect, and the Trustee, at the expense and written request of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture and the Notes, when (a) (i) all Notes theretofore authenticated and delivered (other than (x) Notes which have been destroyed, lost or stolen and which have been replaced, paid or converted as provided in Section 2.06 and (y) Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 4.04(d)) have been delivered to the Trustee for cancellation; or (ii) the Company has deposited with the Trustee or delivered to Holders, as applicable, after the Notes have become due and payable, whether on the Maturity Date, any Fundamental Change Repurchase Date, Specified Repurchase Date, Redemption Date, upon conversion or otherwise, cash or, solely to satisfy the Company’s Conversion Obligation, shares of Common Stock, sufficient to pay all of the outstanding Notes or satisfy all outstanding conversions, as the case may be, and pay all other sums due and payable under this Indenture by the Company; and (b) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.  Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.06 shall survive.

 

ARTICLE IV

Particular Covenants of the Company

 

Section 4.01   Payment of Principal and Interest.  The Company covenants and agrees that it will pay or cause to be paid the principal (including the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable) of, and accrued and unpaid interest on, each of the Notes at the places, at the respective times and in the manner provided herein and in the Notes.

 

  

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Section 4.02            Maintenance of Office or Agency.  The Company will maintain in the continental United States of America an office or agency where the Notes may be surrendered for registration of transfer or exchange or for presentation for payment or repurchase (“Paying Agent”) or for conversion (“Conversion Agent”) and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served.  The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office .

 

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

 

The Company hereby initially designates the Trustee as the Paying Agent, Note Registrar, Custodian and Conversion Agent and the Corporate Trust Office as the office or agency where Notes may be surrendered for registration of transfer or exchange or for presentation for payment or repurchase or for conversion and where notices and demands to or upon the Company (other than service of process) in respect of the Notes and this Indenture may be served.

 

Section 4.03   Appointments to Fill Vacancies in Trustee’s Office.  The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.09, a Trustee, so that there shall at all times be a Trustee hereunder.

 

Section 4.04   Provisions as to Paying Agent.  (a)  If the Company shall appoint a Paying Agent other than the Trustee, the Company will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 4.04:

 

(i)           that it will hold all sums held by it as such agent for the payment of the principal (including the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable) of, and accrued and unpaid interest on, the Notes in trust for the benefit of the Holders of the Notes;

 

(ii)          that it will give the Trustee prompt written notice of any failure by the Company to make any payment of the principal (including the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable) of, and accrued and unpaid interest on, the Notes when the same shall be due and payable; and

 

  

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

 

The Company shall, on or before each due date of the principal (including the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable) of, or accrued and unpaid interest on, the Notes, deposit with the Paying Agent a sum sufficient to pay such principal (including the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable) or accrued and unpaid interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee in writing of any failure to take such action; provided that if such deposit is made on the due date, such deposit must be received by the Paying Agent by 10:00 a.m., New York City time, on such date.

 

(b)           If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal (including the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable) of, and accrued and unpaid interest on, the Notes, set aside, segregate and hold in trust for the benefit of the Holders of the Notes a sum sufficient to pay such principal (including the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable) and accrued and unpaid interest so becoming due and will promptly notify the Trustee in writing of any failure to take such action and of any failure by the Company to make any payment of the principal (including the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable) of, or accrued and unpaid interest on, the Notes when the same shall become due and payable.

 

(c)           Anything in this Section 4.04 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay, cause to be paid or deliver to the Trustee all sums or amounts held in trust by the Company or any Paying Agent hereunder as required by this Section 4.04, such sums or amounts to be held by the Trustee upon the trusts herein contained and upon such payment or delivery by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from all further liability but only with respect to such sums or amounts.

 

(d)           Subject to applicable abandoned property laws, any money and shares of Common Stock deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal (including the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable) of, accrued and unpaid interest on and the consideration due upon conversion of, any Note and remaining unclaimed for two years after such principal (including the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable) or interest has become due and payable shall be paid to the Company on request of the Company contained in an Officer’s Certificate, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money and shares of Common Stock, and all liability of the Company as trustee thereof, shall thereupon cease.

 

  

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Section 4.05   Existence.  Subject to Article XI, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

 

Section 4.06            Rule 144A Information Requirement and Annual Reports.  (a) At any time the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company shall, so long as any of the Notes or any shares of Common Stock issuable upon conversion thereof shall, at such time, constitute “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide to the Trustee and shall, upon written request, provide to any Holder, beneficial owner or prospective purchaser of such Notes or any shares of Common Stock issuable upon conversion of such Notes, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such Notes or shares of Common Stock pursuant to Rule 144A.  The Company shall take such further action as any Holder or beneficial owner of such Notes or such Common Stock may reasonably request to the extent from time to time required to enable such Holder or beneficial owner to sell such Notes or shares of Common Stock in accordance with Rule 144A, as such rule may be amended from time to time.

 

(b)           The Company shall file with the Trustee within 15 calendar days after the same are required to be filed with the Commission (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act or any successor rule under the Exchange Act), copies of any documents or reports that the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act (excluding any such information, documents or reports, or portions thereof, subject to confidential treatment and any correspondence with the Commission).  Any such document or report that the Company files with the Commission via the Commission’s EDGAR system (or any successor thereto) shall be deemed to be filed with the Trustee for purposes of this Section 4.06(b) at the time such documents are filed via the EDGAR system (or any successor thereto).

 

(c)           Delivery of the reports and documents described in subsection (b) above to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely on an Officer’s Certificate).

 

(d)           If, at any time during the six-month period beginning on, and including, the date that is six months after the last date of original issuance of the Notes, the Company fails to timely file any document or report that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace periods thereunder and other than current reports on Form 8-K), or the Notes are not otherwise freely tradable by Holders other than the Company’s Affiliates or Holders that were the Company’s Affiliates at any time during the three months preceding (as a result of restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes), the Company shall pay Additional Interest on the Notes.  In such circumstances, Additional Interest shall accrue on the Notes at the rate of 0.50% per annum of the principal amount of the Notes outstanding for each calendar day during such period for which the Company’s failure to file has occurred and is continuing or the Notes are not otherwise freely tradable by Holders other than the Company’s Affiliates (or Holders that have been the Company’s Affiliates at any time during the three 

 

  

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months preceding) without restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes; provided that such Additional Interest shall cease to accrue on the one year anniversary of the last original issuance date of the Notes.  As used in this Section 4.06(d), documents or reports that the Company is required to “file” with the Commission pursuant to Section 13 or 15(d) of the Exchange Act does not include documents or reports that the Company furnishes to the Commission pursuant to Section 13 or 15(d) of the Exchange Act.

 

(e)           If, and for so long as, the restrictive legend on the Notes specified in Section 2.05(c) has not been removed (or deemed removed pursuant to this Indenture), the Notes are assigned a restricted CUSIP number or the Notes are not otherwise freely tradable by Holders other than the Company’s Affiliates or Holders that were the Company’s Affiliates at any time during the three months preceding (without restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes) as of the 365th calendar day after the last date of original issuance of the Notes, the Company shall pay Additional Interest on the Notes at a rate equal to 0.50% per annum of the principal amount of Notes outstanding until the restrictive legend on the Notes has been removed in accordance with Section 2.05(c), the Notes are assigned an unrestricted CUSIP and the Notes are freely tradable by Holders other than the Company’s Affiliates (or Holders that were the Company’s Affiliates at any time during the three months preceding).

 

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

 

(g)           The Additional Interest that is payable in accordance with Section 4.06(d) or Section 4.06(e) shall be in addition to, and not in lieu of, any Additional Interest that may be payable as a result of the Company’s election pursuant to Section 6.03.

 

(h)           If Additional Interest is payable by the Company pursuant to Section 4.06(d) or Section 4.06(e), the Company shall deliver to the Trustee an Officer’s Certificate to that effect stating (i) the amount of such Additional Interest that is payable and (ii) the date on which such Additional Interest is payable.  Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Additional Interest is payable.  If the Company has paid Additional Interest directly to the Persons entitled to it, the Company shall promptly deliver to the Trustee an Officer’s Certificate setting forth the particulars of such payment.

 

Section 4.07   Stay, Extension and Usury Laws.  The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law that would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the performance of this Indenture; and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay 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.

 

  

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Section 4.08            Compliance Certificate; Statements as to Defaults.  The Company shall deliver to the Trustee within 120 calendar days after the end of each fiscal year of the Company (beginning with the fiscal year ending on March 31, 2016) an Officer’s Certificate stating whether the signer thereof knows of any Default that occurred during the previous fiscal year through the date of such Officer’s Certificate and if so, specifying each such Default, its status and what actions the Company is taking or proposing to take with respect thereto.

 

In addition, the Company shall deliver to the Trustee, as soon as possible, and in any event within 30 calendar days after the Company becomes aware of the occurrence of any Event of Default or Default, an Officer’s Certificate setting forth the details of such Event of Default or Default, its status and the action that the Company is taking or proposing to take in respect thereof.

 

Section 4.09            Further Instruments and Acts.  Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.

 

Section 4.10            Limitation on Intercompany Indebtedness.  Neither the Company nor any of its Subsidiaries (other than Specified Subsidiaries) will, directly or indirectly, make loans to any of the Specified Subsidiaries.

 

Section 4.11            Limitation on Investments.  Neither the Company nor any of its Subsidiaries (other than Specified Subsidiaries) will make or maintain, directly or indirectly, any Investment in any of the Specified Subsidiaries except for Investments (other than intercompany Indebtedness) in existence on the date of the Indenture.

 

Section 4.12            Limitation on Transactions with Affiliates.  Neither the Company nor any of its Subsidiaries (other than Specified Subsidiaries) will, enter into any transaction directly or indirectly with, or for the benefit of, any Specified Subsidiaries, except for transactions in the ordinary course of business on a basis no less favorable to the Company or any such Subsidiaries (other than Specified Subsidiaries) as would be obtained in a comparable arm’s length transaction with a Person that is not an Affiliate of ours or any such subsidiaries (other than Specified Subsidiaries).

 

ARTICLE V

Lists of Holders and Reports by the Company and the Trustee

 

Section 5.01   Lists of Holders.  For so long as there are any Physical Notes, the Company covenants and agrees that it will furnish or cause to be furnished to the Trustee, semi-annually, not more than 15 calendar days after each April 1 and October 1 in each year beginning with October 1, 2015, and at such other times as the Trustee may reasonably request in writing, within 30 calendar days after receipt by the Company of any such request (or such lesser time as the Trustee may reasonably request in order to enable it to timely provide any notice to be provided by it hereunder), a list in such form as the Trustee may reasonably require of the names and addresses of the Holders as of a date not more than 15 calendar days (or such other date as the Trustee may reasonably request in order to so provide any such notices) prior to the time 

 

  

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such information is furnished, except that no such list need be furnished so long as the Trustee is acting as Note Registrar.

 

Section 5.02            Preservation and Disclosure of Lists.  The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the Holders contained in the most recent list furnished to it as provided in Section 5.01 or maintained by the Trustee in its capacity as Note Registrar, if so acting.  The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.

 

ARTICLE VI

Defaults and Remedies

 

Section 6.01   Events of Default.  Each of the following events shall be “Events of Default” with respect to the Notes:

 

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

 

(b)           default in the payment of principal of any Note when due and payable on the Maturity Date, any Fundamental Change Repurchase Date, any Specified Repurchase Date, any Redemption Date, upon declaration of acceleration or otherwise;

 

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

 

(d)           failure by the Company to (1) issue a Fundamental Change Company Notice in accordance with Section 14.01(b), (2) issue a notice of an Effective Date in accordance with Section 13.04(b), (3) comply with the notice obligations of Section 15.02(a) or (4) issue a notice of a Specified Repurchase Date in accordance with Section 14.02(b), in each case when due;

 

(e)           failure by the Company to comply with its obligations under Article XI;

 

(f)           failure by the Company for 60 calendar days after written notice from the Trustee or the Holders of at least 25% in principal amount of the Notes then outstanding has been received by the Company to comply with any of its other agreements contained in the Notes or this Indenture;

 

(g)           default by the Company or any Subsidiary of the Company (other than Specified Subsidiaries in respect of Specified Subsidiary Indebtedness) with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of $2,000,000 (or its foreign currency equivalent) in the aggregate of the Company and/or any such Subsidiary, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness becoming or being declared due and payable or (ii) constituting a failure to pay the principal or interest of any such debt when due and payable at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise;

 

  

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(h)           a final judgment or judgments for the payment of $2,000,000 (or its foreign currency equivalent) or more (excluding any amounts covered by insurance) rendered against the Company or any Subsidiary of the Company (other than Specified Subsidiaries), which judgment is not discharged or stayed within 60 calendar days after (i) the date on which the right to appeal thereof has expired if no such appeal has commenced, or (ii) the date on which all rights to appeal have been extinguished;

 

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

 

(j)           an involuntary case or other proceeding shall be commenced against the Company or any then-current Significant Subsidiary seeking liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 consecutive calendar days.

 

Section 6.02   Acceleration; Rescission and Annulment.  If one or more Events of Default shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), then, and in each and every such case (other than an Event of Default specified in Section 6.01(i) or Section 6.01(j) with respect to the Company), unless the principal of all of the Notes shall have already become due and payable, either the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding determined in accordance with Section 8.04, by written notice to the Company (and to the Trustee if given by Holders), may, and the Trustee, at the written request of such Holders, shall, declare 100% of the principal of, and accrued and unpaid interest on, all the Notes to be due and payable immediately, and upon any such declaration the same shall become and shall automatically be immediately due and payable, anything contained in this Indenture or in the Notes to the contrary notwithstanding.  If an Event of Default specified in Section 6.01(i) or Section 6.01(j) with respect to the Company occurs and is continuing, 100% of the principal of, and accrued and unpaid interest, if any, on, all Notes shall automatically become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

 

The immediately preceding paragraph, however, is subject to the conditions that if, at any time after the principal of the Notes shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered as 

 

  

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hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay installments of accrued and unpaid interest upon all Notes and the principal of any and all Notes that shall have become due otherwise than by acceleration (with interest on overdue installments of accrued and unpaid interest to the extent that payment of such interest is enforceable under applicable law, and on such principal at the rate borne by the Notes) and amounts due to the Trustee pursuant to Section 7.06, and if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) any and all existing Events of Default under this Indenture, other than the nonpayment of the principal of and accrued and unpaid interest, if any, on Notes that shall have become due solely by such acceleration, shall have been cured or waived pursuant to Section 6.09, then and in every such case (except as provided in the immediately succeeding sentence) the Holders of a majority in aggregate principal amount of the Notes then outstanding, by written notice to the Company and to the Trustee, may waive all Defaults or Events of Default with respect to the Notes and rescind and annul such declaration and its consequences and such Default or Event of Default shall cease to exist, and any Default or Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver or rescission and annulment shall extend to or shall affect any subsequent Default or Event of Default, or shall impair any right consequent thereon.  Notwithstanding anything to the contrary herein, no such waiver or rescission and annulment shall extend to or shall affect any Default or Event of Default resulting from (i) the nonpayment of the principal of, or accrued and unpaid interest on, any Notes, (ii) a failure to repurchase or redeem Notes when required, (iii) a failure to pay or deliver, as the case may be, the consideration due upon conversion of the Notes or (iv) any other provision that requires the consent of each affected Holder to amend.

 

Section 6.03   Additional Interest in Lieu of Reporting Default.  Notwithstanding anything in this Indenture or in the Notes to the contrary, to the extent the Company elects, the sole remedy for an Event of Default relating to the Company’s failure to comply with its obligations as set forth in Section 4.06(b) shall after the occurrence of such an Event of Default consist exclusively of the right to receive Additional Interest on the Notes at a rate equal to  0.50% per annum of the principal amount of the Notes outstanding for each day during the first 90 calendar days after the occurrence of such Event of Default, during which such Event of Default is continuing beginning on, and including, the date on which such an Event of Default first occurs. Additional Interest payable pursuant to this Section 6.03 shall be in addition to, not in lieu of, any Additional Interest payable pursuant to Section 4.06(d) or Section 4.06(e); provided that in no event shall Additional Interest payable pursuant to this Section 6.03, together with any Additional Interest that may be payable pursuant to Section 4.06(d) accrue at a rate in excess of 0.50% per annum of the principal amount of Notes regardless of the number of events or circumstances giving rise to the requirement to pay such Additional Interest. If the Company so elects, such Additional Interest shall be payable in the same manner and on the same dates as regular interest on the Notes.  On the 91st calendar day after such Event of Default (if the Event of Default relating to the Company’s failure to comply with its obligations as set forth in Section 4.06(b) is not cured or waived prior to such 91st calendar day), the Notes will be subject to acceleration as provided in Section 6.02.  In the event the Company does not elect to pay Additional Interest following an Event of Default in accordance with this Section 6.03 or the Company elected to make such payment but does not pay the Additional Interest when due, the Notes shall be subject to acceleration as provided in Section 6.02.

 

  

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In order to elect to pay Additional Interest as the sole remedy during the first 90 calendar days after the occurrence of any Event of Default described in the immediately preceding paragraph, the Company must notify in writing all Holders of the Notes, the Trustee and the Paying Agent of such election on or before the beginning of such 90-calendar day period.  Upon the failure to timely give such notice, the Notes shall be immediately subject to acceleration as provided in Section 6.02.

 

Section 6.04   Payments of Notes on Default; Suit Therefor.  If an Event of Default described in clause (a) or (b) of Section 6.01 shall have occurred, the Company shall, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of the Notes, the whole amount then due and payable on the Notes for principal and interest, if any, with interest on any overdue principal and interest, if any, at the rate borne by the Notes at such time, and, in addition thereto, such further amount as shall be sufficient to cover any amounts due to the Trustee under Section 7.06.  If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon the Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Notes, wherever situated.

 

In the event there shall be pending proceedings for the bankruptcy or for the reorganization of the Company or any other obligor on the Notes under Title 11 of the United States Code, or any other applicable law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Company or such other obligor, the property of the Company or such other obligor, or in the event of any other judicial proceedings relative to the Company or such other obligor upon the Notes, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 6.04, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal and accrued and unpaid interest, if any, in respect of the Notes, and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents and to take such other actions as it may deem necessary or advisable in order to have the claims of the Trustee (including any claim for the compensation and reasonable expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceedings relative to the Company or any other obligor on the Notes, its or their creditors, or its or their property, and to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same after the deduction of any amounts due to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization, liquidator, custodian or similar official is hereby authorized by each of the Holders to make such payments to the Trustee, as administrative expenses, and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for compensation and reasonable expenses, advances and disbursements, including agents and counsel fees and expenses, and including any other amounts due to the Trustee under Section 7.06, incurred by it up to the date 

 

  

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of such distribution.  To the extent that such payment of compensation and reasonable expenses, advances and disbursements out of the estate in any such proceedings shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, monies, securities and other property that the Holders of the Notes may be entitled to receive in such proceedings, whether in liquidation or under any plan of reorganization or arrangement or otherwise.

 

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

 

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

 

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

 

In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of any waiver pursuant to Section 6.09 or any rescission and annulment pursuant to Section 6.02 or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company, the Holders, and the Trustee shall, subject to any determination in such proceeding, be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Company, the Holders, and the Trustee shall continue as though no such proceeding had been instituted.

 

Section 6.05   Application of Monies Collected by Trustee.  Any monies collected by the Trustee pursuant to this Article VI with respect to the Notes shall be applied in the following order, at the date or dates fixed by the Trustee for the distribution of such monies, upon presentation of the several Notes, and stamping thereon the payment, if only partially paid, and upon surrender thereof, if fully paid:

 

First, to the payment of all amounts due the Trustee under Section 7.06;

 

Second, in case the principal of the outstanding Notes shall not have become due and be unpaid, to the payment of interest on, and any cash due upon conversion of, the Notes in default in the order of the date due of the payments of such interest and cash due upon conversion, as the case may be, with interest (to the extent that such interest has been collected by the Trustee) 

 

  

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upon such overdue payments at the rate borne by the Notes at such time, such payments to be made ratably to the Persons entitled thereto;

 

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

 

Fourth, to the payment of the remainder, if any, to the Company.

 

Section 6.06   Proceedings by Holders.  Except to enforce the right to receive payment of principal (including, if applicable, the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price) or interest when due, or the right to receive payment or delivery of the consideration due upon conversion, no Holder of any Note shall have any right by virtue of or by availing of any provision of this Indenture or any Note to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture or any Note, or for the appointment of a receiver, trustee, liquidator, custodian or other similar official, or for any other remedy hereunder, unless:

 

(a)           such Holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof, as herein provided;

 

(b)           Holders of at least 25% in aggregate principal amount of the Notes then outstanding shall have requested the Trustee to pursue such remedy hereunder;

 

(c)           such Holders shall have offered to the Trustee such security or indemnity satisfactory to it against any loss, liability or expense to be incurred therein or thereby;

 

(d)           the Trustee for 60 calendar days after its receipt of the request and offer of security or indemnity, shall not complied with such request; and

 

(e)           no direction that, in the opinion of the Trustee, is inconsistent with such written request shall have been given to the Trustee by the Holders of a majority of the aggregate principal amount of the Notes then outstanding within such 60-calendar day period pursuant to Section 6.09,

 

  

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it being understood and intended, and being expressly covenanted by the taker and Holder of every Note with every other taker and Holder and the Trustee that no one or more Holders shall have any right in any manner whatever by virtue of or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders), or to obtain or seek to obtain priority over or preference to any other such Holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders (except as otherwise provided herein).  For the protection and enforcement of this Section 6.06, each and every Holder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

 

Notwithstanding any other provision of this Indenture and any provision of any Note, the right of any Holder to receive payment or delivery, as the case may be, of (x) the principal (including the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable) of, (y) accrued and unpaid interest, if any, on, and (z) the consideration due upon conversion of, such Note, on or after the respective due dates expressed or provided for in such Note or in this Indenture, or to institute suit for the enforcement of any such payment or delivery, as the case may be, on or after such respective dates against the Company shall not be impaired or affected without the consent of such Holder.

 

Section 6.07   Proceedings by Trustee.  In case of an Event of Default the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as are necessary to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by applicable law.

 

Section 6.08            Remedies Cumulative and Continuing.  Except as provided in the last paragraph of Section 2.06, all powers and remedies given by this Article VI to the Trustee or to the Holders shall, to the extent permitted by applicable law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the Holders of the Notes, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any Holder of any of the Notes to exercise any right or power accruing upon any Default or Event of Default shall impair any such right or power, or shall be construed to be a waiver of any such Default or Event of Default or any acquiescence therein; and, subject to the provisions of Section 6.06, every power and remedy given by this Article VI or by law to the Trustee or to the Holders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders.

 

Section 6.09            Direction of Proceedings and Waiver of Defaults by Majority of Holders.  The Holders of a majority of the aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 8.04 shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to Notes; provided, however, that such 

 

  

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direction shall not be in conflict with any rule of law or with this Indenture, and the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction.  The Trustee may refuse to follow any direction that it determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability.  The Holders of a majority in aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 8.04 may on behalf of the Holders of all of the Notes waive any past Default or Event of Default hereunder and its consequences except (i) a default in the payment of accrued and unpaid interest, if any, on, or the principal (including any Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price) of, the Notes when due that has not been cured pursuant to the provisions of Section 6.01, (ii) a failure by the Company to pay or deliver, as the case may be, the consideration due upon conversion of the Notes or (iii) a default in respect of a covenant or provision hereof which under Article X cannot be modified or amended without the consent of each Holder of an outstanding Note affected.  Upon any such waiver the Company, the Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.  Whenever any Default or Event of Default hereunder shall have been waived as permitted by this Section 6.09, said Default or Event of Default shall for all purposes of the Notes and this Indenture be deemed to have been cured and to be not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

 

Section 6.10            Notice of Defaults.  The Trustee shall, within 90 calendar days after it receives notice of the occurrence and continuance of a Default of which a Responsible Officer of the Trustee has knowledge (as determined in accordance with Section 7.02), send to all Holders as the names and addresses of such Holders appear upon the Note Register, notice of all such Defaults, unless such Defaults shall have been cured or waived before the giving of such notice; provided that, except in the case of a Default in the payment of the principal of (including the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable), or accrued and unpaid interest on, any of the Notes or a Default in the payment or delivery of the consideration due upon conversion, the Trustee shall be protected in withholding such notice if and so long as it in good faith determines that the withholding of such notice is in the interests of the Holders.

 

Section 6.11            Undertaking to Pay Costs.  All parties to this Indenture agree, and each Holder of any Note by its acceptance thereof shall be deemed to have agreed, that any court may, in its discretion, require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section 6.11 (to the extent permitted by applicable law) shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Notes at the time outstanding determined in accordance with Section 8.04, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or accrued and unpaid interest, if any, on any Note (including, but not limited to, the 

 

  

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Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable) on or after the due date expressed or provided for in such Note or to any suit for the enforcement of the right to convert any Note, or receive consideration due upon conversion, in accordance with the provisions of Article XIII.

 

ARTICLE VII

Concerning the Trustee

 

Section 7.01   Duties and Responsibilities of Trustee.  The Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of all Events of Default that may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture.  In case an Event of Default has occurred 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 circumstances in the conduct of such person’s own affairs; provided that if an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity or security reasonably satisfactory to the Trustee against any loss, liability or expense that might be incurred by it in compliance with such request or direction.

 

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

 

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

 

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

 

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

 

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

 

  

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(c)           the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a majority of the aggregate principal amount of the Notes at the time outstanding determined as provided in Section 8.04 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;

 

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

 

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

 

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

 

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

 

(h)           in the event that the Trustee is also acting as Custodian, Note Registrar, Paying Agent, Conversion Agent, transfer agent or any other capacity hereunder, the rights and protections afforded to the Trustee pursuant to this Article VII, including without limitation the right to be indemnified, shall also be afforded to such Custodian, Note Registrar, Paying Agent, Conversion Agent or transfer agent.

 

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

 

Section 7.02   Reliance on Documents, Opinions, Etc.  Except as otherwise provided in Section 7.01:

 

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

 

  

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

 

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

 

(d)           the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the expense of the Company and shall incur no liability of any kind by reason of such inquiry or investigation;

 

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

 

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

 

(g)           the Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder;

 

(h)           the Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture; and

 

(i)           the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture, provided that the Trustee’s conduct does not constitute gross negligence, willful misconduct or bad faith.

 

In no event shall the Trustee be liable for any special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, lost profits), even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action other than any such loss or damage caused by the Trustee’s willful misconduct or gross negligence.  The Trustee shall not be charged with knowledge of any Default or Event of Default with respect to the Notes, unless either (1) in respect of any payment related Default or Event of Default, a Responsible Officer shall have actual knowledge of such Default or Event of Default or (2) in respect of any other Default or Event of Default, written notice of such Default or Event 

 

  

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of Default shall have been given to a Responsible Officer of the Trustee by the Company or by any Holder of the Notes at the Corporate Trust Office and such notice references the Notes and this Indenture.

 

Section 7.03   No Responsibility for Recitals, Etc.  The recitals contained herein and in the Notes (except in the Trustee’s certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same.  The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Notes.  The Trustee shall not be accountable for the use or application by the Company of any Notes or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the provisions of this Indenture.

 

Section 7.04   Trustee, Paying Agents, Conversion Agents or Note Registrar May Own Notes.  The Trustee, any Paying Agent, any Conversion Agent or Note Registrar, in its individual or any other capacity, may become the owner or pledgee of Notes with the same rights it would have if it were not the Trustee, Paying Agent, Conversion Agent or Note Registrar.

 

Section 7.05   Monies and Shares of Common Stock to Be Held in Trust.  All monies and any shares of Common Stock received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received.  Money and any shares of Common Stock held by the Trustee in trust hereunder need not be segregated from other funds or property except to the extent required by applicable law.  The Trustee shall be under no liability for interest on any money or any shares of Common Stock received by it hereunder except as may be agreed from time to time by the Company and the Trustee.

 

Section 7.06            Compensation and Expenses of Trustee.  The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as mutually agreed to in writing between the Trustee and the Company, and the Company will pay or reimburse the Trustee for all reasonable out-of-pocket expenses, disbursements and advances reasonably incurred or made by the Trustee in accordance with any of the provisions of this Indenture in any capacity thereunder (including the reasonable compensation and the expenses and disbursements of its agents and counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as shall have been caused by its gross negligence, willful misconduct or bad faith.  The Company also covenants to indemnify the Trustee in any capacity under this Indenture and any other document or transaction entered into in connection herewith and its agents and any authenticating agent for, and to hold them harmless against, any loss, claim, damage, liability or expense incurred without gross negligence, willful misconduct or bad faith on the part of the Trustee, its officers, directors, agents or employees, or such agent or authenticating agent, as the case may be, and arising out of or in connection with the acceptance or administration of this Indenture or in any other capacity hereunder, including the costs and expenses of defending themselves against any claim of liability in the premises.  The obligations of the Company under this Section 7.06 to compensate or indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall be secured by a senior claim to which the Notes are hereby made subordinate on all money or property held or collected by the Trustee, except, subject to the effect of Section 6.05, funds held in trust herewith for the 

 

  

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benefit of the Holders of particular Notes.  The Trustee’s right to receive payment of any amounts due under this Section 7.06 shall not be subordinate to any other liability or indebtedness of the Company.  The obligation of the Company under this Section 7.06 shall survive the satisfaction and discharge of this Indenture and the earlier resignation or removal of the Trustee.  The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.  The indemnification provided in this Section 7.06 shall extend to the officers, directors, agents and employees of the Trustee.

 

Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee and its agents and any authenticating agent incur expenses or render services after an Event of Default specified in Section 6.01(i) or Section 6.01(j) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy, insolvency or similar laws.

 

Section 7.07   Officer’s Certificate as Evidence.  Subject to the provisions of Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of gross negligence, willful misconduct and bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officer’s Certificate delivered to the Trustee, and such Officer’s Certificate, in the absence of gross negligence, willful misconduct and bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof.

 

Section 7.08            Eligibility of Trustee.  There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000.  If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

 

Section 7.09            Resignation or Removal of Trustee.  (a) The Trustee may at any time resign by giving written notice of such resignation to the Company and by mailing notice thereof to the Holders at their addresses as they shall appear on the Note Register.  Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee.  If no successor trustee shall have been so appointed and have accepted appointment within 60 calendar days after the mailing of such notice of resignation to the Holders, the resigning Trustee may, upon ten Business Days’ notice to the Company and the Holders, and at the expense of the Company petition any court of competent jurisdiction at the expense of the Company for the appointment of a successor trustee, or any Holder who has been a bona fide holder of a Note or Notes for at least six months may, subject to the provisions of Section 6.11, on behalf of himself or herself and all others similarly situated, at the expense of the Company, petition any such 

 

  

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court for the appointment of a successor trustee.  Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

 

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

 

(i)           the Trustee shall cease to be eligible in accordance with the provisions of Section 7.08 and shall fail to resign after written request therefor by the Company or by any such Holder, or

 

(ii)          the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

 

then, in either case, the Company may by a Board Resolution remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 6.11, any Holder who has been a bona fide holder of a Note or Notes for at least six months may, on behalf of himself or herself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee.  Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

 

(c)           The Holders of a majority in aggregate principal amount of the Notes at the time outstanding, as determined in accordance with Section 8.04, may at any time remove the Trustee and nominate a successor trustee that shall be deemed appointed as successor trustee unless within ten calendar days after notice to the Company of such nomination the Company objects thereto, in which case the Trustee so removed at the expense of the Company or any Holder, upon the terms and conditions and otherwise as in Section 7.09(a) provided, may petition any court of competent jurisdiction at the expense of the Company for an appointment of a successor trustee.

 

(d)           Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 7.09 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.10.

 

Section 7.10   Acceptance by Successor Trustee.  Any successor trustee appointed as provided in Section 7.09 shall execute, acknowledge and deliver to the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as Trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 7.06, execute and deliver an instrument transferring to such successor trustee all the rights and powers of the trustee so ceasing to act.  Upon request of any 

 

  

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such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers.  Any trustee ceasing to act shall, nevertheless, retain a senior claim to which the Notes are hereby made subordinate on all money or property held or collected by such trustee as such, except for funds held in trust for the benefit of Holders of particular Notes, to secure any amounts then due it pursuant to the provisions of Section 7.06.

 

No successor trustee shall accept appointment as provided in this Section 7.10 unless at the time of such acceptance such successor trustee shall be eligible under the provisions of Section 7.08.

 

Upon acceptance of appointment by a successor trustee as provided in this Section 7.10, each of the Company and the successor trustee, at the written direction and at the expense of the Company shall mail or cause to be mailed notice of the succession of such trustee hereunder to the Holders at their addresses as they shall appear on the Note Register.  If the Company fails to mail such notice within ten calendar days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Company.

 

Section 7.11   Succession by Merger, Etc.  Any corporation or other entity into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation or other entity resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or other entity succeeding to all or substantially all of the corporate trust business of the Trustee (including the administration of this Indenture), shall be the successor to the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided that in the case of any corporation or other entity succeeding to all or substantially all of the corporate trust business of the Trustee such corporation or other entity shall be eligible under the provisions of Section 7.08.

 

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

 

Section 7.12            Trustee’s Application for Instructions from the Company.  Any application by the Trustee for written instructions from the Company (other than with regard to any action proposed to be taken or omitted to be taken by the Trustee that affects the rights of the Holders of the Notes under this Indenture) may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective.  The Trustee shall not 

 

  

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be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after the date any officer that the Company has indicated to the Trustee should receive such application actually receives such application, unless any such officer shall have consented in writing to any earlier date), unless, prior to taking any such action (or the effective date in the case of any omission), the Trustee shall have received written instructions in accordance with this Indenture in response to such application specifying the action to be taken or omitted.

 

ARTICLE VIII

Concerning the Holders

 

Section 8.01   Action by Holders.  Whenever in this Indenture it is provided that the Holders of a specified percentage of the aggregate principal amount of the Notes may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action, the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in writing, or (b) by the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with the provisions of Article IX, or (c) by a combination of such instrument or instruments and any such record of such a meeting of Holders.  Whenever the Company or the Trustee solicits the taking of any action by the Holders of the Notes, the Company or the Trustee may, but shall not be required to, fix in advance of such solicitation, a date as the record date for determining Holders entitled to take such action.  The record date if one is selected shall be not more than 15 calendar days prior to the date of commencement of solicitation of such action.

 

Section 8.02            Proof of Execution by Holders.  Subject to the provisions of Section 7.01, Section 7.02 and Section 9.05, proof of the execution of any instrument by a Holder or its agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee.  The holding of Notes shall be proved by the Note Register or by a certificate of the Note Registrar.  The record of any Holders’ meeting shall be proved in the manner provided in Section 9.06.

 

Section 8.03            Who Are Deemed Absolute Owners.  The Company, the Trustee, any authenticating agent, any Paying Agent, any Conversion Agent and any Note Registrar may deem the Person in whose name a Note shall be registered upon the Note Register to be, and may treat it as, the absolute owner of such Note (whether or not such Note shall be overdue and notwithstanding any notation of ownership or other writing thereon made by any Person other than the Company or any Note Registrar) for the purpose of receiving payment of or on account of the principal of and (subject to Section 2.03) accrued and unpaid interest on such Note, for conversion of such Note and for all other purposes under this Indenture; and neither the Company nor the Trustee nor any Paying Agent nor any Conversion Agent nor any Note Registrar shall be affected by any notice to the contrary.  All such payments or deliveries so made to any Holder for the time being, or upon its order, shall be valid, and, to the extent of the sums or shares of Common Stock so paid or delivered, effectual to satisfy and discharge the liability for monies payable or shares deliverable upon any such Note.  Notwithstanding anything 

 

  

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to the contrary in this Indenture or the Notes during the continuance of an Event of Default, any Holder of a beneficial interest in a Global Note may directly enforce against the Company, without the consent, solicitation, proxy, authorization or any other action of the Depositary or any other Person, such Holder’s right to exchange such beneficial interest for a Note in certificated form in accordance with the provisions of this Indenture.

 

Section 8.04   Company-Owned Notes Disregarded.  In determining whether the Holders of the requisite aggregate principal amount of Notes have concurred in any direction, consent, waiver or other action under this Indenture, Notes that are owned by the Company, by any Subsidiary thereof or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any Subsidiary thereof shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, consent, waiver or other action only Notes that a Responsible Officer actually knows are so owned shall be so disregarded.  Notes so owned that have been pledged in good faith may be regarded as outstanding for the purposes of this Section 8.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to so act with respect to such Notes and that the pledgee is not the Company, a Subsidiary thereof or a Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or a Subsidiary thereof.  In the case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon reasonable request of the Trustee, the Company shall furnish to the Trustee promptly an Officer’s Certificate listing and identifying all Notes, if any, known by the Company to be owned or held by or for the account of any of the above described Persons; and, subject to Section 7.01, the Trustee shall be entitled to accept such Officer’s Certificate as conclusive evidence of the facts therein set forth and of the fact that all Notes not listed therein are outstanding for the purpose of any such determination.

 

Section 8.05            Revocation of Consents; Future Holders Bound.  At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the Holders of the percentage of the aggregate principal amount of the Notes specified in this Indenture in connection with such action, any Holder of a Note that is shown by the evidence to be included in the Notes the Holders of which have consented to such action may, by filing written notice with the Trustee at its Corporate Trust Office and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Note.  Except as aforesaid, any such action taken by the Holder of any Note shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Note and of any Notes issued in exchange or substitution therefor or upon registration of transfer thereof, irrespective of whether any notation in regard thereto is made upon such Note or any Note issued in exchange or substitution therefor or upon registration of transfer thereof.

 

ARTICLE IX

Holders’ Meetings

 

Section 9.01   Purpose of Meetings.  A meeting of Holders may be called at any time and from time to time pursuant to the provisions of this Article IX for any of the following purposes:

 

  

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

 

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

 

(c)           to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 10.02; or

 

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

 

Section 9.02   Call of Meetings by Trustee.  The Trustee may at any time call a meeting of Holders to take any action specified in Section 9.01, to be held at such time and at such place as the Trustee shall determine.  Notice of every meeting of the Holders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting and the establishment of any record date pursuant to Section 8.01, shall be sent to Holders of such Notes at their addresses as they shall appear on the Note Register.  Such notice shall also be sent to the Company.  Such notices shall be sent not less than 20 nor more than 90 calendar days prior to the date fixed for the meeting.

 

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

 

Section 9.03            Call of Meetings by Company or Holders.  In case at any time the Company, pursuant to a Board Resolution delivered to the Trustee, or the Holders of at least 10% of the aggregate principal amount of the Notes then outstanding, shall have requested the Trustee to call a meeting of Holders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have sent the notice of such meeting within 20 calendar days after receipt of such request, then the Company or such Holders may determine the time and the place for such meeting and may call such meeting to take any action authorized in Section 9.01, by sending notice thereof as provided in Section 9.02.

 

Section 9.04            Qualifications for Voting.  To be entitled to vote at any meeting of Holders a Person shall (a) be a Holder of one or more Notes on the record date pertaining to such meeting or (b) be a Person appointed by an instrument in writing as proxy by a Holder of one or more Notes on the record date pertaining to such meeting.  The only Persons who shall be entitled to be present or to speak at any meeting of Holders shall be the Persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.

 

  

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Section 9.05                      Regulations.  Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders, in regard to proof of the holding of Notes and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall think fit.

 

The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders as provided in Section 9.03, in which case the Company or the Holders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman.  A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Holders of a majority in aggregate principal amount of the Notes represented at the meeting and entitled to vote at the meeting.

 

Subject to the provisions of Section 8.04, at any meeting of Holders each Holder or proxyholder shall be entitled to one vote for each $1,000 principal amount of Notes held or represented by him or her; provided, however, that no vote shall be cast or counted at any meeting in respect of any Note challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding.  The chairman of the meeting shall have no right to vote other than by virtue of Notes held by it or instruments in writing as aforesaid duly designating it as the proxy to vote on behalf of other Holders.  Any meeting of Holders duly called pursuant to the provisions of Section 9.02 or Section 9.03 may be adjourned from time to time by the Holders of a majority of the aggregate principal amount of Notes represented at the meeting, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice.

 

Section 9.06   Voting.  The vote upon any resolution submitted to any meeting of Holders shall be by written ballot on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the outstanding aggregate principal amount of the Notes held or represented by them.  The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting.  A record in duplicate of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was sent as provided in Section 9.02.  The record shall show the aggregate principal amount of the Notes voting in favor of or against any resolution.  The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.

 

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

 

Section 9.07            No Delay of Rights by Meeting.  Nothing contained in this Article IX shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Holders or 

 

  

50

  

any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Holders under any of the provisions of this Indenture or of the Notes.

 

ARTICLE X

Supplemental Indentures

 

Section 10.01          Supplemental Indentures Without Consent of Holders.  The Company, when authorized by the resolutions of the Board of Directors and the Trustee, at the Company’s expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes:

 

(a)           to cure any ambiguity, omission, defect or inconsistency that does not adversely affect the Holders in any material respect;

 

(b)           to provide for the assumption by a Successor Company of the obligations of the Company under the Notes and this Indenture pursuant to Article XI;

 

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

 

(d)           to secure the Notes;

 

(e)           to add to the covenants or Events of Default of the Company for the benefit of the Holders or surrender any right or power conferred upon the Company;

 

(f)           to make any change that does not adversely affect the rights of any Holder;

 

(g)           to increase the Conversion Rate as provided in this Indenture;

 

(h)           to provide for the issuance of additional Notes in accordance with the limitations set forth in this Indenture;

 

(i)           in connection with any Share Exchange Event, provide that the Notes are convertible into Reference Property, subject to the provisions of Section 13.02, and make such related changes to the terms of the Notes to the extent expressly required by Section 13.08;

 

(j)           to comply with requirements of the Commission in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act;

 

(k)           to provide for the acceptance of appointment by a successor trustee pursuant to Section 7.10 or to facilitate the administration of the trusts by more than one trustee; or

 

(l)           to conform the provisions of this Indenture or the Notes to the “Description of Notes” in the Offering Memorandum, as evidenced by an Officer’s Certificate.

 

Upon the written request of the Company, the Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not 

 

  

51

  

be obligated to, but may in its discretion, enter into any supplemental indenture that affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Any supplemental indenture authorized by the provisions of this Section 10.01 may be executed by the Company and the Trustee without the consent of the Holders of any of the Notes at the time outstanding, notwithstanding any of the provisions of Section 10.02.

 

Section 10.02   Supplemental Indentures with Consent of Holders.  With the consent (evidenced as provided in Article VIII) of the Holders of at least a majority of the aggregate principal amount of Notes then outstanding (determined in accordance with Article VIII and including, without limitation, consents obtained in connection with a repurchase of, or tender or exchange offer for, Notes), the Company, when authorized by the resolutions of the Board of Directors and the Trustee, at the Company’s expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture, the Notes or any supplemental indenture or of modifying in any manner the rights of the Holders or waiving compliance with any provisions of the Notes or this Indenture; provided, however, that, without the consent of each Holder of an outstanding Note affected, no such supplemental indenture shall:

 

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

 

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

 

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

 

(d)           make any change that adversely affects the conversion rights of any Notes other than as required by this Indenture;

 

(e)           reduce the Fundamental Change Repurchase Price, the Specified Repurchase Date Price or the Redemption Price, of any Note or amend or modify in any manner adverse to the Holders the Company’s obligation to make such payments, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;

 

(f)           make any Note payable in currency, or at a place of payment, other than that stated in the Note;

 

(g)           change the ranking of the Notes in a manner adverse to the Holders;

 

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

 

(i)           make any change in this Article X that requires each Holder’s consent or in the waiver provisions in Section 6.02 or Section 6.09.

 

  

52

  

Upon the written request of the Company, and upon the filing with the Trustee of evidence of the consent of Holders as aforesaid and subject to Section 10.05, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

 

Holders do not need, under this Section 10.02, to approve the particular form of any proposed supplemental indenture.  It shall be sufficient if such Holders approve the substance thereof.  After any such supplemental indenture becomes effective, the Company shall mail to the Holders a notice briefly describing such supplemental indenture. However, the failure to give such notice to all the Holders, or any defect in the notice, will not impair or affect the validity of the supplemental indenture.

 

Section 10.03   Effect of Supplemental Indentures.  Upon the execution of any supplemental indenture pursuant to the provisions of this Article X, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitation of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the Holders shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

Section 10.04            Notation on Notes.  Notes authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article X may, at the Company’s expense, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture.  If the Company or the Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may, at the Company’s expense, be prepared and executed by the Company, authenticated by the Trustee (or an authenticating agent duly appointed by the Trustee pursuant to Section 16.10) and delivered in exchange for the Notes then outstanding, upon surrender of such Notes then outstanding.

 

Section 10.05            Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee.  In addition to the documents required by Section 16.05, the Trustee shall receive an Officer’s Certificate and an Opinion of Counsel as conclusive evidence and each stating that any supplemental indenture executed pursuant hereto complies with the requirements of this Article X and is permitted or authorized by this Indenture. Such Opinion of Counsel will also state that such supplemental indenture is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws of general application affecting the rights and remedies of creditors and to general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith, fair dealing and unconscionability), regardless of whether considered in a proceeding in equity or law.

 

  

53

  

ARTICLE XI

Consolidation, Merger, Sale, Conveyance and Lease

 

Section 11.01   Company May Consolidate, Etc. on Certain Terms.  Subject to the provisions of Section 11.02, the Company shall not consolidate with, merge with or into, or sell, convey, transfer or lease all or substantially all of the properties and assets of the Company and its Subsidiaries, taken as a whole, to another Person, unless:

 

(a)           the resulting, surviving or transferee Person (the “Successor Company”), if not the Company, shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and the Successor Company (if not the Company), shall not be a Specified Subsidiary and shall expressly assume, by supplemental indenture, all of the obligations of the Company under the Notes and this Indenture; and

 

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

 

For purposes of this Section 11.01, the sale, conveyance, transfer or lease of all or substantially all of the properties and assets of one or more of the Company’s Subsidiaries to another Person, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the Company’s properties and assets on a consolidated basis, shall be deemed to be the sale, conveyance, transfer or lease of all or substantially all of the Company’s properties and assets to another Person.

 

Section 11.02            Successor Corporation to Be Substituted.  In case of any such consolidation, merger, sale, conveyance, transfer or lease and upon the assumption by the Successor Company, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of and accrued and unpaid interest on all of the Notes, the due and punctual delivery or payment, as the case may be, of any consideration due upon conversion of the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Company, such Successor Company (if not the Company) shall succeed to and, except in the case of a lease of all or substantially all of the Company’s properties and assets, shall be substituted for the Company, with the same effect as if it had been named herein as the party of the first part.  Such Successor Company thereupon may cause to be signed, and may issue either in its own name or in the name of the Company any or all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such Successor Company instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause to be authenticated and delivered, any Notes that previously shall have been signed and delivered by the Officers of the Company to the Trustee for authentication, and any Notes that such Successor Company thereafter shall cause to be signed and delivered to the Trustee for that purpose.  All the Notes so issued shall in all respects have the same legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Notes had been issued at the date of the execution hereof.  In the event of any such consolidation, merger, sale, conveyance or transfer (but not in the case of a lease), upon compliance with this Article XI the Person named as the 

 

  

54

  

“Company” in the first paragraph of this Indenture (or any successor that shall thereafter have become such in the manner prescribed in this Article XI) may be dissolved, wound up and liquidated at any time thereafter and, except in the case of a lease, such Person shall be released from its liabilities as obligor and maker of the Notes and from its obligations under this Indenture and the Notes.

 

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

 

Section 11.03   Evidence to Be Given to Trustee.  No consolidation, merger, sale, conveyance, transfer or lease, pursuant to which the Company is not the surviving or transferee Person, shall be effective unless the Trustee shall receive an Officer’s Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance, transfer or lease and any such assumption and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, complies with the provisions of this Article XI.

 

ARTICLE XII

Immunity of Incorporators, Stockholders, Officers and Directors

 

Section 12.01            Indenture and Notes Solely Corporate Obligations.  No recourse for the payment of the principal of or accrued and unpaid interest on any Note, nor for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Note, nor because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, Officer or director or Subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Notes.

 

ARTICLE XIII

Conversion of Notes

 

Section 13.01            Conversion Privilege.   Subject to and upon compliance with the provisions of this Article XIII, each Holder of a Note shall have the right, at such Holder’s option, to convert all or any portion (if the portion to be converted is $1,000 principal amount or an integral multiple thereof) of such at any time prior to the close of business on the Business Day immediately preceding the Maturity Date at an initial conversion rate of 824.5723 shares of Common Stock (subject to adjustment as provided in this Article 13, the “Conversion Rate”) per $1,000 principal amount of Notes (subject to the settlement provisions of Section 13.02, the “Conversion Obligation”).

 

  

55

  

Section 13.02            Conversion Procedure; Settlement Upon Conversion.

 

(a)           Subject to restrictions on ownership of shares of Common Stock as set forth in Section 13.03 and subject to this Section 13.02, Section 13.04(b) and Section 13.08(a), upon conversion of any Note, the Company shall deliver to the converting Holder, in respect of each $1,000 principal amount of Notes being converted, a number of shares of Common Stock equal to the Conversion Rate, together with a cash payment, if applicable, in lieu of delivering any fractional share of Common Stock in accordance with subsection (j) of this Section 13.02, on the third Business Day immediately following the relevant Conversion Date. A Holder may convert fewer than all of such Holder’s Notes so long as the Notes are converted are a multiple of $1,000 principal amount.

 

(b)           Subject to Section 13.02(e), before any Holder of a Note shall be entitled to convert a Note as set forth above, such Holder shall (i) in the case of a Global Note, comply with the procedures of the Depositary in effect at that time (any instruction to convert transmitted to the Depositary shall be irrevocable) and, if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 13.02(h) and (ii) in the case of a Physical Note (1) complete, manually sign and deliver an irrevocable notice to the Conversion Agent as set forth in the Form of Notice of Conversion (or a facsimile thereof) (a “Notice of Conversion”) at the office of the Conversion Agent and state in writing therein the principal amount of Notes to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of Common Stock to be delivered upon settlement of the Conversion Obligation to be registered, (2) surrender such Notes, duly endorsed to the Company or in blank (and accompanied by appropriate endorsement and transfer documents), at the office of the Conversion Agent, (3) if required, furnish appropriate endorsements and transfer documents, (4) if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 13.02(h).  The Trustee (and, if different, the Conversion Agent) shall notify the Company of any conversion pursuant to this Article XIII on the Conversion Date for such conversion.  No Notice of Conversion with respect to any Notes may be surrendered by a Holder thereof if such Holder has also delivered a Fundamental Change Repurchase Notice or Specified Repurchase Date Notice to the Company in respect of such Notes and not validly withdrawn such Fundamental Change Repurchase Notice or Specified Repurchase Date Notice in accordance with Section 14.04.

 

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

 

(c)           A Note shall be deemed to have been converted immediately prior to the close of business on the date (the “Conversion Date”) that the Holder has complied with the requirements set forth in subsection (b) above. The Company shall issue or cause to be issued, and deliver to the Conversion Agent or to such Holder, or such Holder’s nominee or nominees, certificates or a book-entry transfer through the Depositary for the full number of shares of Common Stock to which such Holder shall be entitled in satisfaction of the Company’s Conversion Obligation.

 

  

56

  

(d)           In case any Physical Note shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of the Note so surrendered a new Note or Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Note, without payment of any service charge by the converting Holder but, if required by the Company or the Trustee, with payment of a sum sufficient to cover any documentary, stamp or similar issue or transfer tax or similar governmental charge required by law or that may be imposed in connection therewith as a result of the name of the Holder of the new Notes issued upon such conversion being different from the name of the Holder of the old Notes surrendered for such conversion.

 

(e)           If a Holder submits a Note for conversion, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of any shares of Common Stock upon conversion, unless the tax is due because the Holder requests such shares to be issued in a name other than the Holder’s name, in which case the Holder shall pay that tax.  The Conversion Agent may refuse to deliver the certificates representing the shares of Common Stock being issued in a name other than the Holder’s name until the Trustee receives a sum sufficient to pay any tax that is due by such Holder in accordance with the immediately preceding sentence.

 

(f)           Except as provided in Section 13.05, no adjustment shall be made for dividends on any shares of Common Stock issued upon the conversion of any Note as provided in this Article 13.

 

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

 

(h)           Upon conversion, a Holder shall not receive any separate cash payment for accrued and unpaid interest, if any, except as set forth below.  The Company’s settlement of the full Conversion Obligation shall be deemed to satisfy in full its obligation to pay the principal amount of the Note and accrued and unpaid interest, if any, to, but not including, the relevant Conversion Date. As a result, accrued and unpaid interest, if any, to, but not including, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited.  Notwithstanding the foregoing, if Notes are converted after the close of business on a Regular Record Date, Holders of such Notes as of the close of business on such Regular Record Date will receive the full amount of interest payable on such Notes on the corresponding Interest Payment Date notwithstanding the conversion.  Notes surrendered for conversion during the period from the close of business on any Regular Record Date to the open of business on the immediately following Interest Payment Date must be accompanied by funds equal to the amount of interest payable on the Notes so converted; provided that no such payment shall be required (1) for conversions following the Regular Record Date immediately preceding the Maturity Date; (2) if the Company has specified a Redemption Date that is after a Regular Record Date and on or prior to the second Business Day following the corresponding Interest Payment Date; (3) if the Company has specified a Fundamental Change Repurchase Date that is after a Regular Record Date and on or prior to the second Business Day following the 

 

  

57

  

corresponding Interest Payment Date; or (4) to the extent of any Defaulted Amounts, if any Defaulted Amounts exists at the time of conversion with respect to such Note.  Therefore, for the avoidance of doubt, all Holders of record on the Regular Record Date immediately preceding the Maturity Date and any Redemption Date or Fundamental Change Repurchase Date shall receive the full interest payment due on the Maturity Date or other corresponding Interest Payment Date regardless of whether their Notes have been converted following such Regular Record Date.

 

(i)           The Person in whose name the certificate for any shares of Common Stock delivered upon conversion is registered shall be treated as a stockholder of record as of the close of business on the relevant Conversion Date.  Upon a conversion of Notes, such Person shall no longer be a Holder of such Notes surrendered for conversion.

 

(j)           The Company shall not issue any fractional share of Common Stock upon conversion of the Notes and shall instead pay cash in lieu of delivering any fractional share of Common Stock issuable upon conversion based on the Last Reported Sale Price of the Common Stock on the relevant Conversion Date.

 

Section 13.03   Ownership Limit. Notwithstanding any other provision of this Indenture or the Notes, no Holder of Notes will be entitled to receive shares of Common Stock following conversion of such Notes to the extent the Company reasonably determines that delivery of such shares of Common Stock would be reasonably likely to result in an Ownership Change under Section 382. If any delivery of shares of Common Stock owed to a Holder upon conversion of Notes is not made, in whole or in part, as a result of the limitation described in this Section 13.03, the Company’s obligation to make such delivery shall not be extinguished and it shall deliver such shares of Common Stock as promptly as practicable after any such converting Holder gives notice to the Company that such delivery would not result in it being a ‘‘5-percent shareholder’’ of Common Stock pursuant to Treasury Regulation Section 1.382-2T(g)(1) (or any successor provision), excluding any ‘‘direct public group’’ with respect the Company, as that term is defined in Treasury Regulation Section 1.382-2T(j)(2)(ii) (or any successor provision).

 

Section 13.04            Increased Conversion Rate Applicable to Certain Notes Surrendered in Connection with Make-Whole Fundamental Change or during a Redemption Period.  (a)  If a Make-Whole Fundamental Change occurs or becomes effective prior to April 20, 2020 and a Holder elects to convert its Notes in connection with such Make-Whole Fundamental Change or if the Company issues a Notice of Redemption and the related Redemption Notice Date is prior to April 20, 2020 and a Holder elects to convert (and a Conversion Date occurs with respect to) its Notes that are subject to the Notice of Redemption during the related Redemption Period, the Company shall, under the circumstances described below, increase the Conversion Rate for the Notes so surrendered for conversion by a number of additional shares of Common Stock (the “Additional Shares”), as described below.  A conversion of Notes shall be deemed for these purposes to be “in connection with” such Make-Whole Fundamental Change if the relevant Notice of Conversion is received by the Conversion Agent from, and including, the Effective Date of the Make-Whole Fundamental Change up to, and including, the close of business on the second Business Day immediately prior to the related Fundamental Change Repurchase Date (or, in the case of a Make-Whole Fundamental Change that would have been a Fundamental Change but for the proviso in clause (b) of the definition thereof, the 35th Trading Day immediately following the Effective Date of such Make-Whole Fundamental Change). For the avoidance of 

 

  

58

  

doubt, the Conversion Rate will not be increased pursuant to the provisions of this Section 13.04 on account of an anticipated Make-Whole Fundamental Change that does not occur.

 

(b)           Upon surrender of Notes for conversion in connection with a Make-Whole Fundamental Change or during a Redemption Period, the Company shall deliver shares of the Common Stock, including the Additional Shares, in accordance with Section 13.02 based on the Conversion Rate as increased to reflect the Additional Shares, if any, pursuant to the table below; provided, however, that if, at the effective time of a Make-Whole Fundamental Change described in clause (b) of the definition of Fundamental Change, the Reference Property following such Make-Whole Fundamental Change is composed entirely of cash, for any conversion of Notes following the Effective Date of such Make-Whole Fundamental Change, the Conversion Obligation shall be calculated based solely on the Stock Price for the transaction and shall be deemed to be an amount of cash per $1,000 principal amount of converted Notes equal to the Conversion Rate (including any adjustment for Additional Shares), multiplied by such Stock Price.  The Company shall notify the Holders of Notes, the Trustee and the Conversion Agent (if other than the Trustee) of the Effective Date of any Make-Whole Fundamental Change no later than five Business Days after such Effective Date.

 

(c)           The number of Additional Shares, if any, by which the Conversion Rate shall be increased shall be determined by reference to the table below, based on (1)(i) the date on which the Make-Whole Fundamental Change occurs or becomes effective (the “Effective Date”) or (ii) the Redemption Notice Date, as the case may be, and (2) the price (the “Stock Price”) paid (or deemed to be paid) per share of the Common Stock in the Make-Whole Fundamental Change or on the Redemption Notice Date, as the case may be.  If the holders of the Common Stock receive in exchange for their Common Stock only cash in a Make-Whole Fundamental Change described in clause (b) of the definition of Fundamental Change, the Stock Price shall be the cash amount paid per share.  Otherwise, the Stock Price shall be the average of the Last Reported Sale Prices of the Common Stock over the five consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Effective Date of the Make-Whole Fundamental Change or the Redemption Notice Date, as the case may be.  The Board of Directors shall make appropriate adjustments to the Stock Price, in its good faith determination, to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date of the event occurs, during such five consecutive Trading Day period. In the event that a conversion during a Redemption Period would also be deemed to be in connection with a Make-Whole Fundamental Change, a Holder of the Notes to be converted will be entitled to a single increase to the Conversion Rate with respect to the first to occur of the applicable Redemption Notice Date or the Effective Date of the applicable Make-Whole Fundamental Change, and the later event will be deemed not to have occurred for purposes of this Section 13.04.

 

(d)           The Stock Prices set forth in the column headings of the table below shall be adjusted as of any date on which the Conversion Rate of the Notes is otherwise adjusted.  The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to such adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted.  The number of Additional Shares set forth in the table 

 

  

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below shall be adjusted in the same manner and at the same time as the Conversion Rate as set forth in Section 13.05.

 

(e)           The following table sets forth the number of Additional Shares of Common Stock by which the Conversion Rate shall be increased per $1,000 principal amount of Notes pursuant to this Section 13.04 for each Stock Price and Effective Date and Redemption Notice Date set forth below:

 

	  	
 

Stock Price

	
Effective Date / 

Redemption Notice 

Date

	
$0.98

 

	
$1.50

 

	
$2.00

 

	
$3.00

 

	
$4.00

 

	
$5.00

 

	
$6.00

 

	
$7.00

 

	
$8.00

 

	
$10.00

 

	
 

April 29, 2015.....................

	
 

204.0816

	
 

128.8800

	
 

93.2700

	
 

56.8567

	
 

38.2650

	
 

26.9560

	
 

19.3383

	
 

13.8543

	
 

9.7150

	
 

3.8830

	
April 15, 2016.....................

	
204.0816

	
106.3133

	
76.8150

	
46.7600

	
31.4675

	
22.1860

	
15.9467

	
11.4600

	
8.0788

	
3.3180

	
April 15, 2017.....................

	
204.0816

	
82.6867

	
59.6600

	
36.2867

	
24.4350

	
17.2620

	
12.4450

	
8.9886

	
6.3850

	
2.7240

	
April 15, 2018.....................

	
204.0816

	
57.5000

	
41.4350

	
25.1900

	
16.9850

	
12.0300

	
8.7100

	
6.3300

	
4.5388

	
2.0240

	
April 15, 2019.....................

	
204.0816

	
30.1133

	
21.6700

	
13.1700

	
8.8950

	
6.3180

	
4.5950

	
3.3614

	
2.4350

	
1.1350

	
April 19, 2020.....................

	
204.0816

	
0.0000

	
0.0000

	
0.0000

	
0.0000

	
0.0000

	
0.0000

	
0.0000

	
0.0000

	
0.0000

The exact Stock Prices and Effective Dates or Redemption Notice Dates may not be set forth in the table above, in which case:

 

(i)           if the Stock Price is between two Stock Prices in the table above or the Effective Date or Redemption Notice Date, as the case may be, is between two Effective Dates or Redemption Notice Dates, as the case may be, in the table above, the number of Additional Shares by which the Conversion Rate will be increased shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Prices and the earlier and later Effective Dates or Redemption Notice Dates, as applicable, based on a 365-day year;

 

(ii)          if the Stock Price is greater than $10.00 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above pursuant to subsection (d) above), no Additional Shares shall be added to the Conversion Rate; and

 

(iii)         if the Stock Price is less than $0.98 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above pursuant to subsection (d) above), no Additional Shares shall be added to the Conversion Rate.

 

Notwithstanding the foregoing, in no event shall the Conversion Rate per $1,000 principal amount of Notes exceed 1,028.6539 shares of Common Stock, subject to adjustment in the same manner as the Conversion Rate pursuant to Section 13.05.

 

  

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(f)           Nothing in this Section 13.04 shall prevent an adjustment to the Conversion Rate pursuant to Section 13.05 in respect of a Make-Whole Fundamental Change or during a Redemption Period.

 

Section 13.05   Adjustment of Conversion Rate.  The Conversion Rate shall be adjusted from time to time by the Company if any of the following events occurs, except that the Company shall not make any adjustments to the Conversion Rate if Holders of the Notes participate (other than in the case of (x) a share split or share combination or (y) a tender or exchange offer, in each case, that would result in an adjustment to the conversion rate pursuant to Section 14.04(a) or Section 14.04(e) below), at the same time and upon the same terms as holders of the Common Stock and solely as a result of holding the Notes, in any of the transactions described in this Section 13.05, without having to convert their Notes, as if they held a number of shares of Common Stock equal to the Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.

 

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

 

where,

 

	
  

	
CR0

	
=

	
the Conversion Rate in effect immediately prior to the close of business on the Record Date of such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as applicable;

 

	
  

	
CR'

	
=

	
the Conversion Rate in effect immediately after the close of business on such Record Date or immediately after the open of business on such Effective Date, as applicable;

 

	
  

	
OS0

	
=

	
the number of shares of Common Stock outstanding immediately prior to the close of business on such Record Date or immediately prior to the open of business on such Effective Date, as applicable; and

 

	
  

	
OS'

	
=

	
the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination, as applicable.

 

Any adjustment made under this Section 13.05(a) shall become effective immediately after the close of business on the Record Date for such dividend or distribution, or immediately after the open of business on the Effective Date for such share split or share combination, as applicable.  If any dividend or distribution of the type described in this Section 13.05(a) is declared but not so paid or made, the Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

 

  

61

  

(b)           If the Company issues to all or substantially all holders of the Common Stock any rights, options or warrants entitling them, for a period of not more than 45 calendar days after the announcement date of such issuance, to subscribe for or purchase shares of the Common Stock at a price per share that is less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, the Conversion Rate shall be increased based on the following formula:

 

 

where,

 

	
  

	
CR0

	
=

	
the Conversion Rate in effect immediately prior to the close of business on the Record Date for such issuance;

 

	
  

	
CR'

	
=

	
the Conversion Rate in effect immediately after the close of business on such Record Date;

 

	
  

	
OS0

	
=

	
the number of shares of Common Stock outstanding immediately prior to the close of business on such Record Date;

 

	
  

	
X

	
=

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

 

	
  

	
Y

	
=

	
the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants.

 

Any increase made under this Section 13.05(b) shall be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the close of business on the Record Date for such issuance.  To the extent that shares of the Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered.  If such rights, options or warrants are not so issued, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such adjustment for such issuance had not occurred.

 

For purposes of this Section 13.05(b), in determining whether any rights, options or warrants entitle the holders to subscribe for or purchase shares of the Common Stock at a price per share that is less than such average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement for such issuance, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any 

 

  

62

  

consideration received by the Company for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors.

 

(c)           If the Company distributes shares of its Capital Stock, evidences of its indebtedness, other assets or property of the Company or rights, options or warrants to acquire its Capital Stock or other securities, to all or substantially all holders of the Common Stock, excluding (i) dividends, distributions or issuances as to which an adjustment was effected pursuant to Section 13.05(a) or Section 13.05(b), (ii) dividends or distributions paid exclusively in cash as to which an adjustment was effected pursuant to Section 13.05(d), (iii) distributions of Reference Property in a transaction described in Section 13.08(a), and (iv) Spin-Offs as to which the provisions set forth below in this Section 13.05(c) shall apply (any of such shares of Capital Stock, evidences of indebtedness, other assets or property or rights, options or warrants to acquire Capital Stock or other securities of the Company, the “Distributed Property”), then the Conversion Rate shall be increased based on the following formula:

 

 

where,

 

	
  

	
CR0

	
=

	
the Conversion Rate in effect immediately prior to the close of business on the Record Date for such distribution;

 

	
  

	
CR'

	
=

	
the Conversion Rate in effect immediately after the close of business on such Record Date;

 

	
  

	
SP0

	
=

	
the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and

 

	
  

	
FMV

	
=

	
the fair market value (as determined by the Board of Directors) of the Distributed Property with respect to each outstanding share of the Common Stock as of the open of business on the Record Date for such distribution.

 

Any increase made under the portion of this Section 13.05(c) above shall become effective immediately after the close of business on the Record Date for such distribution.  If any distribution of the type described in this portion of Section 13.05(c) is declared but not so paid or made, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such distribution had not been declared.

 

Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of the Common Stock, the amount and kind of Distributed Property such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Conversion Rate in effect on the Record Date for the distribution.  If the Board of Directors determines the 

 

  

63

  

“FMV” (as defined above) of any distribution for purposes of this Section 13.05(c) by reference to the actual or when-issued trading market for any securities, it shall in doing so consider the prices in such market over the same period used in computing the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution.

 

With respect to an adjustment pursuant to this Section 13.05(c) where there has been a payment of a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit of the Company, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a “Spin-Off”), the Conversion Rate shall be increased based on the following formula:

 

 

where,

 

	
  

	
CR0

	
=

	
the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such Spin-Off;

 

	
  

	
CR'

	
=

	
the Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such Spin-Off;

 

	
  

	
FMV0

	
=

	
the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock (determined by reference to the definition of Last Reported Sale Price as set forth in Section 1.01 as if references therein to Common Stock were to such Capital Stock or similar equity interest) over the first 10 consecutive Trading Day period after, and including, the Ex-Dividend Date of the Spin-Off (the “Valuation Period”); and

 

	
  

	
MP0

	
=

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

 

The increase to the Conversion Rate under the preceding paragraph shall be determined on the last Trading Day of the Valuation Period, but will be given effect at the open of business on the Ex-Dividend Date for such Spin-Off.  Notwithstanding the foregoing, in respect of any conversion of Notes during the Valuation Period, references in the portion of this Section 13.05(c) related to Spin-Offs with respect to 10 consecutive Trading Days shall be deemed to be replaced with such lesser number of Trading Days as have elapsed from and including, the Ex-Dividend Date of such Spin-Off to, but excluding, the Conversion Date in determining the Conversion Rate.  If such Spin-Off does not occur, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such distribution had not been declared, effective as of the date on which the Board of Directors determines not to consummate such Spin-Off.

 

  

64

  

For purposes of this Section 13.05(c) (and subject in all respect to Section 13.11), rights, options or warrants distributed by the Company to all or substantially all holders of the Common Stock entitling them to subscribe for or purchase shares of the Company’s Capital Stock, including Common Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of the Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of the Common Stock, shall be deemed not to have been distributed for purposes of this Section 13.05(c) (and no adjustment to the Conversion Rate under this Section 13.05(c) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants for which the Trigger Event has occurred shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 13.05(c). If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Ex-Dividend Date or Record Date, as applicable, with respect to new rights, options or warrants with such rights (in which case the existing rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights, options or warrants, or any Trigger Event or other event (of the type described in the immediately preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 13.05(c) was made, (1) in the case of any such rights, options or warrants that shall all have been redeemed or purchased without exercise by any holders thereof, upon such final redemption or purchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and (y) the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by a holder or holders of Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of Common Stock as of the date of such redemption or purchase, and (2) in the case of such rights, options or warrants that shall have expired or been terminated (or deemed to have expired or been terminated pursuant to the immediately preceding sentence) without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights, options and warrants had not been issued (to the extent any adjustment to the Conversion Rate was made in connection with such issuance).

 

For purposes of Section 13.05(a), Section 13.05(b) and this Section 13.05(c), if any dividend or distribution to which this Section 13.05(c) is applicable also includes one or both of:

 

(A) a dividend or distribution of shares of Common Stock to which Section 13.05(a) is applicable (the “Clause A Distribution”); or

 

(B) a dividend or distribution of rights, options or warrants to which Section 13.05(b) is applicable (the “Clause B Distribution”),

 

  

65

  

then, in either case, (1) such dividend or distribution, other than the Clause A Distribution and the Clause B Distribution, shall be deemed to be a dividend or distribution to which this Section 13.05(c) is applicable (the “Clause C Distribution”) and any Conversion Rate adjustment required by this Section 13.05(c) with respect to such Clause C Distribution shall then be made, and (2) the Clause A Distribution and Clause B Distribution shall be deemed to immediately follow the Clause C Distribution and any Conversion Rate adjustment required by Section 13.05(a) and Section 13.05(b) with respect thereto shall then be made, except that, if determined by the Company (I) the “Record Date” of the Clause A Distribution and the Clause B Distribution shall be deemed to be the Record Date of the Clause C Distribution and (II) any shares of Common Stock included in the Clause A Distribution or Clause B Distribution shall be deemed not to be “outstanding immediately prior to the close of business on such Record Date or immediately prior to the open of business on such Effective Date, as cppliable” within the meaning of Section 13.05(a) or “outstanding immediately prior to the close of business on such Record Date” within the meaning of Section 13.05(b).

 

(d)           If the Company pays any cash dividend or distribution to all or substantially all holders of the Common Stock, the Conversion Rate shall be adjusted based on the following formula:

 

 

where,

 

	
  

	
CR0

	
=

	
the Conversion Rate in effect immediately prior to the close of business on the Record Date for such dividend or distribution;

 

	
  

	
CR'

	
=

	
the Conversion Rate in effect immediately after the close of business on the Record Date for such dividend or distribution;

 

	
  

	
SP0

	
=

	
the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and

 

	
  

	
C

	
=

	
the amount in cash per share the Company distributes to all or substantially all holders of the Common Stock.

 

Any increase to the Conversion Rate pursuant to this Section 13.05(d) shall become effective immediately after the close of business on the Record Date for such dividend or distribution.  If such dividend or distribution is not so paid, the Conversion Rate shall be decreased, effective as of the date the Board of Directors determines not to make or pay such dividend or distribution, to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

 

Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall receive, in respect of each $1,000 principal amount of Notes, at the same time and upon the same terms as holders of shares of the Common Stock, the amount of cash that such Holder would have received if 

 

  

66

  

such Holder owned a number of shares of Common Stock equal to the Conversion Rate on the Record Date for such cash dividend or distribution.

 

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

 

 

where,

 

	
  

	
CR0

	
=

	
the Conversion Rate in effect immediately prior to the open of business on the Trading Day next succeeding the date such tender or exchange offer expires;

 

	
  

	
CR'

	
=

	
the Conversion Rate in effect immediately after the open of business on the Trading Day next succeeding the date such tender or exchange offer expires;

 

	
  

	
AC

	
=

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

 

	
  

	
OS0

	
=

	
the number of shares of Common Stock outstanding immediately prior to the open of business on the date such tender or exchange offer is consummated (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer);

 

	
  

	
OS'

	
=

	
the number of shares of Common Stock outstanding immediately after the open of business on the date such tender or exchange offer is consummated (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and

 

	
  

	
SP'

	
=

	
the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires.

 

The increase to the Conversion Rate under this Section 13.05(e) shall be determined at the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires, but will be given effect at the open of business on the Trading Day next succeeding the date such tender or exchange offer expires. Notwithstanding the foregoing, in respect of any conversion of Notes within the 10 Trading Days immediately following, and including, the Trading Day next succeeding the expiration date of any tender or exchange offer, references in this Section 13.05(e) with respect to 10 consecutive Trading Days shall be deemed replaced with such lesser number of Trading Days as have 

 

  

67

  

elapsed between the date that such tender or exchange offer expires and the Conversion Date in determining the Conversion Rate. For the avoidance of doubt, not adjustment under this Section 13.05(e) shall be made if such adjustment would result in a decrease in the Conversion Rate.

 

(f)           Notwithstanding this Section 13.05 or any other provision of this Indenture or the Notes if a Conversion Rate adjustment becomes effective on any Ex-Dividend Date, and a Holder that has converted its Notes on or after such Ex-Dividend Date  would be treated as the record holder of the shares of Common Stock as of the related Conversion Date as described under Section 13.02(i) based on an adjusted Conversion Rate for such Ex-Dividend Date, then, notwithstanding the Conversion Rate adjustment provisions in this Section 13.05, the Conversion Rate adjustment relating to such Ex-Dividend Date shall not be made for such converting Holder. Instead, such Holder shall be treated as if such Holder were the record owner of the shares of Common Stock on an unadjusted basis and participate in the related dividend, distribution or other event giving rise to such adjustment.

 

(g)           Except as stated herein, the Company shall not adjust the Conversion Rate for the issuance of shares of Common Stock or any securities convertible into or exchangeable for shares of Common Stock or the right to purchase shares of Common Stock or such convertible or exchangeable securities (including as consideration for a merger, purchase or similar transaction).

 

(h)           In addition to those adjustments required by clauses (a), (b), (c), (d) and (e) of this Section 13.05, and to the extent permitted by applicable law and subject to the applicable listing standards of The NASDAQ Global Market and any exchange on which the Company’s securities are then listed, the Company from time to time may increase the Conversion Rate by any amount for a period of at least 20 Business Days if the Board of Directors determines that such increase would be in the Company’s best interest.  In addition, to the extent permitted by applicable law and subject to the applicable rules of The NASDAQ Global Market and any exchange on which the Company’s securities are then listed, the Company may (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event.  Whenever the Conversion Rate is increased pursuant to either of the preceding two sentences, the Company shall mail to the Holder of each Note at its last address appearing on the Note Register a notice of the increase at least 15 calendar days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect. Notwithstanding Section 13.04 and this Section 13.05, certain listing standards of The NASDAQ Global Market may limit the amount by which the Company may increase the Conversion Rate pursuant to Section 13.04 and the events described in clauses (b), (c), (d) and (e) of this Section 13.05. These standards generally require the Company to obtain the approval of its stockholders before entering into certain transactions that could potentially result in the issuance of 20% or more of the Common Stock outstanding at the time the Notes are initially issued unless the Company obtains stockholder approval of issuances in excess of such limitations. In accordance with these listing standards, these restrictions will apply at any time when the Notes are outstanding, regardless of whether the Company then has a class of securities listed on The NASDAQ global Market. Accordingly, in the event of an increase in the Conversion Rate above that which would result in 

 

  

68

  

the Notes, in the aggregate, becoming convertible into shares in excess of such limitations, the Company will, at its option, either obtain stockholder approval of such issuances or pay cash in lieu of delivering any shares otherwise deliverable upon conversions in excess of such limitations based on the Last Reported Sale Price of the Common Stock on the applicable Conversion Date.

 

(i)           Notwithstanding anything to the contrary in this Article XIII, the Conversion Rate shall not be adjusted:

 

(i)           upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in shares of Common Stock under any plan;

 

(ii)           upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of the Company’s Subsidiaries;

 

(iii)           upon the issuance of any shares of the Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in clause (ii) of this subsection and outstanding as of the date the Notes were first issued;

 

(iv)           upon the repurchase of any shares of Common Stock pursuant to an open-market share repurchase program or other buy-back transaction that is not a tender offer or exchange offer of the kind described under Section 13.05(e)

 

(v)           solely for a change in the par value (or lack of par value) of the Common Stock; or

 

(vi)           for accrued and unpaid interest, if any.

 

All calculations and other determinations under this Article XIII shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000) of a share.

 

The Company shall not be required to make an adjustment pursuant to clauses (a), (b), (c), (d) or (e) of this Section 13.05 unless such adjustment would result in a change of at least 1% of the then effective Conversion Rate. However, the Company shall carry forward any adjustment to the Conversion Rate that the Company would otherwise have to make and take that adjustment into account in any subsequent adjustment. Notwithstanding the foregoing, all such carried-forward adjustments shall be made  (i) in connection with any subsequent adjustment to the Conversion Rate of at least 1% (when such carried-forward adjustments are taken into account), (ii)  on the Conversion Date for any Notes, (iii) upon the occurrence of any Make-Whole Fundamental Change or Fundamental Change or (iv) upon the Company’s issuance of any Notice of Redemption.

 

  

69

  

(j)           Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee (and the Conversion Agent if not the Trustee) an Officer’s Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment.  Unless and until a Responsible Officer of the Trustee shall have received such Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has knowledge is still in effect.  Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Rate to each Holder at its last address appearing on the Note Register of this Indenture, within 20 calendar days after the execution thereof.  Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

 

(k)           For purposes of this Section 13.05, the number of shares of Common Stock at any time outstanding shall not include shares of Common Stock held in the treasury of the Company so long as the Company does not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company, but shall include shares of Common Stock issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.

 

(l)           If the application of Conversion Rate adjustments pursuant to clauses (a), (b), (c), (d) and (e) of this Section 13.05 would result in a decrease in the Conversion Rate, no adjustment to the Conversion Rate will be made (other than as a result of a reverse share split or share combination or the reversal of an increase to the Conversion Rate where the relevant event did not occur, as specified in this Indenture).

 

Section 13.06   Adjustments of Prices.  Whenever any provision of this Indenture requires the Company to calculate the Last Reported Sale Prices over a span of multiple days (including the period for determining the Stock Price for purposes of a Make-Whole Fundamental Change or in connection with the issuance of a Notice of Redemption), the Board of Directors shall make appropriate adjustments (to the extent no corresponding adjustment is otherwise made pursuant to Section 13.05) to each to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date, Effective Date or expiration date, as the case may be, of the event occurs, at any time during the period when such Last Reported Sale Prices or Stock Prices are to be calculated.

 

Section 13.07            Shares to Be Reserved.  The Company shall provide, free from preemptive rights, out of its authorized but unissued shares or shares held in treasury, sufficient shares of Common Stock to provide for conversion of the Notes from time to time as such Notes are presented for conversion (assuming that at the time of computation of such number of shares, all such Notes would be converted by a single Holder).

 

Section 13.08            Effect of Recapitalizations, Reclassifications and Changes of the Common Stock.

 

  

70

  

(a)           In the case of:

 

(i)           any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination or change in par value),

 

(ii)          any consolidation, merger or combination involving the Company,

 

(iii)         any sale, lease or other transfer to a third party of the consolidated assets of the Company and the Company’s Subsidiaries substantially as an entirety or

 

(iv)         any statutory share exchange,

 

in each case, as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (any such event, a “Share Exchange Event”), then the Company or the successor or acquiring corporation, as the case may be, shall execute with the Trustee a supplemental indenture permitted under Section 10.01(i) providing that, at and after the effective time of such Share Exchange Event,  the right to convert each $1,000 principal amount of Notes shall be changed into a right to convert such principal amount of Notes into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such Share Exchange Event would have owned or been entitled to receive (the “Reference Property,” with each “unit of Reference Property” meaning the kind and amount of Reference Property that a holder of one share of Common Stock is entitled to receive) upon such Share Exchange Event and, prior to or at the effective time of such Share Exchange Event, the Company or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture permitted under Section 10.01(f) providing for such change in the right to convert each $1,000 principal amount of Notes; provided, however, that at and after the effective time of the Share Exchange Event (A) any shares of Common Stock that the Company would have been required to deliver upon conversion of the Notes in accordance with Section 13.02 shall instead be deliverable in the amount and type of Reference Property that a holder of that number of shares of Common Stock would have been entitled to receive in such Share Exchange Event and (B) the Last Reported Sale Price, to the extent possible, shall be calculated based on the value of a unit of Reference Property.

 

If the Share Exchange Event causes the Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), then (i) the Reference Property into which the Notes will be convertible shall be deemed to be (x) the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election or (y) if no holders of Common Stock affirmatively make such an election, the types and amounts of consideration actually received by the holders of Common Stock, and (ii) the unit of Reference Property for purposes of the immediately preceding paragraph shall refer to the consideration referred to in clause (i) attributable to one share of Common Stock.  If the holders receive only cash in such Share Exchange Event, then for all conversions that occur after the effective date of such Share Exchange Event the consideration due upon conversion of each $1,000 principal amount of Notes shall be solely cash in an amount equal to the Conversion Rate 

 

  

71

  

in effect on the Conversion Date (as may be increased by any Additional Shares pursuant to Section 13.04), multiplied by the price paid per share of Common Stock in such Share Exchange Event.  The Company shall notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) in writing of such weighted average as soon as practicable after such determination is made.

 

Such supplemental indenture described in the second immediately preceding paragraph shall provide for adjustments that shall be as nearly equivalent as is possible to the adjustments provided for in this Article XIII.  If, in the case of any Share Exchange Event, the Reference Property includes shares of stock, securities or other property or assets (including cash or any combination thereof) of a Person other than the successor or purchasing corporation, as the case may be, in such Share Exchange Event, then such supplemental indenture shall also be executed by such other Person and shall contain such additional provisions to protect the interests of the Holders of the Notes as the Board of Directors shall reasonably consider necessary by reason of the foregoing, including the provisions providing for the purchase rights set forth in Article XIV.

 

(b)           In the event the Company shall execute a supplemental indenture pursuant to subsection (a) of this Section 13.08, the Company shall promptly file with the Trustee an Officer’s Certificate briefly stating the reasons therefor, the kind or amount of cash, securities or property or asset that will comprise a unit of Reference Property after any such Share Exchange Event, any adjustment to be made with respect thereto and that all conditions precedent have been complied with, and shall promptly mail notice thereof to all Holders.  The Company shall cause notice of the execution of such supplemental indenture to be sent to each Holder, at its address appearing on the Note Register provided for in this Indenture, within 20 calendar days after execution thereof.  Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

 

(c)           The Company shall not become a party to any Share Exchange Event unless its terms are consistent with this Section 13.08.  None of the foregoing provisions shall affect the right of a holder of Notes to convert its Notes into Common Stock as set forth in Section 13.01 and Section 13.02 prior to the effective date of such Share Exchange Event.

 

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

 

Section 13.09            Certain Covenants.  (a) The Company covenants that any shares of Common Stock issued upon conversion of Notes will be validly issued, fully paid and non-assessable by the Company and free from all taxes, liens and charges with respect to the issue thereof.

 

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

 

  

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

 

Section 13.10   Responsibility of Trustee.  The Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility to any Holder to determine the Conversion Rate (or any adjustment thereto) or whether any facts exist that may require any adjustment (including any increase) of the Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same.  The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities, property or cash that may at any time be issued or delivered upon the conversion of any Note; and the Trustee and any other Conversion Agent make no representations with respect thereto.  Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Note for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article.  Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 13.0808 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Holders upon the conversion of their Notes after any event referred to in such Section 13.08 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 7.01, may accept (without any independent investigation) as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officer’s Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto.  Neither the Trustee nor the Conversion Agent shall be responsible for determining whether any event contemplated by Section 13.01(b) has occurred that makes the Notes eligible for conversion or no longer eligible therefor until the Company has delivered to the Trustee and the Conversion Agent the notices referred to in Section 13.01(b) with respect to the commencement or termination of such conversion rights, on which notices the Trustee and the Conversion Agent may conclusively rely, and the Company agrees to deliver such notices to the Trustee and the Conversion Agent immediately after the occurrence of any such event or at such other times as shall be provided for in Section 13.01(b).  The Conversion Agent (if other than the Company or an Affiliate of the Company) shall have the same protection under this Section 13.10 as the Trustee.

 

Section 13.11   Stockholder Rights Plans.  If the Company has a stockholder rights plan in effect upon conversion of the Notes, each share of Common Stock, if any, issued upon such conversion shall be entitled to receive the appropriate number of rights, if any, and the certificates representing the Common Stock issued upon such conversion shall bear such legends, if any, in each case as may be provided by the terms of any such stockholder rights plan, as the same may be amended from time to time. However, if prior to any conversion of Notes, the rights have separated from the shares of Common Stock in accordance with the provisions of 

 

  

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the applicable stockholder rights plan so that the Holders would not be entitled to receive any rights in respect of Common Stock, if any, issuable upon conversion of the Notes, the Conversion Rate shall be adjusted at the time of separation as if the Company distributed to all or substantially all holders of the Common Stock Distributed Property as provided in Section 13.05(c), subject to readjustment in the event of the expiration, termination or redemption of such rights.

 

Section 13.12            Notice to Holders Prior to Certain Actions.  In case of any:

 

(a)           action of the Company that would require an adjustment in the Conversion Rate pursuant to Section 13.05 or 13.11;

 

(b)           Share Exchange Event; or

 

(c)           voluntary or involuntary dissolution, liquidation or winding up of the Company;

 

then, in each case (unless notice of such event is otherwise required pursuant to another provision of this Indenture) and to the extent applicable, the Company shall cause to be filed with the Trustee and the Conversion Agent (if other than the Trustee) and to be mailed to each Holder at its address appearing on the Note Register, a notice stating the date on which a record is to be taken for the purpose of such action by the Company or, if a record is not to be taken, the date as of which the holders of Common Stock of record are to be determined for the purposes of such action by the Company no later than the earlier of the date notice of such date is required to be provided under Rule 10b-17 of the Exchange Act or applicable rules of The NASDAQ Global Market (or if the Common Stock is not then listed on The NASDAQ Global Market, the principal other U.S. national or regional securities exchange on which the Common Stock is then listed or admitted for trading) and such date is publicly announced by the Company. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such action by the Company, Share Exchange Event, dissolution, liquidation or winding-up.

 

ARTICLE XIV

Repurchase of Notes at Option of Holders

 

Section 14.01   Repurchase at Option of Holders Upon a Fundamental Change.  (a)  If a Fundamental Change occurs at any time prior to the Maturity Date, each Holder shall have the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Notes, or any portion of the principal amount thereof that is equal to $1,000 or an integral multiple of $1,000, on the date (the “Fundamental Change Repurchase Date”) specified by the Company that is not fewer than 20 calendar days or more than 35 Business Days following the date of the Fundamental Change Company Notice  at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to, but excluding, the Fundamental Change Repurchase Date (the “Fundamental Change Repurchase Price”), unless the Fundamental Change Repurchase Date falls after a Regular Record Date but on or prior to the Interest Payment Date to which such Regular Record Date relates, in which case the Company shall instead pay the full amount of accrued and unpaid interest to Holders of record as of such Regular Record Date, and the Fundamental Change Repurchase Price shall be equal to 100% of the principal amount of Notes to be repurchased pursuant to this Article XIV.

 

  

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(b)           On or before the 20th calendar day after the occurrence of a Fundamental Change, the Company shall provide to all Holders of Notes, the Conversion Agent, the Trustee, the Paying Agent (in the case of a Paying Agent other than the Trustee) and to beneficial owners of Notes as required by applicable law a written notice (the “Fundamental Change Company Notice”) of the occurrence of the Fundamental Change and of the repurchase right at the option of the Holders arising as a result thereof.  In the case of Physical Notes, such notice shall be by first class mail or, in the case of Global Notes, such notice shall be delivered in accordance with the applicable procedures of the Depositary.  Each Fundamental Change Company Notice shall specify:

 

(i)           the events causing the Fundamental Change;

 

(ii)          the effective date of the Fundamental Change;

 

(iii)         the last date on which a Holder may exercise the repurchase right pursuant to this Section 14.01;

 

(iv)         the Fundamental Change Repurchase Price;

 

(v)          the Fundamental Change Repurchase Date;

 

(vi)         the name and address of the Paying Agent and the Conversion Agent, if applicable;

 

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

 

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

 

(ix)          the procedures that Holders must follow to require the Company to repurchase their Notes.

 

No failure of the Company to give the foregoing notices and no defect therein shall limit the Holders’ repurchase rights or affect the validity of the proceedings for the repurchase of the Notes pursuant to this Section 14.01.

 

At the Company’s written request, the Trustee shall give such notice in the Company’s name and at the Company’s expense; provided, however, that, in all cases, the text of such Fundamental Change Company Notice shall be prepared by the Company.

 

Section 14.02   Repurchase at Option of Holders on Specified Repurchase Dates. (a) On April 20, 2020, April 20, 2025 and April 20, 2030 (each a “Specified Repurchase Date”), each Holder shall have the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Notes, or any portion thereof so long as the principal amount of such Holder’s Notes not submitted for repurchase equals $1,000 or an integral multiple of $1,000 in excess thereof, at a repurchase price equal to 100% of the principal amount thereof, plus accrued 

 

  

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and unpaid interest thereon, if any, to but excluding, the Specified Repurchase Date (the “Specified Repurchase Date Price”).

 

(b)           On or before the 25th Business Day prior to each Specified Repurchase Date, the Company shall provide to all Holders of Notes, the Trustee, the Paying Agent (in the case of a Paying Agent other than the Trustee) and to beneficial owners of Notes as required by applicable law, a written notice (the “Specified Repurchase Date Company Notice”) of the Specified Repurchase Date and of the repurchase right at the option of the Holders arising as a result thereof.  In the case of Physical Notes, such notice shall be by first class mail or, in the case of Global Notes, such notice shall be delivered in accordance with the applicable procedures of the Depositary.  Each Specified Repurchase Date Company Notice shall specify:

 

(i)           the applicable Specified Repurchase Date;

 

(ii)          the last date on which a Holder may exercise the repurchase right pursuant to this Section 14.02;

 

(iii)         the Specified Repurchase Date Price;

 

(iv)         if applicable, the name and address of the Paying Agent and the Conversion Agent;

 

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

 

(vi)         that the Notes with respect to which a Specified Repurchase Date Notice has been delivered by a holder may be converted only if the holder withdraws the Specified Repurchase Date Notice in accordance with the terms of this Indenture; and

 

(vii)        the procedures that Holders must follow to require the Company to repurchase their Notes.

 

No failure of the Company to give the foregoing notices and no defect therein shall limit the Holders’ repurchase rights or affect the validity of the proceedings for the repurchase of the Notes pursuant to this Section 14.02.

 

At the Company’s written request, the Trustee shall give such notice in the Company’s name and at the Company’s expense; provided, however, that, in all cases, the text of such Specified Repurchase Date Company Notice shall be prepared by the Company.

 

Section 14.03   Repurchase Procedures.

 

(a)           Repurchases of Notes under Section 14.01 and 14.02, as applicable, shall be made, at the option of the Holder thereof, upon:

 

(i)           delivery to the Paying Agent by a Holder of (x) a duly completed notice substantially in the form of the Form of Fundamental Change Repurchase Notice (the “Fundamental Change Repurchase Notice”) or (y) a duly completed notice 

 

  

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substantially in the form of the Form of Specified Repurchase Date Notice (the “Specified Repurchase Date Notice”), if the Notes are Physical Notes, or in compliance with the Depositary’s procedures for surrendering interests in Global Notes, if the Notes are Global Notes, in each case on or before the close of business on the second Business Day immediately preceding the (x) Fundamental Change Repurchase Date (the “Fundamental Change Expiration Time”) or (y) the applicable Specified Repurchase Date (the “Specified Repurchase Date Expiration Time,” as applicable; and

 

(ii)          delivery of the Notes, if the Notes are Physical Notes, to the Paying Agent at any time after delivery of the Fundamental Change Repurchase Notice (together with all necessary endorsements for transfer) at the Corporate Trust Office of the Paying Agent, or book-entry transfer of the Notes, if the Notes are Global Notes, in compliance with the procedures of the Depositary by the Fundamental Change Expiration Time or the Specified Purchase Date Expiration Time, as the case may be.

 

The Fundamental Change Repurchase Notice or Specified Repurchase Date Notice, as applicable, in respect of any Notes to be repurchased shall state:

 

(i)           in the case of Physical Notes, the certificate numbers of the Notes to be delivered for repurchase;

 

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

 

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

 

provided, however, that if the Notes are Global Notes, the Fundamental Change Repurchase Notice or Specified Repurchase Date Notice must comply with appropriate Depositary procedures.

 

Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Fundamental Change Repurchase Notice or Specified Repurchase Date Notice shall have the right to withdraw, in whole or in part, such Fundamental Change Repurchase Notice or Specified Repurchase Date Notice, as the case may be, at any time prior to the Fundamental Change Expiration Time or Specified Repurchase Date Expiration Time, as applicable, by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 14.04.

 

(b)           The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Repurchase Notice or Specified Repurchase Date Notice or written notice of withdrawal thereof.

 

(c)           Notwithstanding the foregoing, no Notes may be repurchased by the Company on any date at the option of the Holders upon a Fundamental Change or on a Specified Repurchase Date, as applicable, if the principal amount of the Notes has been accelerated, and such acceleration has not been rescinded, on or prior to such date (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Repurchase 

 

  

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Price or Specified Repurchase Date Price, as the case may be, with respect to such Notes). The Paying Agent will promptly return to the respective Holders thereof any Physical Notes held by it during the acceleration of the Notes (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Repurchase Price or Specified Repurchase Date Price, as the case may be, with respect to such Notes), or any instructions for book-entry transfer of the Notes in compliance with the procedures of the Depositary shall be deemed to have been cancelled, and, upon such return or cancellation, as the case may be, the Fundamental Change Repurchase Notice or Specified Repurchase Date Notice with respect thereto shall be deemed to have been withdrawn.

 

Section 14.04   Withdrawal of Fundamental Change Repurchase Notice or Specified Repurchase Date Notice.  (a)  A Fundamental Change Repurchase Notice or Specified Repurchase Date Notice may be withdrawn (in whole or in part) by means of a written notice of withdrawal delivered to the Paying Agent in accordance with this Section 14.04 at any time prior to the Fundamental Change Expiration Time or Specified Repurchase Date Expiration Time, as applicable, specifying:

 

(i)           the principal amount of the Notes with respect to which such notice of withdrawal is being submitted, which must be in principal amounts of $1,000 or an integral multiple thereof;

 

(ii)          if Physical Notes have been issued, the certificate number of the Note in respect of which such notice of withdrawal is being submitted, and

 

(iii)         the principal amount, if any, of such Note that remains subject to the original Fundamental Change Repurchase Notice or Specified Repurchase Date Notice, as the case may be, which must be in principal amounts of $1,000 or an integral multiple thereof;

 

provided, however, that if the Notes are Global Notes, the notice must comply with appropriate procedures of the Depositary. The Paying Agent will promptly return to the respective Holders thereof any Physical Notes with respect to which a Fundamental Change Repurchase Notice or a Specified Repurchase Date Notice, as applicable, has been withdrawn in compliance with the provisions of this Section 14.04.

 

Section 14.05            Deposit of Fundamental Change Repurchase Price and Specified Repurchase Date Price.  (a)  The Company will deposit with the Trustee (or other Paying Agent appointed by the Company, or if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in Section 4.04) on or prior to 10:00 a.m., New York City time, on the Fundamental Change Repurchase Date or Specified Repurchase Date, as applicable, an amount of money sufficient to repurchase all of the Notes to be repurchased at the appropriate Fundamental Change Repurchase Price or Specified Repurchase Date, as applicable.  Subject to receipt of funds and/or Notes by the Trustee (or other Paying Agent appointed by the Company), payment for Notes surrendered for repurchase (and not withdrawn prior to the Fundamental Change Expiration Time or the Specified Purchase Date Expiration Time, as applicable) will be made on the later of (i) the Fundamental Change Repurchase Date (provided the Holder has satisfied the conditions in Section 14.013) or the Specified Repurchase Date (provided the 

 

  

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Holder has satisfied the conditions in Section 14.01), as applicable and (ii) the time of book-entry transfer or the delivery of such Notes to the Trustee (or other Paying Agent appointed by the Company) by the Holder thereof in the manner required by Section 14.01 by mailing checks for the amount payable to the Holders of such Notes entitled thereto as they shall appear in the Note Register; provided, however, that payments to the Depositary shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee.  The Trustee shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Fundamental Change Repurchase Price or Specified Repurchase Date Price, as applicable.

 

(b)           If by 10:00 a.m. New York City time, on the Fundamental Change Repurchase Date or Specified Repurchase Date, as applicable, the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to make payment on all the Notes or portions thereof that are to be repurchased on such Fundamental Change Repurchase Date or Specified Repurchase Date, as applicable, then, with respect to Notes that have been properly surrendered for repurchase and have not been validly withdrawn in accordance with the provisions of this Indenture, (i) such Notes will cease to be outstanding, (ii) interest will cease to accrue on such Notes (whether or not book-entry transfer of the Notes has been made or the Notes have been delivered to the Trustee or Paying Agent) and (iii) all other rights of the Holders of such Notes will terminate (other than the right to receive the Fundamental Change Repurchase Price or Specified Repurchase Date Price, as the case may be).

 

(c)           Upon surrender of a Physical Note that is to be repurchased in part pursuant to Section 14.01 or Section 14.02, the Company shall execute and the Trustee shall authenticate and deliver to the Holder a new Note in an authorized denomination equal in principal amount to the unrepurchased portion of the Note surrendered.

 

Section 14.06   Covenant to Comply with Applicable Laws Upon Repurchase of Notes.  In connection with any repurchase offer pursuant to a Fundamental Change Company Notice or a Specified Repurchase Date Company Notice, the Company will, if required:

 

(a)           comply with the provisions of Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act that may be then applicable;

 

(b)           file a Schedule TO or any other required schedule under the Exchange Act; and

 

(c)           otherwise comply with all federal and state securities laws in connection with any offer by the Company to repurchase the Notes;

 

in each case, so as to permit the rights and obligations under this Article XIV to be exercised in the time and in the manner specified in this Article XIV.

 

To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture relating to the Company’s obligations to purchase the notes upon a Fundamental Change or on a Specified Repurchase Date, the Company shall comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under Article XIV by virtue of such conflict.

 

  

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ARTICLE XV

Optional Redemption

 

Section 15.01   Optional Redemption.  No sinking fund is provided for the Notes. The Notes shall not be redeemable by the Company prior to April 20, 2018. The Company may at its option redeem (an “Optional Redemption”) all or part of the Notes at any time on or after (i) April 20, 2018, if the Last Reported Sale Price of the Common Stock has been at least 130% of the Conversion Price for at least 20 Trading Days (whether or not consecutive) during any 30 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Redemption Notice Date and (ii) April 20, 2020, irrespective of the sale price condition described in clause (i), in each case, at a redemption price in cash equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date (the “Redemption Price”) (unless the Redemption Date falls after a Regular Record Date but on or prior to the immediately succeeding Interest Payment Date, in which case interest accrued to the Interest Payment Date will be paid to Holders of record of such Notes on such Regular Record Date, and the Redemption Price will be equal to 100% of the principal amount of the Notes to be redeemed).

 

Section 15.02            Notice of Optional Redemption; Selection of Notes.

 

(a)           In the case the Company elects to exercise its Optional Redemption pursuant to Section 15.01, the Company shall, in the related notice of such Optional Redemption (a “Notice of Redemption”), fix a date for redemption (each, a “Redemption Date”) and it or, at its written request received by the Trustee not less than 25 calendar days prior to the Redemption Date (or such shorter period of time as may be acceptable to the Trustee), the Trustee, in the name of and at the expense of the Company, shall mail or cause to be mailed a Notice of Redemption not less than 20 nor more than 60 calendar days prior to the Redemption Date to the Trustee, the Conversion Agent, the Paying Agent and each Holder so to be redeemed as a whole or in part at its last address as the same appears on the Note Register; provided, however, that if the Company shall give such notice, it shall also give written notice of the Redemption Date to the Trustee.

 

(b)           Reserved.

 

(c)           The date on which a Notice of Redemption is mailed pursuant to Section 15.02(a) is referred to as a “Redemption Notice Date.”

 

(d)           The Notice of Redemption, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice. In any case, failure to give such Notice of Redemption by mail or any defect in the Notice of Redemption to the Holder of any Note designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Note.

 

(e)           Each Redemption Notice shall specify:

 

(i)           the Redemption Date;

 

(ii)          the Redemption Price;

 

  

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

 

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

 

(v)          that Holders may surrender their Notes for conversion at any time prior to the close of business on the second Business Day immediately preceding the Redemption Date;

 

(vi)         the procedures a converting Holder must follow to convert its Notes;

 

(vii)        the Conversion Rate and, if applicable, the number of Additional Shares added to the Conversion Rate in accordance with Section 13.04;

 

(viii)       the CUSIP, ISIN or other similar numbers, if any, assigned to such Notes; and

 

(ix)          in case any Note is to be redeemed in part only, the portion of the principal amount thereof to be redeemed and on and after the Redemption Date, upon surrender of such Note, a new Note in principal amount equal to the unredeemed portion thereof shall be issued.

 

(f)           A Notice of Redemption must be irrevocable and may not be conditional.

 

(g)           A Redemption Date must be a Business Day.

 

(h)           If fewer than all of the outstanding Notes are to be redeemed, the Trustee shall select the Notes or portions thereof of a Global Note or the Notes in certificated form to be redeemed (in principal amounts of $1,000 or integral multiples thereof) by lot, on a pro rata basis or by another method the Trustee considers to be fair and appropriate; provided that, to the extent the Notes to be redeemed in part are represented by a Global Note, such method shall comply with the applicable procedures of the Depositary. If any Note selected for partial redemption is submitted for conversion in part after such selection, the portion of the Note submitted for conversion shall be deemed (so far as may be possible) to be the portion selected for redemption. In the event of any redemption in part, the Company shall not be required to  register the transfer of or exchange any Notes so selected for redemption, in whole or in part, except the unredeemed portion of any Notes being redeemed in part.

 

Section 15.03   Payment of Notes Called for Redemption.

 

(a)           If any Notice of Redemption has been given in respect of the Notes in accordance with Section 15.02, the Notes shall become due and payable on the Redemption Date at the place or places stated in the Notice of Redemption and at the applicable Redemption Price. On presentation and surrender of the Notes at the place or places stated in the Notice of Redemption, the Notes shall be paid and redeemed by the Company at the applicable Redemption Price.

 

  

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(b)           Prior to the open of business on the Redemption Date, the Company shall deposit with the Paying Agent or, if the Company or a Subsidiary of the Company is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 7.05 an amount of cash (in immediately available funds if deposited on the Redemption Date), sufficient to pay the Redemption Price of all of the Notes to be redeemed on such Redemption Date. Subject to receipt of funds by the Paying Agent, payment for the Notes to be redeemed shall be made promptly after the later of:

 

(i)           the Redemption Date for such Notes; and

 

(ii)          the time of presentation of such Note to the Trustee (or other Paying Agent appointed by the Company) by the Holder thereof in the manner required by this Section 15.03.

 

The Paying Agent shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Redemption Price. Upon surrender of a Physical Note that is to be redeemed in part pursuant to Article XV, the Company shall execute and the Trustee shall authenticate and deliver to the Holder a new Note in an authorized denomination equal in principal amount to the unredeemed portion of the Note surrendered.

 

Section 15.04   Restrictions on Redemption.  Notwithstanding the foregoing, the Company may not redeem any Notes on any date if the principal amount of the Notes has been accelerated, and such acceleration has not been rescinded, on or prior to the Redemption Date (except in the case of an acceleration resulting from a Default by the Company in the payment of the Redemption Price with respect to such Notes). The Paying Agent will promptly return to the respective Holders thereof any Physical Notes held by it during the acceleration of the Notes (except in the case of an acceleration resulting from a Default by the Company in the payment of the Redemption Price with respect to such Notes), or any instructions for book-entry transfer of the Notes in compliance with the procedures of the Depositary shall be deemed to have been cancelled.

 

ARTICLE XVI

Miscellaneous Provisions

 

Section 16.01   Provisions Binding on Company’s Successors.  All the covenants, stipulations, promises and agreements of the Company contained in this Indenture shall bind its successors and assigns whether so expressed or not.

 

Section 16.02            Official Acts by Successor Corporation.  Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or Officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation or other entity that shall at the time be the lawful sole successor of the Company.

 

Section 16.03            Addresses for Notices, Etc.  Any notice or demand that by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Holders on the Company shall be deemed to have been sufficiently given or made, for all purposes if 

 

  

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given or served by being deposited postage prepaid by registered or certified mail in a post office letter box addressed (until another address is filed by the Company with the Trustee) to Cinedigm Corp., Cinedigm Corp., 902 Broadway 9th Floor New York, NY 10010, Attention: General Counsel.  Any notice, direction, request or demand hereunder to or upon the Trustee or Responsible Officer of the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if it is in writing and if given or served by being deposited postage prepaid by registered or certified mail in a post office letter box addressed to the Corporate Trust Office or sent electronically in PDF format.

 

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

 

Any notice or communication mailed to a Holder shall be mailed to it by first class mail, postage prepaid, at its address as it appears on the Note Register and shall be sufficiently given to it if so mailed within the time prescribed. Any notice or communication to a Holder of a Global Note may be made via electronic transmission (email or fax) or otherwise through the facilities of the Depositary.

 

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.  If a notice or communication is mailed in the manner provided above, it is duly given, 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 impracticable to give such notice to Holders by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

 

Section 16.04   Governing Law.  THIS INDENTURE AND EACH NOTE, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS INDENTURE AND EACH NOTE, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW).

 

The Company irrevocably consents and agrees, for the benefit of the Holders from time to time of the Notes and the Trustee, that any legal action, suit or proceeding against it with respect to obligations, liabilities or any other matter arising out of or in connection with this Indenture or the Notes may be brought in the courts of the State of New York or the courts of the United States located in New York, New York and, until amounts due and to become due in respect of the Notes have been paid, hereby irrevocably consents and submits to the non-exclusive jurisdiction of each such court in personam, generally and unconditionally with respect to any action, suit or proceeding for itself in respect of its properties, assets and revenues.

 

The Company irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this Indenture brought in the courts of the State of New York or the courts of the United States located in the 

 

  

83

  

Borough of Manhattan, New York City, New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

 

Section 16.05            Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee.  Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officer’s Certificate and an Opinion of Counsel stating that such action is permitted by the terms of this Indenture.

 

Each Officer’s Certificate provided for, by or on behalf of the Company in this Indenture and delivered to the Trustee with respect to compliance with this Indenture (other than the Officer’s Certificates provided for in Section 4.08) shall include (a) a statement that the persons signing such certificate are familiar with the requested action and this Indenture; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statement contained in such certificate is based; (c) a statement that, in the judgment of each such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed judgment as to whether or not such action is permitted by this Indenture; and (d) a statement as to whether or not, in the judgment of each such person, such action is permitted by this Indenture.

 

Notwithstanding anything to the contrary in this Section 16.05, if any provision in this Indenture specifically provides that the Trustee shall or may receive an Opinion of Counsel in connection with any action to be taken by the Trustee or the Company hereunder, the Trustee shall be entitled to, or entitled to request, such Opinion of Counsel.

 

Section 16.06   Legal Holidays.  In any case where any Interest Payment Date, Fundamental Change Repurchase Date, Specified Repurchase Date or Maturity Date is not a Business Day, then any action to be taken on such date need not be taken on such date, but may be taken on the next succeeding Business Day with the same force and effect as if taken on such date, and no interest shall accrue or be paid in respect of the delay.

 

Section 16.07            No Security Interest Created.  Nothing in this Indenture or in the Notes, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.

 

Section 16.08            Benefits of Indenture.  Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the Holders, the parties hereto, any Paying Agent, any Conversion Agent, any authenticating agent, any Note Registrar and their successors hereunder, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 16.09            Table of Contents, Headings, Etc.  The table of contents and the titles and headings of the articles and sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

 

  

84

  

Section 16.10            Authenticating Agent.  The Trustee may appoint an authenticating agent that shall be authorized to act on its behalf and subject to its direction in the authentication and delivery of Notes in connection with the original issuance thereof and transfers and exchanges of Notes hereunder, including under Section 2.04, Section 2.05, Section 2.06, Section 2.07, Section 10.04, Section 14.05 and Section 15.03(b) as fully to all intents and purposes as though the authenticating agent had been expressly authorized by this Indenture and those Sections to authenticate and deliver Notes.  For all purposes of this Indenture, the authentication and delivery of Notes by the authenticating agent shall be deemed to be authentication and delivery of such Notes “by the Trustee” and a certificate of authentication executed on behalf of the Trustee by an authenticating agent shall be deemed to satisfy any requirement hereunder or in the Notes for the Trustee’s certificate of authentication.  Such authenticating agent shall at all times be a Person eligible to serve as trustee hereunder pursuant to Section 7.08.

 

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

 

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

 

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

 

The provisions of Section 7.02, Section 7.03, Section 7.04, Section 8.03 and this Section 16.10 shall be applicable to any authenticating agent.

 

If an authenticating agent is appointed pursuant to this Section 16.10, the Notes may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:

 

__________________________,

as Authenticating Agent, certifies that this is one of the Notes described

in the within-named Indenture.

 

  

85

  

By: ____________________

Authorized Signatory

 

Section 16.11   Execution in Counterparts.  This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.  The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

Section 16.12            Severability.  In the event any provision of this Indenture or in the Notes shall be invalid, illegal or unenforceable, then (to the extent permitted by applicable law) the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired.

 

Section 16.13            Waiver of Jury Trial.  EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 16.14   Force Majeure.  In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, executive order, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

Section 16.15            Calculations.  Except as otherwise provided herein, the Company shall be responsible for making all calculations called for under the Notes.  These calculations include, but are not limited to, determinations of the Last Reported Sale Prices of the Common Stock, accrued interest payable on the Notes and the Conversion Rate of the Notes.  The Company shall make all these calculations in good faith and, absent manifest error, the Company’s calculations shall be final and binding on Holders, the Trustee and the Conversion Agent.  The Company shall provide a schedule of its calculations to each of the Trustee and the Conversion Agent upon request, and each of the Trustee and Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification.  The Trustee will forward the Company’s calculations to any Holder upon the request of that Holder at the sole cost and expense of the Company.

 

Section 16.16            USA PATRIOT Act.  The parties hereto acknowledge that in accordance with Section 326 of the USA PATRIOT Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify and record information that identifies each person or legal entity that establishes a relationship or 

 

  

86

  

opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the USA PATRIOT Act.

 

[Remainder of Page Intentionally Left Blank]

 

 

 

 

 

 

  

87

  

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

 

	 	
CINEDIGM CORP.

	 	 	 
	 	 	 
	 	 	 
	 	
By:     

	 /s/ Gary S. Loffredo 
	 	 	
Name: Gary S. Loffredo

	 	 	
Title:   President of Digital Cinema,

            General Counsel and Secretary

	 	 	 

 

 

	 	
U.S. BANK NATIONAL ASSOCIATION,

as Trustee

	 	 
	 	 
	 	 
	 	
By: 

	 /s/ Linda E. Garcia
	 	 	
Name: Linda E. Garcia

	 	 	
Title:   Vice President

	 	 	 
	 	
  

	 	
  

 

  

  

  

EXHIBIT A

 

[FORM OF FACE OF NOTE]

 

[INCLUDE FOLLOWING LEGEND IF A GLOBAL NOTE]

 

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREUNDER IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

 

[INCLUDE FOLLOWING LEGEND IF A RESTRICTED SECURITY]

 

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

 

(A)           TO CINEDIGM CORP. (THE ‘‘COMPANY’’) OR ANY SUBSIDIARY THEREOF;

 

(B)           PURSUANT TO, AND IN ACCORDANCE WITH, A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER;

 

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

 

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

 

THE ‘‘RESALE RESTRICTION TERMINATION DATE’’ MEANS THE LATER OF: (1) THE DATE THAT IS ONE YEAR AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THE NOTES OR SUCH SHORTER PERIOD OF TIME PERMITTED BY RULE 144 OR ANY SUCCESSOR PROVISION THERETO; AND (2) SUCH OTHER DATE AS MAY BE REQUIRED BY APPLICABLE LAW.

 

  

A-1

  

WITH RESPECT TO ANY TRANSFER PURSUANT TO THE FOREGOING CLAUSE (D), PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE AND MAY RELY UPON TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.]1

 

 

 

 

 

 

 

 

	
1 This Restricted Security legend shall be deemed removed from the face of this Security without further action of the Company, the Trustee, or the holders of this Security at such time as the Company instructs the Trustee to remove such legend pursuant to Section 2.05(c) of the Indenture.

  

A-2

  

Cinedigm Corp.

 

5.5% Convertible Senior Note due 2035

 

	No. _____	 Initially $________

 

CUSIP No.  172406 AA82

 

Cinedigm Corp., a corporation duly organized and validly existing under the laws of the State of Delaware (the “Company,” which term includes any successor corporation or other entity under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to CEDE & CO., or registered assigns, the principal sum [as set forth in the “Schedule of Exchanges of Notes” attached hereto]3[of $_______ (  DOLLARS)]4, which amount, taken together with the principal amounts of all other outstanding Notes, shall not, unless permitted by the Indenture, exceed $64,000,000 in aggregate at any time, in accordance with the rules and procedures of the Depositary, on the Maturity Date, and interest thereon as set forth below.

 

This Note shall accrue interest at the rate of 5.5% per year from April 29, 2015, or from the most recent date for which interest has been paid or provided for to, but excluding, the next scheduled Interest Payment Date.  Accrued interest on this Note shall be computed on the basis of a 360-day year composed of twelve 30-day months and, for partial months, on the basis of actual days elapsed over a 30-day month.  Interest is payable semi-annually in arrears on each April 15 and October 15, commencing on October 15, 2015, to Holders of record at the close of business on the preceding April 1 and October 1 (whether or not such day is a Business Day), respectively.  Additional Interest will be payable as set forth in Section 4.06(d), Section 4.06(e) and Section 6.03 of the within-mentioned Indenture, and any reference to interest on, or in respect of, any Note therein shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of such Section 4.06(d), Section 4.06(e) or Section 6.03 and any express mention of the payment of Additional Interest in any provision therein shall not be construed as excluding Additional Interest in those provisions thereof where such express mention is not made.

 

Any Defaulted Amounts shall accrue interest per annum at the rate borne by the Notes, subject to the enforceability thereof under applicable law, from, and including, the relevant payment date to, but excluding, the date on which such Defaulted Amounts shall have been paid by the Company, at its election, in accordance with Section 2.03(c) of the Indenture.

 

The Company shall pay the principal of and interest on this Note, if and so long as such Note is a Global Note, in immediately available funds in lawful money of the United States at the  

	
2 At such time as the Company notifies the Trustee to remove the Restricted Security legend pursuant to Section 2.05(c) of the Indenture, the CUSIP number for this Security shall be deemed to be CUSIP No. 172406 AB6.

  

	
3 Include for a Global Note.

  

	
4 Include for a Physical Note.

  

A-3

  

time to the Depositary or its nominee, as the case may be, as the registered Holder of such Note. As provided in and subject to the provisions of the Indenture, the Company shall pay the principal of any Notes (other than Notes that are Global Notes) at the office or agency designated by the Company for that purpose. The Company has initially designated the Trustee as its Paying Agent and Note Registrar in respect of the Notes.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, including, without limitation, provisions giving the Holder of this Note the right to convert this Note into shares of Common Stock on the terms and subject to the limitations set forth in the Indenture. Such further provisions shall for all purposes have the same effect as though fully set forth at this place.

 

This Note, and any claim, controversy or dispute arising under or related to this Note, shall be construed in accordance with and governed by the laws of the State of New York (without regard to the conflicts of laws provisions thereof other than Section 5-1401 of the General Obligations Law).

 

In the case of any conflict between this Note and the Indenture, the provisions of the Indenture shall control and govern.

 

This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed manually or by facsimile by the Trustee or a duly authorized authenticating agent under the Indenture.

 

[Remainder of Page Intentionally Left Blank]

 

 

  

A-4

  

 

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

 

	 	
CINEDIGM CORP.

	 	 	 
	 	
By: 

	 
	 	 	
Name: 

	 	 	
Title: 

	 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

U.S. BANK NATIONAL ASSOCIATION,

as Trustee, certifies that this is one of the Notes described

in the within-named Indenture.

 

 

By:_______________________________

      Authorized Signatory

 

 

Dated: April 29, 2015

 

 

  

A-5

  

[FORM OF REVERSE OF NOTE]

 

Cinedigm Corp.

5.5% Convertible Senior Note due 2035

 

This Note is one of a duly authorized issue of Notes of the Company, designated as its 5.5% Convertible Senior Notes due 2035 (the “Notes”), initially limited to the aggregate principal amount of $64,000,000, all issued or to be issued under and pursuant to an Indenture dated as of April 29, 2015 (the “Indenture”), between the Company and U.S. Bank National Association (the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Notes.  Additional Notes may be issued in an unlimited aggregate principal amount, subject to certain conditions specified in the Indenture.  Capitalized terms used in this Note and not defined in this Note shall have the respective meanings set forth in the Indenture.

 

In the event of certain Events of Default (other than an Event of Default specified in Section 6.01(i) or Section 6.01(j) of the Indenture with respect to the Company) shall have occurred and be continuing, the principal of, and interest on, all Notes may be declared, by either the Trustee or Holders of at least 25% in aggregate principal amount of the Notes then outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions and certain exceptions set forth in the Indenture.

 

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

 

The Indenture contains provisions permitting the Company and the Trustee in certain circumstances, without the consent of the Holders of the Notes, and in certain other circumstances, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding, evidenced as in the Indenture provided, to execute supplemental indentures modifying the terms of the Indenture and the Notes as described therein.  It is also provided in the Indenture that, subject to certain exceptions, the Holders of a majority in aggregate principal amount of the Notes at the time outstanding may on behalf of the Holders of all of the Notes waive any past Default or Event of Default under the Indenture and its consequences.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay or deliver, as the case may be, the principal (including the Fundamental Change Repurchase Price, the Specified Repurchase Date Price and the Redemption Price, if applicable) of, accrued and unpaid interest on, and the consideration due upon conversion of, this Note at the place, at the respective times, at the rate and in the lawful money herein prescribed.

 

  

A-6

  

The Notes are issuable in registered form without coupons in denominations of $1,000 principal amount and integral multiples thereof.  At the office or agency of the Company referred to on the face hereof, and in the manner and subject to the limitations provided in the Indenture, Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations, without payment of any service charge but, if required by the Company or Trustee, with payment of a sum sufficient to cover any transfer or similar tax that may be imposed in connection therewith as a result of the name of the Holder of the new Notes issued upon such exchange of Notes being different from the name of the Holder of the old Notes surrendered for such exchange.

 

The Notes shall be redeemable at the Company’s option in accordance with the terms and conditions specified in the Indenture.

 

Upon the occurrence of a Fundamental Change, the Holder has the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Notes or any portion thereof (in principal amounts of $1,000 or integral multiples thereof) on the Fundamental Change Repurchase Date at a price equal to the Fundamental Change Repurchase Price.

 

On April 20, 2020, April 20, 2025 and April 20, 2030, each Holder shall have the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Notes, or any portion thereof (in principal amount of $1,000 or integral multiples thereof) each date at a repurchase price equal to the Specified Repurchase Date Price.

 

Subject to the provisions of the Indenture, the Holder hereof has the right, prior to the close of business on the Business Day immediately preceding the Maturity Date, to convert any Notes or portion thereof that is $1,000 or an integral multiple thereof, into shares of Common Stock at the Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture.

 

ABBREVIATIONS

 

The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:

 

TEN COM = as tenants in common

 

UNIF GIFT MIN ACT = Uniform Gifts to Minors Act

 

CUST = Custodian

 

TEN ENT = as tenants by the entireties

 

JT TEN  = joint tenants with right of survivorship and not as tenants in common

 

Additional abbreviations may also be used though not in the above list.

 

  

A-7

  

SCHEDULE A

 

SCHEDULE OF EXCHANGES OF NOTES

 

Cinedigm Corp.

5.5% Convertible Senior Notes due 2035

 

The initial principal amount of this Global Note is [            ] DOLLARS ($[             ]).  The following increases or decreases in this Global Note have been made:

 

 

	

Date of exchange

	

Amount of decrease

in principal amount of

this Global Note

	

Amount of increase in

principal amount of

this Global Note

	

Principal amount of

this Global Note

following such

decrease or increase

	

Signature of

authorized signatory

of Trustee or

Custodian

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

  

A-8

  

ATTACHMENT 1

 

[FORM OF NOTICE OF CONVERSION]

 

Cinedigm Corp.

5.5% Convertible Senior Notes due 2035

 

To:  Cinedigm Corp., 902 Broadway 9th Floor, New York, NY 10010

To: U.S. Bank National Association, 190 S. LaSalle Street, 10th Floor, MK-IL-SLTR, Chicago, Illinois 60603, Attention: Global Corporate Trust

 

The undersigned registered owner of this Note hereby exercises the option to convert this Note, or the portion hereof (that is $1,000 principal amount or an integral multiple thereof) below designated, into shares of Common Stock in accordance with the terms of the Indenture referred to in this Note, and directs that the shares of Common Stock issuable and deliverable upon such conversion, together with any cash for any fractional share, and any Notes representing any unconverted principal amount hereof, be issued and delivered to the registered Holder hereof unless a different name has been indicated below.  If any shares of Common Stock or any portion of this Note not converted are to be issued in the name of a Person other than the undersigned, the undersigned will pay all documentary, stamp or similar issue or transfer taxes, if any in accordance with Section 13.02(d) and Section 13.02(e) of the Indenture.  Any amount required to be paid to the undersigned on account of interest accompanies this Note. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.

 

 

	Dated:	 	 	 	 
	 	 	 	 	 
	 	 	 	Signature(s) 
	 	 	 	 
	 	 	 	 
	 	 	 
	Signature Guarantee 	 	 

 

Signature(s) must be guaranteed

by an eligible Guarantor Institution

(banks, stock brokers, savings and

loan associations and credit unions)

with membership in an approved

signature guarantee medallion program

pursuant to Securities and Exchange

Commission Rule 17Ad-15 if shares

of Common Stock are to be issued, or

Notes are to be delivered, other than

to and in the name of the registered holder.

 

  

A-9

  

Fill in for registration of shares if

to be issued, and Notes if to

be delivered, other than to and in the

name of the registered holder:

 

	 	 	 
	(Name) 	 	 
	 	 	 
	 	 	 
	(Street Address) 	 	 
	 	 	 
	 	 	 
	(City, State and Zip Code)

Please print name and address 	 	 
	 	 	 
	 	 	
Principal amount to be converted (if less than all):

$______,000

  

NOTICE: The above signature(s) of the Holder(s) hereof

must correspond with the name as written upon the face of

the Note in every particular without alteration or

enlargement or any change whatever.

 

_________________________

Social Security or Other Taxpayer

Identification Number

  

 
	 	 	 

 

  

A-10

  

ATTACHMENT 2

 

[FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]

 

Cinedigm Corp.

5.5% Convertible Senior Notes due 2035

 

To:   Cinedigm Corp., 902 Broadway 9th Floor, New York, NY 10010

 

To: U.S. Bank National Association, 190 S. LaSalle Street, 10th Floor, MK-IL-SLTR, Chicago, Illinois 60603, Attention: Global Corporate Trust

 

The undersigned registered owner of this Note hereby acknowledges receipt of a notice from Cinedigm Corp. (the “Company”) as to the occurrence of a Fundamental Change with respect to the Company and specifying the Fundamental Change Repurchase Date and requests and instructs the Company to pay to the registered holder hereof in accordance with the applicable provisions of the Indenture referred to in this Note (1) the entire principal amount of this Note, or the portion thereof (that is $1,000 principal amount or an integral multiple thereof) below designated, and (2) if such Fundamental Change Repurchase Date does not fall during the period after a Regular Record Date and on or prior to the second Business Day immediately following the corresponding Interest Payment Date, accrued and unpaid interest, if any, thereon to, but excluding, such Fundamental Change Repurchase Date. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.

 

In the case of Physical Notes, the certificate numbers of the Notes to be repurchased are as set forth below:

 

	Dated: 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	Signature(s) 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	
  

_________________________

Social Security or Other Taxpayer

Identification Number

 

Principal amount to be repurchased by the Company (if less than

all): $______,000

 

NOTICE: The above signature(s) of the Holder(s) hereof must

correspond with the name as written upon the face of the Note in

every particular without alteration or enlargement or any change

whatever.

  

 

 

 

  

A-11

  

ATTACHMENT 3

 

[FORM OF SPECIFIED REPURCHASE DATE NOTICE]

 

Cinedigm Corp.

5.5% Convertible Senior Notes due 2035

 

To:   Cinedigm Corp., 902 Broadway 9th Floor, New York, NY 10010

 

To: U.S. Bank National Association, 190 S. LaSalle Street, 10th Floor, MK-IL-SLTR, Chicago, Illinois 60603, Attention: Global Corporate Trust

 

The undersigned registered owner of this Note hereby acknowledges receipt of a Specified Repurchase Date Company Notice from Cinedigm Corp. (the “Company”) and specifying the Specified Repurchase Date and requests and instructs the Company to pay to the registered holder hereof in accordance with the applicable provisions of the Indenture referred to in this Note the entire principal amount of this Note, or the portion thereof (that is $1,000 principal amount or an integral multiple thereof) below designated and accrued and unpaid interest, if any, thereon to, but excluding, such Specified Repurchase Date. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.

 

In the case of Physical Notes, the certificate numbers of the Notes to be repurchased are as set forth below:

 

	Dated: 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	Signature(s) 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	
  

_________________________

Social Security or Other Taxpayer

Identification Number

  

Principal amount to be repurchased by the Company (if less than

all): $______,000

  

NOTICE: The above signature(s) of the Holder(s) hereof must

correspond with the name as written upon the face of the Note in

every particular without alteration or enlargement or any change

whatever.

  

 

  

A-12

  

ATTACHMENT 4

 

[FORM OF ASSIGNMENT AND TRANSFER]

 

Cinedigm Corp.

5.5% Convertible Senior Notes due 2035

 

U.S. Bank National Association

as Trustee and Note Registrar

190 S. LaSalle Street, 10th Floor, MK-IL-SLTR,

Chicago, Illinois 60603

Attention: Global Corporate Trust

 

For value received ____________________________ hereby sell(s), assign(s) and transfer(s) unto _________________ (Please insert social security or Taxpayer Identification Number of assignee) the within Note, and hereby irrevocably constitutes and appoints _____________________ attorney to transfer the said Note on the books of the Company, with full power of substitution in the premises.

 

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

 

□ To Cinedigm Corp. or a subsidiary thereof; or

 

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

 

□ Pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or

 

□ Pursuant to any other available exemption from the registration requirements of the Securities Act of 1933, as amended (including, if available, the exemption provided by Rule 144 under the Securities Act of 1933, as amended).

 

Dated: ________________________

 

_____________________________________

 

_____________________________________

 

Signature(s)

 

_____________________________________

 

Signature Guarantee

 

  

A-13

  

Signature(s) must be guaranteed by an

eligible Guarantor Institution (banks, stock

brokers, savings and loan associations and

credit unions) with membership in an approved

signature guarantee medallion program pursuant

to Securities and Exchange Commission

Rule 17Ad-15 if Notes are to be delivered, other

than to and in the name of the registered holder.

 

NOTICE:  The signature on the assignment must correspond with the name as written upon the

face of the Note in every particular without alteration or enlargement or any change whatever.

 

 

 

 

 

  

A-14

  

EXHIBIT B

 

 [FORM OF FREE TRANSFERABILITY CERTIFICATE]

U.S. Bank National Association

as Trustee and Note Registrar

190 S. LaSalle Street, 10th Floor, MK-IL-SLTR,

Chicago, Illinois 60603

Attention: Global Corporate Trust

Dear Sir or Madam:

Whereas the 5.5% Convertible Senior Notes due 2035 (the “Notes”) have become freely tradable without restriction by persons who are non-affiliates (and have been non-affiliates during the prior three months) of Cinedigm Corp. (the “Company”) pursuant to Rule 144(b)(1) under the Securities Act of 1933, as amended, in accordance with Section 2.05(c) of the indenture, dated as of April 29, 2015 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee, pursuant to which the Notes were issued, the Company hereby instructs you that:

	
  

	
(i)

	
the restrictive legends described in Section 2.05(c) of the Indenture and set forth on the Notes and Common Stock issued or issuable upon conversion of the Notes will be deemed removed from the global securities representing such securities, in accordance with the terms and conditions of the Notes and as provided in the Indenture, without further action on the part of holders; and

	
  

	
(ii)

	
the restricted CUSIP number for the Notes will be deemed removed from the Global Notes and replaced with the unrestricted CUSIP number set forth therein, in accordance with the terms and conditions of the Notes and as provided in the Indenture, without further action on the part of holders.

Capitalized terms used but not defined herein have the meanings set forth in the Indenture.

Very truly yours,

	
CINEDIGM CORP.

	 
	 	 
	 	 
	 	 
	
By:     

	  	 
	 	Name: 	 
	 	Title: 	 

  

B-1exh10-1_4128789.htm

 

EXHIBIT 10.1

EXECUTION COPY

 

Cinedigm Corp.

 

5.5% Convertible Senior Notes due 2035

 

PURCHASE AGREEMENT

 

April 23, 2015

 

PIPER JAFFRAY & CO.

c/o Piper Jaffray & Co.

U.S. Bancorp Center

800 Nicollet Mall

Minneapolis, Minnesota  55402

 

Ladies and Gentlemen:

 

Cinedigm Corp., a Delaware corporation (the “Company”), proposes to sell to the sole Initial Purchaser named in Schedule I hereto (the “Initial Purchaser”) $64,000,000 principal amount of its 5.5% Convertible Senior Notes due 2035 (the “Securities”). The Securities will be issued pursuant to an Indenture to be dated on or about April 29, 2015, between the Company and U.S. Bank National Association, as trustee (the “Trustee”) (the “Indenture”).  The Securities will be convertible into cash, shares (the “Underlying Securities”) of the Class A common stock, par value $0.001 per share (the “Common Stock”), of the Company, or a combination thereof in accordance with the terms of the Indenture.

 

In connection with the offering of the Securities, the Company and Société Générale (the “Counterparty”) are entering into a forward stock purchase transaction pursuant to a forward stock purchase confirmation (the “Prepaid Forward Confirmation”).

 

This Agreement, the Indenture, the Securities and the Prepaid Forward Confirmation are herein collectively called the “Transaction Documents.”

 

The Company hereby confirms its agreement with respect to the sale of the Securities to the Initial Purchaser, who is also acting as the sole representative (the “Representative”).

 

1.           Preliminary Offering Memorandum; Offering Memorandum; Time of Sale Disclosure Package.

 

The Securities will be sold to the Initial Purchaser without being registered under the Securities Act of 1933, as amended (the “Securities Act” or “Act”), and the rules and regulations (the “Rules and Regulations”) of the Securities and Exchange Commission (the “Commission”) thereunder, in reliance upon an exemption therefrom.   The Company has prepared a preliminary offering memorandum dated April 23, 2015 (the “Preliminary Offering Memorandum”) and will prepare an offering memorandum dated the date hereof (the “Offering Memorandum”) setting forth information concerning the Company and the Securities. Copies of the Preliminary Offering Memorandum have been, and copies of the Offering Memorandum will be, delivered

 

  

  

  

 by the Company to the Initial Purchaser pursuant to the terms of this Agreement. The Company hereby confirms that it has authorized the use of the Preliminary Offering Memorandum, the other documents included in the Time of Sale Disclosure Package (as defined below) and the Offering Memorandum in connection with the offering and resale of the Securities by the Initial Purchaser in the manner contemplated by this Agreement. References herein to the Preliminary Offering Memorandum, the Time of Sale Disclosure Package and the Offering Memorandum shall be deemed to refer to and include any document incorporated by reference therein.  References herein to the Preliminary Offering Memorandum, the Time of Sale Disclosure Package or the Offering Memorandum shall be deemed to refer to include the documents incorporated by reference therein.

 

All references in this Agreement to financial statements and schedules and other information which is “described,” “contained,” “included” or “stated” (or other references of a like import) in the Preliminary Offering Memorandum, the Time of Sale Disclosure Package or the Offering Memorandum shall be deemed to include all such financial statements and schedules and other information which are incorporated by reference in the Preliminary Offering Memorandum, the Time of Sale Disclosure Package or Offering Memorandum, as the case may be; and all references in this Agreement to amendments or supplements to the Preliminary Offering Memorandum, the Time of Sale Disclosure Package or Offering Memorandum shall be deemed to include the subsequent filing of any document under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and which is deemed to be incorporated therein by reference therein or otherwise deemed by the Rules and Regulations to be a part thereof.

 

2.           Representations and Warranties of the Company and the Initial Purchaser.

 

(a)             Representations and Warranties of the Company.  The Company represents and warrants to, and agrees with, the Initial Purchaser as follows:

 

(i)           Accurate Disclosure.  The Preliminary Offering Memorandum, as of its date, did not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.  As of the Time of Sale (as defined below), neither (A) the Time of Sale Disclosure Package nor (B) any Issuer Written Communication (as defined below), when considered together with the Time of Sale Disclosure Package, included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Neither the Offering Memorandum nor any supplement thereto, as of its issue date, or at the Closing Date (as defined below), included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  The representations and warranties in this Section 2(a)(i) shall not apply to statements in or omissions from any Preliminary Offering Memorandum, the Time of Sale Disclosure Package, any Issuer Written Communication or the Offering Memorandum (or any supplement thereto) made in reliance upon, and in conformity with, written information furnished to the Company by you, specifically for use in the

 

  

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preparation of such document, it being understood and agreed that the only such information furnished by the Initial Purchaser consists of the information described as such in Section 6(e).

 

Each reference to “Issuer Written Communication” herein means any “written communication” (as defined in Rule 405 of the Securities Act) by the Company or its agents and representatives (other than the Initial Purchaser in its capacity as such) that constitutes an offer to sell or solicitation of an offer to buy the Securities other than (i) the Preliminary Offering Memorandum and (ii) the Offering Memorandum.

 

“Time of Sale Disclosure Package” means the Preliminary Offering Memorandum, as amended and supplemented by the documents listed on Schedule II hereto, including a term sheet substantially in the form of Schedule III hereto, all considered together.

 

“Time of Sale” means 8:00 pm (Eastern time) on the date of this Agreement.

 

(ii)           Issuer Written Communication. Each Issuer Written Communication does not include any information that conflicts with the information contained in the Preliminary Offering Memorandum, the Time of Sale Disclosure Package or the Offering Memorandum.  The foregoing sentence does not apply to statements in or omissions from any Issuer Written Communication based upon and in conformity with written information furnished to the Company by you or by any Initial Purchaser through you specifically for use therein; it being understood and agreed that the only such information furnished by any Initial Purchaser consists of the information described as such in Section 6(e).

 

(iii)           No Other Offering Materials.  The Company has not distributed and will not distribute any Issuer Written Communication other than the written communications set forth on Schedule II hereto, including a term sheet substantially in the form of Schedule III hereto and any other written communications distributed in accordance with the provisions of Section 4(t) of this Agreement.

 

(iv)           Financial Statements.  The consolidated financial statements of the Company, together with the related notes, set forth or incorporated by reference in the Time of Sale Disclosure Package and the Offering Memorandum comply in all material respects with the requirements of the Securities Act and the Exchange Act and fairly present the financial condition of the Company and its consolidated subsidiaries as of the dates indicated and the results of operations and changes in cash flows for the periods therein specified in conformity with generally accepted accounting principles in the United States consistently applied throughout the periods involved; the supporting schedules set forth or incorporated by reference in the Time of Sale Disclosure Package and the Offering Memorandum present fairly the information required to be stated therein; all non-GAAP financial information set forth or incorporated by reference in the Time of Sale Disclosure Package and the Offering Memorandum complies with the requirements of Regulation G and Item 10 of Regulation S-K under the Act; and, except as disclosed in the Time of Sale Disclosure Package and the Offering Memorandum, there are no material off-balance sheet arrangements (as defined in Regulation S-K under

 

  

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the Act, Item 303(a)(4)(ii)) or any other relationships with unconsolidated entities or other persons, that may have a material current or, to the Company’s knowledge, material future effect on the Company’s financial condition, results of operations, liquidity, capital expenditures, capital resources or significant components of revenue or expenses.  Other than the financial statements, related notes and schedules that are set forth or incorporated by reference in the Time of Sale Disclosure Package and the Offering Memorandum, no other financial statements or schedules would be required to be included in the Time of Sale Disclosure Package or the Offering Memorandum if each of the Time of Sale Disclosure Package and the Offering Memorandum was a prospectus in a registration statement on Form S-3 under the Securities Act.  To the Company’s knowledge, EisnerAmper LLP, which has expressed its opinion with respect to the financial statements and schedules set forth or incorporated by reference in the Time of Sale Disclosure Package and the Offering Memorandum, is (x) an independent public accounting firm within the meaning of the Act and the Rules and Regulations, (y) a registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”)) and (z) not in violation of the auditor independence requirements of the Sarbanes-Oxley Act.

 

(v)           Organization and Good Standing.  Each of the Company and its subsidiaries has been duly organized and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation. Each of the Company and its subsidiaries has full corporate power and authority to own its properties and conduct its business as currently being carried on and as described in the Time of Sale Disclosure Package and the Offering Memorandum, and is duly qualified to do business as a foreign corporation in good standing in each jurisdiction in which it owns or leases real property or in which the conduct of its business makes such qualification necessary and in which the failure to so qualify would have a material adverse effect upon the business, prospects, management, properties, operations, condition (financial or otherwise) or results of operations of the Company and its subsidiaries, taken as a whole, or on the performance by the Company of its obligations under the Transaction Documents (“Material Adverse Effect”).

 

(vi)           Absence of Certain Events.  Except as contemplated in the Time of Sale Disclosure Package and in the Offering Memorandum, subsequent to the respective dates as of which information is given in the Time of Sale Disclosure Package and the Offering Memorandum, neither the Company nor any of its subsidiaries has incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions, or declared or paid any dividends or made any distribution of any kind with respect to its capital stock; and there has not been any change in the capital stock (other than a change in the number of outstanding shares of Common Stock due to the issuance of shares upon the exercise of outstanding options or warrants or conversion of convertible securities), or any material change in the short-term or long-term debt (other than as a result of the conversion of convertible securities), or any issuance of options, warrants, convertible securities or other rights to purchase the capital stock, of the Company or any of its subsidiaries, or any material adverse change in the general affairs, condition (financial or otherwise), business, prospects, management, properties, operations or results of operations of the Company and its subsidiaries, taken as a whole

 

  

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(“Material Adverse Change”) or any development which could reasonably be expected to result in any Material Adverse Change.

 

(vii)           Absence of Proceedings.  Except as set forth in the Time of Sale Disclosure Package and in the Offering Memorandum, there is not pending or, to the knowledge of the Company, threatened or contemplated, any action, suit or proceeding (a) to which the Company or any of its subsidiaries is a party or (b) which has as the subject thereof any officer or director of the Company or any subsidiary, any employee benefit plan sponsored by the Company or any subsidiary or any property or assets owned or leased by the Company or any subsidiary before or by any court or Governmental Authority (as defined below), or any arbitrator, which, individually or in the aggregate, might result in any Material Adverse Change, or would materially and adversely affect the ability of the Company to perform its obligations under this Agreement or which are otherwise material in the context of the sale of the Securities.  There are no current or, to the knowledge of the Company, pending, legal, governmental or regulatory actions, suits or proceedings (x) to which the Company or any of its subsidiaries is subject or (y) which has as the subject thereof any officer or director of the Company or any subsidiary, any employee plan sponsored by the Company or any subsidiary or any property or assets owned or leased by the Company or any subsidiary, that would be required to be described in a prospectus in a registration statement on Form S-3 under the Securities Act that have not been so described in the Time of Sale Disclosure Package or the Offering Memorandum.

 

(viii)           Disclosure of Legal Matters. There are no statutes, regulations, contracts or documents that would be required to be described in a prospectus in a registration statement on Form S-3 under the Securities Act that have not been so described in the Time of Sale Disclosure Package or the Offering Memorandum.

 

(ix)           Authorization and Enforceability of Purchase Agreement. This Agreement has been duly authorized, executed and delivered by the Company, and constitutes a valid, legal and binding obligation of the Company, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the rights of creditors generally and subject to general principles of equity (the “Enforceability Exceptions”) and except as rights to indemnity hereunder may be limited by federal or state securities laws.

 

(x)           Authorization and Enforceability of Indenture; Trust Indenture Act.  The Indenture has been duly authorized by the Company and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions; and on the Closing Date, the Indenture will conform in all material respects to the requirements of the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the rules and regulations of the Commission applicable to an indenture that is qualified thereunder.

 

(xi)           Authorization and Enforceability of the Securities.  The Securities have been duly authorized by the Company and, when duly executed, authenticated,

 

  

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issued and delivered as provided in the Indenture and paid for as provided herein, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.

 

(xii)           The Underlying Securities.  Upon issuance and delivery of the Securities in accordance with this Agreement and the Indenture, the Securities will be convertible at the option of the holder thereof into shares of the Underlying Securities in accordance the terms of the Securities and the Indenture; the Underlying Securities reserved for issuance upon conversion of the Securities have been duly authorized and reserved and, when issued upon conversion of the Securities in accordance with the terms of the Securities and the Indenture, will be validly issued, fully paid and nonassessable, and the issuance of the Underlying Securities will not be subject to any preemptive or similar rights.

 

(xiii)           Prepaid Forward Confirmation. The Prepaid Forward Confirmation will have been duly authorized, and the Prepaid Forward Confirmation has been or will have been, as the case may be, executed and delivered by the Company and, assuming due execution and delivery thereof by the Counterparty, constitutes, or will constitute, as the case may be, a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions.

 

(xiv)           Descriptions of the Transaction Documents.  Each Transaction Document conforms or will conform on the Closing Date in all material respects to the descriptions thereof contained in the Time of Sale Disclosure Package and the Offering Memorandum.

 

(xv)           No Conflicts; Authority.  The execution, delivery and performance of the Transaction Documents, the issuance and sale of the Securities (including the issuance of the Underlying Securities upon conversion thereof) and the consummation of the transactions contemplated by the Transaction Documents will not (A) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (B) result in any violation of the provisions of the Company’s charter or by-laws or (C) result in the violation of any law or statute or any judgment, order, rule, regulation or decree of any court or arbitrator or federal, state, local or foreign governmental agency or regulatory authority having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets (each, a “Governmental Authority”), except in the case of clause (A) as would not result in a Material Adverse Effect.  No consent, approval, authorization or order of, or registration or filing with any Governmental Authority is required for the execution, delivery and performance of the

 

  

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Transaction Documents, the issuance and sale of the Securities (including the issuance of the Underlying Securities upon conversion thereof) or for the consummation of the transactions contemplated by the Transaction Documents, except such as may be required under state securities or blue sky laws; and the Company has full power and authority to enter into the Transaction Documents and to perform its obligations thereunder.

 

(xvi)           Capitalization; the Securities; Registration Rights.  All of the issued and outstanding shares of capital stock of the Company, including the outstanding shares of Common Stock, are duly authorized and validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state and foreign securities laws, were not issued in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities that have not been waived in writing (a copy of which has been delivered to counsel to the Representative), and the holders thereof are not subject to personal liability by reason of being such holders; and the capital stock of the Company, including the Common Stock, conforms to the description thereof in the Time of Sale Disclosure Package and in the Offering Memorandum.  Except as otherwise stated in the Time of Sale Disclosure Package and in the Offering Memorandum, (A) there are no preemptive rights or other rights to subscribe for or to purchase, or any restriction upon the voting or transfer of, any shares of Common Stock pursuant to the Company’s charter, by-laws or any agreement or other instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound; (B)  the offering or sale of the Securities as contemplated by this Agreement does not and will not give rise to any rights for or relating to the registration of any shares of Common Stock or other securities of the Company (collectively “Registration Rights”) and (C) any person to whom the Company has granted Registration Rights has agreed not to exercise such rights until after expiration of the Lock-Up Period (as defined below).  All of the issued and outstanding shares of capital stock of each of the Company’s subsidiaries have been duly and validly authorized and issued and are fully paid and nonassessable, and, except as otherwise described in the Time of Sale Disclosure Package and in the Offering Memorandum, the Company owns of record and beneficially, free and clear of any security interests, claims, liens, proxies, equities or other encumbrances, all of the issued and outstanding shares of such stock.  The Company has an authorized and outstanding capitalization as set forth in the Time of Sale Disclosure Package and in the Offering Memorandum under the caption “Capitalization.”

 

(xvii)           Stock Options.  Except as described in the Time of Sale Disclosure Package and in the Offering Memorandum, there are no options, warrants, agreements, contracts or other rights in existence to purchase or acquire from the Company or any subsidiary of the Company any shares of the capital stock of the Company or any subsidiary of the Company.  The description of the Company’s stock option, stock bonus and other stock plans or arrangements (the “Company Stock Plans”), and the options (the “Options”) or other rights granted thereunder, set forth in the Time of Sale Disclosure Package and the Offering Memorandum accurately and fairly presents the information required to be shown with respect to such plans, arrangements, options and rights.  Each grant of an Option (A) was duly authorized no later than the date on which the grant of such Option was by its terms to be effective by all necessary corporate

 

  

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action, including, as applicable, approval by the board of directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto and (B) was made in accordance with the terms of the applicable Company Stock Plan, and all applicable laws and regulatory rules or requirements, including all applicable federal securities laws.

 

(xviii)           Compliance with Laws.  The Company and each of its subsidiaries holds, and is operating in compliance in all material respects with, all franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders of any Governmental Authority or self-regulatory body required for the conduct of its business and all such franchises, grants, authorizations, licenses, permits, easements, consents, certifications and orders are valid and in full force and effect; and neither the Company nor any of its subsidiaries has received notice of any revocation or modification of any such franchise, grant, authorization, license, permit, easement, consent, certification or order or has reason to believe that any such franchise, grant, authorization, license, permit, easement, consent, certification or order will not be renewed in the ordinary course; and the Company and each of its subsidiaries is in compliance in all material respects with all applicable federal, state, local and foreign laws, regulations, orders and decrees.

 

(xix)           Ownership of Assets.  The Company and its subsidiaries have good and marketable title to all property (whether real or personal) described in the Time of Sale Disclosure Package and in the Offering Memorandum as being owned by them, in each case free and clear of all liens, claims, security interests, other encumbrances or defects except such as are described in the Time of Sale Disclosure Package and in the Offering Memorandum.  The property held under lease by the Company and its subsidiaries is held by them under valid, subsisting and enforceable leases with only such exceptions with respect to any particular lease as do not interfere in any material respect with the conduct of the business of the Company or its subsidiaries.

 

(xx)           Intellectual Property.  The Company and each of its subsidiaries owns, possesses, or can acquire on reasonable terms, all Intellectual Property necessary for the conduct of the Company’s and it subsidiaries’ business as now conducted or as described in the Time of Sale Disclosure Package and the Offering Memorandum to be conducted, except as such failure to own, possess, or acquire such rights would not result in a Material Adverse Effect.  Furthermore, (A) to the knowledge of the Company, there is no infringement, misappropriation or violation  by third parties of any such Intellectual Property, except as such infringement, misappropriation or violation would not result in a Material Adverse Effect; (B) there is no pending or, to the knowledge of the Company, threatened, action, suit, proceeding or claim by others challenging the Company’s or any of its subsidiaries’ rights in or to any such Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such claim; (C) the Intellectual Property owned by the Company and its subsidiaries, and to the knowledge of the Company, the Intellectual Property licensed to the Company and its subsidiaries, has not been adjudged invalid or unenforceable, in whole or in part, and there is no pending

 

  

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or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such claim; (D) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others that the Company or any of its subsidiaries infringes, misappropriates or otherwise violates any Intellectual Property or other proprietary rights of others, neither the Company or any of its subsidiaries has received any written notice of such claim and the Company is unaware of any other fact which would form a reasonable basis for any such claim; and (E) to the Company’s knowledge, no employee of the Company or any of its subsidiaries is in or has ever been in violation of any term of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s employment with the Company nor any of its subsidiaries or actions undertaken by the employee while employed with the Company or any of its subsidiaries, except as such violation would not result in a Material Adverse Effect.  Except as described in the Preliminary Offering Memorandum, Time of Sale Disclosure Package and Offering Memorandum, the Intellectual Property purported to be owned by the Company, is owned free and clear from any material liens, encumbrances, or other third party rights, and the Company has the sole and exclusive rights to use and exploit such Company owned Intellectual Property.  The Company has taken reasonable steps necessary to secure and protect its ownership interests in the Intellectual Property purported to be owned by the Company.  “Intellectual Property” shall mean all patents, patent applications, trade and service marks, trade and service  mark registrations, trade names, copyrights, licenses, inventions, trade secrets, domain names, technology, know-how, moral rights, image and likeness rights and rights to publicity, and other intellectual property.

 

(xxi)           No Violations or Defaults.  Neither the Company nor any of its subsidiaries is in violation of its respective charter, by-laws or other organizational documents, or in breach of or otherwise in default, and no event has occurred which, with notice or lapse of time or both, would constitute such a default in the performance of any material obligation, agreement or condition contained in any bond, debenture, note, indenture, loan agreement or any other material contract, lease or other instrument to which it is subject or by which any of them may be bound, or to which any of the material property or assets of the Company or any of its subsidiaries is subject.

 

(xxii)           Taxes.  The Company and its subsidiaries have timely filed all federal, state, local and foreign income and franchise tax returns required to be filed and are not in default in the payment of any taxes which were payable pursuant to said returns or any assessments with respect thereto, other than any which the Company or any of its subsidiaries is contesting in good faith.  There is no pending dispute with any taxing authority relating to any of such returns, and the Company has no knowledge of any proposed liability for any tax to be imposed upon the properties or assets of the Company for which there is not an adequate reserve reflected in the Company’s financial statements included in the Time of Sale Disclosure Package and the Offering Memorandum.

 

  

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(xxiii)           Exchange Listing and Exchange Act Registration.  The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is included or approved for listing on the  NASDAQ Global Market (“Nasdaq”) and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from Nasdaq nor has the Company received any notification that the Commission or Nasdaq is contemplating terminating such registration or listing. The Company has complied in all material respects with the applicable requirements of Nasdaq for maintenance of inclusion  of the Common Stock thereon. Except as previously disclosed to counsel for the Initial Purchaser or as set forth in the Time of Sale Disclosure Package and the Offering Memorandum, to the knowledge of the Company, no beneficial owners of the Company’s capital stock or subordinated debt who, together with their associated persons and affiliates, hold in the aggregate 10% or more of such capital stock or subordinated debt, have any direct or indirect association or affiliate with a FINRA member.

 

(xxiv)           Ownership of Other Entities.  Other than the subsidiaries of the Company listed in Schedule IV, the Company, directly or indirectly, owns no capital stock or other equity or ownership or proprietary interest in any corporation, partnership, association, trust or other entity.

 

(xxv)           Internal Controls.  The Company and its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles in the United States and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  Except as disclosed in the Time of Sale Disclosure Package and in the Offering Memorandum, the Company’s internal control over financial reporting is effective and none of the Company, its board of directors and audit committee is aware of any “significant deficiencies” or “material weaknesses” (each as defined by the Public Company Accounting Oversight Board) in its internal control over financial reporting, or any fraud, whether or not material, that involves management or other employees of the Company and its subsidiaries who have a significant role in the Company’s internal controls; and since the end of the latest audited fiscal year, there has been no change in the Company’s internal control over financial reporting (whether or not remediated) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.  The Company’s board of directors has, subject to the exceptions, cure periods and the phase in periods specified in the applicable stock exchange rules (“Exchange Rules”), validly appointed an audit committee to oversee internal accounting controls whose composition satisfies the applicable requirements of the Exchange Rules and the Company’s board of directors and/or the audit committee has adopted a charter that satisfies the requirements of the Exchange Rules.

 

  

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(xxvi)            No Brokers or Finders.  Other than as contemplated by this Agreement, the Company has not incurred any liability for any finder’s or broker’s fee or agent’s commission in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby.

 

(xxvii)   Insurance.  The Company and each of its subsidiaries carries, or is covered by, insurance from reputable insurers in such amounts and covering such risks as is adequate for the conduct of its business and the value of its properties and the properties of its subsidiaries and as is customary for companies engaged in similar businesses in similar industries; all policies of insurance and any fidelity or surety bonds insuring the Company or any of its subsidiaries or its business, assets, employees, officers and directors are in full force and effect; the Company and its subsidiaries are in compliance with the terms of such policies and instruments in all material respects; there are no claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; neither the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for; and  neither the Company nor any of its subsidiaries has reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

(xxviii)   Investment Company Act.  The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds therefrom and the transactions contemplated by the Prepaid Forward Confirmation, will not be an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended.

 

(xxix)      Incorporated Documents.  The documents incorporated by reference in the Time of Sale Disclosure Package and in the Offering Memorandum, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and were filed on a timely basis with the Commission and none of such documents contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; any further documents so filed and incorporated by reference in the Time of Sale Disclosure Package or in the Offering Memorandum, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(xxx)               Sarbanes-Oxley Act.  The Company is in compliance with all applicable provisions of the Sarbanes-Oxley Act and the rules and regulations of the Commission thereunder.

 

  

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(xxxi)   Disclosure Controls.  The Company has established and maintains disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14 under the Exchange Act) and such controls and procedures are effective in ensuring that material information relating to the Company, including its subsidiaries, is made known to the principal executive officer and the principal financial officer.  The Company has utilized such controls and procedures in preparing and evaluating the disclosures in the Time of Sale Disclosure Package and in the Offering Memorandum.

 

(xxxii)   Anti-Bribery and Anti-Money Laundering Laws.  Each of the Company, its subsidiaries, its affiliates and any of their respective officers, directors, supervisors, managers, agents, or employees, has not violated, its participation in the offering will not violate, and the Company and each of its subsidiaries has instituted and maintains policies and procedures designed to ensure continued compliance with, each of the following laws:  anti-bribery laws, including but not limited to, any applicable law, rule, or regulation of any locality, including but not limited to any law, rule, or regulation promulgated to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed December 17, 1997, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.K. Bribery Act 2010, or any other law, rule or regulation of similar purposes and scope, or anti-money laundering laws, including but not limited to, applicable federal, state, international, foreign or other laws, regulations or government guidance regarding anti-money laundering, including, without limitation, Title 18 US. Code section 1956 and 1957, the Patriot Act, the Bank Secrecy Act, and international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation the United States representative to the group or organization continues to concur, all as amended, and any Executive order, directive, or regulation pursuant to the authority of any of the foregoing, or any orders or licenses issued thereunder.

 

(xxxiii)          OFAC.

 

(A)           Neither the Company nor any of its subsidiaries, nor any of their directors, officers or employees, nor, to the Company’s knowledge, any agent, affiliate or representative of the Company or its subsidiaries, is an individual or entity that is, or is owned or controlled by an individual or entity that is:

 

(1)           the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor

 

(2)           located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, Libya, North Korea, Sudan and Syria).

 

  

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(B)           Neither the Company nor any of its subsidiaries will, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other individual or entity:

 

(1)           to fund or facilitate any activities or business of or with any individual or entity or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or

 

(2)           in any other manner that will result in a violation of Sanctions by any individual or entity (including any individual or entity participating in the offering, whether as initial purchaser, advisor, investor or otherwise).

 

(C)           For the past five years, neither the Company nor any of its subsidiaries has knowingly engaged in, and is not now knowingly engaged in, any dealings or transactions with any individual or entity, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.

 

(xxxiv)          Compliance with Environmental Laws.  Except as disclosed in the Time of Disclosure Package and the Offering Memorandum, neither the Company nor any of its subsidiaries is in violation of any statute, any rule, regulation, decision or order of any Governmental Authority or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), owns or operates any real property contaminated with any substance that is subject to any environmental laws, is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or is subject to any claim relating to any Environmental Laws, which violation, contamination,  liability or claim would individually or in the aggregate, have a Material Adverse Effect; and the Company is not aware of any pending investigation which might lead to such a claim.  Neither the Company nor any of its subsidiaries anticipates incurring any material capital expenditures relating to compliance with Environmental Laws.

 

(xxxv)           Compliance with Occupational Laws.  The Company and each of its subsidiaries (A) is in compliance, in all material respects, with any and all applicable foreign, federal, state and local laws, rules, regulations, treaties, statutes and codes promulgated by any and all Governmental Authorities (including pursuant to the Occupational Health and Safety Act) relating to the protection of human health and safety in the workplace (“Occupational Laws”); (B) has received all material permits, licenses or other approvals required of it under applicable Occupational Laws to conduct its business as currently conducted; and (C) is in compliance, in all material respects, with all terms and conditions of such permit, license or approval.  No action, proceeding, revocation proceeding, writ, injunction or claim is pending or, to the Company’s knowledge, threatened against the Company or any of its subsidiaries relating to Occupational Laws, and the Company does not have knowledge of any facts,

 

  

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circumstances or developments relating to its operations or cost accounting practices that could reasonably be expected to form the basis for or give rise to such actions, suits, investigations or proceedings.

 

(xxxvi)          ERISA and Employee Benefits Matters. (A) To the knowledge of the Company, no “prohibited transaction” as defined under Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), and not exempt under ERISA Section 408 and the regulations and published interpretations thereunder has occurred with respect to any Employee Benefit Plan.  At no time has the Company or any ERISA Affiliate maintained, sponsored, participated in, contributed to or has or had any liability or obligation in respect of any Employee Benefit Plan subject to Part 3 of Subtitle B of Title I of ERISA, Title IV of ERISA, or Section 412 of the Code or any “multiemployer plan” as defined in Section 3(37) of ERISA or any multiple employer plan for which the Company or any ERISA Affiliate has incurred or could incur liability under Section 4063 or 4064 of ERISA.  No Employee Benefit Plan provides or promises, or at any time provided or promised, retiree health, life insurance, or other retiree welfare benefits except as may be required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or similar state law.  Each Employee Benefit Plan is and has been operated in material compliance with its terms and all applicable laws, including but not limited to ERISA and the Code and, to the knowledge of the Company, no event has occurred (including a “reportable event” as such term is defined in Section 4043 of ERISA) and no condition exists that would subject the Company or any ERISA Affiliate to any material tax, fine, lien, penalty or liability imposed by ERISA, the Code or other applicable law.  Each Employee Benefit Plan intended to be qualified under Code Section 401(a) is so qualified and has a favorable determination or opinion letter from the IRS upon which it can rely, and any such determination or opinion letter remains in effect and has not been revoked; to the knowledge of the Company, nothing has occurred since the date of any such determination or opinion letter that is reasonably likely to adversely affect such qualification; (B) with respect to each Foreign Benefit Plan, such Foreign Benefit Plan (1) if intended to qualify for special tax treatment, meets, in all material respects, the requirements for such treatment, and (2) if required to be funded, is funded to the extent required by applicable law, and with respect to all other Foreign Benefit Plans, adequate reserves therefor have been established on the accounting statements of the applicable Company or subsidiary; (C) the Company does not have any obligations under any collective bargaining agreement with any union and no organization efforts are underway with respect to Company employees.  As used in this Agreement, “Code” means the Internal Revenue Code of 1986, as amended; “Employee Benefit Plan” means any “employee benefit plan” within the meaning of Section 3(3) of ERISA, including, without limitation, all stock purchase, stock option, stock-based severance, employment, change-in-control, medical, disability, fringe benefit, bonus, incentive, deferred compensation, employee loan and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA, under which (1) any current or former employee, director or independent contractor of the Company or its subsidiaries has any present or future right to benefits and which are contributed to, sponsored by or maintained by the Company or any of its respective subsidiaries or (2) the Company or any of its subsidiaries has had or has any present or future obligation

 

  

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or liability; “ERISA” means the Employee Retirement Income Security Act of 1974, as amended; “ERISA Affiliate” means any member of the company’s controlled group as defined in Code Section 414(b), (c), (m) or (o); and “Foreign Benefit Plan” means any Employee Benefit Plan established, maintained or contributed to outside of the United States of America or which covers any employee working or residing outside of the United States.

 

(xxxvii)         Business Arrangements.  Except as disclosed in the Time of Sale Disclosure Package and the Offering Memorandum, neither the Company nor any of its subsidiaries has granted rights to develop, manufacture, produce, assemble, distribute, license, market or sell its products to any other person and is not bound by any agreement that affects the exclusive right of the Company or such subsidiary to develop, manufacture, produce, assemble, distribute, license, market or sell its products.

 

(xxxviii)        Labor Matters.  No labor problem or dispute with the employees of the Company or any of its subsidiaries exists or is threatened or imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or its subsidiaries’ principal suppliers, contractors or customers, that could have a Material Adverse Effect.

 

(xxxix)           Restrictions on Subsidiary Payments to the Company.  No subsidiary of the Company is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s property or assets to the Company or any other subsidiary of the Company, except as described in or contemplated by the Time of Sale Disclosure Package and the Offering Memorandum.

 

(xl)    Statistical Information.  Any third-party statistical and market-related data included in the Time of Sale Disclosure Package and the Offering Memorandum are based on or derived from sources that the Company believes to be reliable and accurate in all material respects.

 

(xli)              Forward-looking Statements.  No forward-looking statement (within the meaning of Section 27A of the Act and Section 21E of the Exchange Act) contained in the Pricing Disclosure Package or the Offering Memorandum has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

 

(xlii)            Rule 144A Eligibility.  On the Closing Date, the Securities will not be of the same class as securities listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in an automated inter-dealer quotation system; and each of the Time of Sale Disclosure Package, as of the Time of Sale, and the Offering Memorandum, as of its date, contains or will contain all the information that, if requested by a prospective purchaser of the Securities, would be required to be provided to such prospective purchaser pursuant to Section (d)(4) of Rule 144A under the Securities Act (“Rule 144A”).

 

  

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(xliii)           No Integration.   Neither the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation D under the Securities Act (“Regulation D”)) has, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act.

 

(xliv)           No General Solicitation. None of the Company or any of its affiliates or any other person acting on its or their behalf (other than the Initial Purchaser, as to which no representation is made) has solicited offers for, or offered or sold, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act.

 

(xlv)           Securities Law Exemptions.  Assuming the accuracy of the representations and warranties of the Initial Purchaser contained in Section 2(b) and their compliance with their agreements set forth therein, it is not necessary, in connection with the issuance and sale of the Securities to the Initial Purchaser and the offer, resale and delivery of the Securities by the Initial Purchaser in the manner contemplated by this Agreement, the Time of Sale Disclosure Package and the Offering Memorandum, to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act.

 

(b)             Representations and Warranties of the Initial Purchaser.  The Initial Purchaser represents and warrants to, and agrees with, the Company as follows:

 

(i)           Accredited Investor Status.  The Initial Purchaser is an accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D;

 

(ii)           Initial Resales.  The Initial Purchaser has not sold, and will not sell, the Securities as part of its initial distribution except to persons whom it reasonably believes to be “qualified institutional buyers” within the meaning of Rule 144A in transactions pursuant to Rule 144A; and

 

(iii)           Reliance.  The Initial Purchaser acknowledges and agrees that the Company and, for purposes of the opinions to be delivered to the Initial Purchaser pursuant to Sections 5(e) and 5(f), counsel for the Company and counsel for the Initial Purchaser, respectively, may rely upon the accuracy of the representations and warranties of the Initial Purchaser, and compliance by the Initial Purchaser with their agreements, contained in subparagraphs (b)(i) and (ii) above, and the Initial Purchaser hereby consents to such reliance.

 

(c)             Effect of Certificates.  Any certificate signed by any officer of the Company and delivered to you or to counsel for the Initial Purchaser shall be deemed a representation and warranty by the Company to the Initial Purchaser as to the matters covered thereby.

 

  

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3.           Purchase, Sale and Delivery of Securities.

 

(a)             Securities.  On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to issue and sell the Securities to the Initial Purchaser, and the Initial Purchaser agrees to purchase from the Company the principal amount of Securities set forth opposite its name in Schedule I hereto at a price equal to 95.5% of the principal amount thereof (the “Purchase Price”) plus accrued interest, if any, from April 29, 2015 to the Closing Date.  In making this Agreement, the Initial Purchaser is contracting to purchase only the respective principal amount of  Securities set forth opposite its name in Schedule I hereto.

 

Payment for the Securities shall be made by wire transfer in immediately available funds to the account specified by the Company at the offices of Goodwin Procter LLP, 53 State Street, Boston, MA 02109 at 10:00 A.M. New York City time on April 29, 2015, or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representative and the Company may agree upon in writing.  The time and date of such payment for the Securities is referred to herein as the “Closing Date.”

 

Payment for the Securities to be purchased on the Closing Date shall be made against delivery to the nominee of The Depository Trust Company (“DTC”), for the account of the Initial Purchaser of the Securities of one or more global notes representing the Securities (collectively, the “Global Note”), with any transfer taxes payable in connection with the sale of such Securities duly paid by the Company.  Notwithstanding the foregoing, upon request to the Company, the Initial Purchaser may deliver a portion of the net proceeds to the Counterparty to pay for the forward stock purchase transaction pursuant to the Prepaid Forward Confirmation on the Company’s behalf, upon the consent of the Company, such consent not to be unreasonably withheld.  The Global Note will be made available for inspection by the Representative at the office of Piper Jaffray & Co., U.S. Bancorp Center, 800 Nicollet Mall, Minneapolis, Minnesota, or such other location as may be mutually acceptable, not later than 1:00 P.M., New York City time, on the business day prior to the Closing Date.

 

(b)             Reserved.

 

4.           Covenants.  The Company covenants and agrees with the Initial Purchaser as follows:

 

(a)             Amendments and Supplements; Additional Written Communications.  At any time prior to the completion of the initial distribution of the Securities, prior to amending or supplementing the Time of Sale Disclosure Package or the Offering Memorandum, the Company shall furnish to the Representative for review a copy of each such proposed amendment or supplement, and the Company shall not file or distribute any such proposed amendment or supplement to which the Representative or counsel to the Initial Purchaser reasonably object.  Subject to this Section 4(a), immediately following execution of this Agreement, the Company

 

  

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will prepare the Offering Memorandum containing the selling terms of the Securities, the plan of distribution thereof and such other information as the Representative and the Company may deem appropriate, the term sheet substantially in the form of Schedule III hereto, and such other information as the Company and the Representative may deem appropriate.

 

(b)             Notification of Certain Regulatory Actions.  After the date of this Agreement, the Company shall promptly advise the Representative in writing (A) of the time and date of any amendment or supplement to the Preliminary Offering Memorandum, the Time of Sale Disclosure Package or the Offering Memorandum, (B) of the issuance by any governmental or regulatory authority of any order preventing or suspending the use of any of the Time of Sale Disclosure Package, any Issuer Written Communication or the Offering Memorandum or the initiation or threatening of any proceeding for that purpose, (C) of the receipt by the Company of any notice with respect to any suspension of the qualification of the Securities for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose or (D) of any proceedings to remove, suspend or terminate from listing or quotation the Common Stock from any securities exchange upon which it is listed for trading or included or designated for quotation, or of the threatening or initiation of any proceedings for any of such purposes.  If any governmental or regulatory authority shall enter any order preventing or suspending the use of any of the Time of Sale Disclosure Package, any Issuer Written Communication or the Offering Memorandum or suspending any qualification of the Securities for offer and sale, the Company will use its best efforts to obtain the lifting of such order at the earliest possible moment.

 

(c)             Continued Compliance with Securities Laws.

 

(i)            At any time prior to the completion of the initial distribution of the Securities, the Company will comply as far as it is able with all requirements imposed upon it by the Securities Act, as now and hereafter amended, and by the Rules and Regulations, as from time to time in force, and by the Exchange Act.  If during such period any event occurs as a result of which the Offering Memorandum (or if the Offering Memorandum is not yet available to prospective purchasers, the Time of Sale Disclosure Package) would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, the Company promptly will (x) notify you of such untrue statement or omission, (y)  amend or supplement the Offering Memorandum (or, if the Offering Memorandum is not yet available to prospective purchasers, the Time of Sale Disclosure Package) so as to correct such statement or omission or effect such compliance, and (z) notify you when any amendment or supplement to the Offering Memorandum or Time of Sale Disclosure Package is filed or becomes effective; and

 

  

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(ii)           If at any time following issuance of an Issuer Written Communication there occurred or occurs an event or development as a result of which such Issuer Written Communication conflicted or would conflict with the information contained in the Preliminary Offering Memorandum or the Offering Memorandum or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company (x) has promptly notified or promptly will notify the Representative of such conflict, untrue statement or omission, (y) has promptly amended or will promptly amend or supplement, at its own expense, such Issuer Written Communication to eliminate or correct such conflict, untrue statement or omission, and (z) has promptly delivered or will promptly deliver to the Initial Purchaser such amendment or supplement.

 

(d)             Blue Sky Qualifications.  The Company shall take or cause to be taken all necessary action to qualify the Securities for sale under the securities laws of such jurisdictions as you reasonably designate and to continue such qualifications in effect so long as required for the distribution of the Securities, except that the Company shall not be required in connection therewith to qualify as a foreign corporation or to execute a general consent to service of process in any state.

 

(e)             Provision of Documents.  The Company will furnish, at its own expense, to the Initial Purchaser, any dealer and counsel for the Initial Purchaser copies of the Preliminary Offering Memorandum, the Time of Sale Disclosure Package, the Offering Memorandum, any Issuer Written Communication, and all amendments and supplements to such documents, in each case as soon as available and in such quantities as you may from time to time reasonably request.

 

(f)             Payment and Reimbursement of Expenses.  The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay or cause to be paid  (A) all expenses (including transfer taxes allocated to the respective transferees) incurred in connection with the delivery to the Initial Purchaser of the Securities, (B) all expenses and fees (including, without limitation, fees and expenses of the Company’s accountants and counsel in connection with the preparation, printing, filing, delivery, and shipping of the Securities, the Indenture, each Preliminary Offering Memorandum, the Time of Sale Disclosure Package, the Offering Memorandum, any Issuer Written Communication and any amendment thereof or supplement thereto, and the printing, delivery, and shipping of this Agreement and other Offering documents, including Blue Sky Memoranda (covering the states and other applicable jurisdictions), (C) all filing fees and up to $250,000 in fees and disbursements of the Initial Purchaser’s counsel, (D) any fees charged by rating agencies for rating the Securities, (E) the fees and expenses of the Trustee and any paying agent (including related fees and expenses of any counsel to such parties), (F) listing fees, if any, of the

 

  

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Underlying Securities, (G) the cost and expenses of the Company relating to investor presentations or any “roadshow” undertaken in connection with marketing of the Securities, and (H) all other costs and expenses of the Company incident to the performance of its obligations hereunder that are not otherwise specifically provided for herein. If this Agreement is terminated by the Representative pursuant to Section 9 hereof or if the sale of the Securities provided for herein is not consummated by reason of any failure, refusal or inability on the part of the Company to perform any agreement on its to be performed, or because any other condition of the Initial Purchaser’s obligations hereunder required to be fulfilled by the Company is not fulfilled, the Company  will reimburse the Initial Purchaser for all out-of-pocket accountable disbursements (including but not limited to fees and disbursements of counsel, printing expenses, travel expenses, postage, facsimile and telephone charges) incurred by the Initial Purchaser in connection with their investigation, preparing to market and marketing the Securities or in contemplation of performing their obligations hereunder.

 

(g)             Use of Proceeds.  The Company will have and has all requisite corporate power and authority to, apply the net proceeds from the sale of the Securities to be sold by it hereunder for the purposes set forth in the Time of Sale Disclosure Package and in the Offering Memorandum (including the share repurchase described in the Time of Sale Disclosure Package and the Offering Memorandum).

 

(h)             Company Lock Up.  The Company will not, without the prior written consent of Piper Jaffray & Co., from the date of execution of this Agreement and continuing to and including the date 90 days after the date of the Offering Memorandum (the “Lock-Up Period”), (A) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or (B) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (A) or (B) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, except (1) to the Initial Purchaser pursuant to this Agreement, (2) shares of Common Stock issued to holders of the Securities in satisfaction of conversions pursuant to the Indenture, (3) pursuant to an existing equity incentive plan of the Company, (4) pursuant to the exercise of options that were previously granted or issued under an equity incentive plan of the Company, (5) the issuance of Common Stock as payment for consulting services and (6) dividends on existing preferred stock of the Company in the form of Common Stock; provided that the aggregate number of shares of Common Stock and shares of Common Stock

 

  

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underlying other securities issued pursuant to clauses (3) through (6) shall not exceed 350,000.  The Company agrees not to accelerate the vesting of any option or warrant or the lapse of any repurchase right prior to the expiration of the Lock-Up Period.

 

(i)             Stockholder Lock-Ups.  The Company has caused to be delivered to you prior to the date of this Agreement a letter, in the form of Exhibit A hereto (the “Lock-Up Agreement”), from each individual or entity listed on Schedule V.  The Company will enforce the terms of each Lock-Up Agreement and issue stop-transfer instructions to the transfer agent for the Common Stock with respect to any transaction or contemplated transaction that would constitute a breach of or default under the applicable Lock-Up Agreement.  If the Representative, in its sole discretion, agrees to release or waive the restrictions of any Lock-Up Agreement between an officer or director of the Company and the Representative and provides the Company with notice of the impending release or waiver at least three business days before the effective date of such release or waiver, the Company agrees to announce the impending release or waiver by means of a press release substantially in the form of Exhibit B hereto, issued through a major news service, at least two business days before the effective date of the release or waiver.

 

(j)             No Market Stabilization or Manipulation.  The Company has not taken and will not take, directly or indirectly, any action designed to or which might reasonably be expected to cause or result in, or which has constituted, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities, other than the share repurchases as described in the Time of Sale Disclosure Package and the Offering Memorandum.

 

(k)             Reservation of Common Stock.  The Company will reserve and keep available at all times, free of pre-emptive rights, shares of Common Stock equal to the maximum number of Underlying Securities for the purpose of enabling the Company to satisfy all obligations to issue the Underlying Securities upon conversion of the Securities The Company will use its best efforts to cause any such shares of Common Stock to be listed on Nasdaq upon issuance.

 

(l)             Supplying Information.  While the Securities remain outstanding and are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Company will, during any period in which the Company is not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, furnish to holders of the Securities, prospective purchasers of the Securities designated by such holders and securities analysts, in each case upon request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

 

  

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(m)             DTC.  The Company will assist the Initial Purchaser in arranging for the Securities to be eligible for clearance and settlement through DTC.

 

(n)             No Resales by the Company.  During the period from the Closing Date until one year after the Closing Date, the Company will not, and will not permit any of its affiliates (as defined in Rule 144 under the Securities Act)  that it controls or who are officers or directors or relatives or spouses thereof to, resell any of the Securities that have been acquired by any of them, except for Securities purchased by the Company or any of its affiliates and resold in a transaction registered under the Securities Act.

 

(o)             No Integration.  Neither the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation D) will, directly or through any agent, sell, offer for sale, solicit offers to buy or otherwise negotiate in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act.

 

(p)             No General Solicitation.  None of the Company or any of its affiliates or any other person acting on its or their behalf (other than the Initial Purchaser, as to which no covenant is given) will solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act.

 

(q)             SEC Reports.  At any time prior to the completion of the initial distribution of the Securities, the Company will file on a timely basis with the Commission such periodic and special reports as required by the Rules and Regulations.

 

(r)             Internal Controls.  The Company and its subsidiaries will maintain such controls and other procedures, including without limitation those required by Sections 302 and 906 of the Sarbanes-Oxley Act and the applicable regulations thereunder, that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and its principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure, to ensure that material information

 

  

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relating to Company, including its subsidiaries, is made known to them by others within those entities.

 

(s)             Sarbanes-Oxley.  The Company and its subsidiaries will comply with all applicable provisions of the Sarbanes-Oxley Act.

 

(t)             Additional Written Communications.  The Company represents and agrees that, unless it obtains the prior written consent of Piper Jaffray & Co., it has not made and will not make any offer to sell or solicitation of an offer to buy the Securities other than the Preliminary Offering Memorandum and the Offering Memorandum; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the written communications set forth on Schedule II hereto.

 

5.           Conditions of Initial Purchaser’s Obligations.  The obligations of the Initial Purchaser hereunder are subject to the accuracy, as of the date hereof and at the Closing Date, of and compliance with all representations, warranties and agreements of the Company contained herein, to the performance by the Company of its obligations hereunder and to the following additional conditions:

 

(a)             Absence of Certain Actions.  No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or sale of the Securities; and no injunction or order of any nature by a federal or state court of competent jurisdiction shall have been issued, as of the Closing Date, which would prevent the issuance of the Securities.

 

(b)             Continued Compliance with Securities Laws.  The Initial Purchaser shall not have advised the Company that  the Time of Sale Disclosure Package or the Offering Memorandum, or any amendment thereof or supplement thereto, or any Issuer Written Communication, contains an untrue statement of fact which, in your opinion, is material, or omits to state a fact which, in your opinion, is material and is required to be stated therein, or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading.

 

(c)             Absence of Certain Events.  Except as contemplated in the Time of Sale Disclosure Package and in the Offering Memorandum, subsequent to the respective dates as of which information is given in the Time of Sale Disclosure Package, neither the Company nor any of its subsidiaries shall have incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions, or declared or paid any dividends or made any distribution of any kind with respect to its capital stock; and there shall not have been any change in the capital stock (other than a change in the number of outstanding shares of Common Stock

 

  

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due to the issuance of shares upon the exercise of outstanding options or warrants or conversion of convertible securities), or any material change in the short-term or long-term debt of the Company (other than as a result of the conversion of convertible securities), or any issuance of options, warrants, convertible securities or other rights to purchase the capital stock of the Company or any of its subsidiaries, or any Material Adverse Change or any development involving a prospective Material Adverse Change (whether or not arising in the ordinary course of business), or any loss by strike, fire, flood, earthquake, accident or other calamity, whether or not covered by insurance, incurred by the Company or any subsidiary, the effect of which, in any such case described above, in your judgment, makes it impractical or inadvisable to offer or deliver the Securities on the terms and in the manner contemplated in the Time of Sale Disclosure Package and in the Offering Memorandum.

 

(d)             No Downgrade.  On or after the Time of Sale (i) no downgrading shall have occurred in the rating accorded any of the Company’s securities by any “nationally recognized statistical organization,” as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company’s securities;

 

(e)             Opinion of Company Counsel.  On each Closing Date, there shall have been furnished to the Representative, the opinion of Kelley Drye & Warren LLP, counsel for the Company, dated such Closing Date and addressed to you in substantially the form and substance reasonably satisfactory to the Representative.

 

(f)             Opinion of Initial Purchaser’s Counsel.  On each Closing Date, there shall have been furnished to the Representative, such opinion or opinions from Goodwin Procter LLP, counsel to you, dated such Closing Date and addressed to you, with respect to the formation of the Company, the enforceability of the Securities and the Indenture, the Time of Sale Disclosure Package, the Offering Memorandum and other related matters as you reasonably may request, and such counsel shall have received such papers and information as they request to enable them to pass upon such matters.

 

(g)             Comfort Letter.  On the date hereof and on each Closing Date the Representative shall have received an accountant’s “comfort” letter of EisnerAmper LLP, dated such date and addressed to you, in form and substance satisfactory to you.

 

(h)             Officers’ Certificate.  On each Closing Date, there shall have been furnished to the Representative a certificate, dated such

 

  

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Closing Date and addressed to the Representative, signed by the chief executive officer and by the chief financial officer of the Company, to the effect that:

 

(i)           The representations and warranties of the Company in this Agreement are true and correct as if made at and as of such Closing Date, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to such Closing Date;

 

(ii)           No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would prevent the issuance or sale of the Securities; and no injunction or order of any nature by a federal or state court of competent jurisdiction shall have been issued which would prevent the issuance of the Securities; and

 

(iii)           Affirms the accuracy of the matters set forth in subsection (c) of this Section 5.

 

(i)             Certificate of Chief Financial Officer.  The Representative shall have received on and as of the Closing Date a certificate of the chief financial officer of the Company substantially in the Form of Exhibit C hereto.

 

(j)             Lock-Up Agreement.  The Initial Purchaser shall have received all of the Lock-Up Agreements referenced in Section 4 and the Lock-Up Agreements shall remain in full force and effect.

 

(k)             Amendment and Repayment.  The Initial Purchaser shall have received (a) a copy of the receipt of a payoff letter or other evidence of termination or retirement of the term loan portion of the Company’s existing credit facility to be permanently repaid with a portion of the proceeds from the Offering as described in the Time of Sale Disclosure Package and the Final Offering Memorandum, in form and substance reasonably satisfactory to the Initial Purchaser, and (b) a copy of the amendment to the Company’s existing credit facility consistent with the terms described in the Time of Sale Disclosure Package and the Final Offering Memorandum.

 

(l)             DTC.  The Securities shall be eligible for clearance and settlement through DTC.

 

(m)             Exchange Listing. An application for the listing of the maximum number of Underlying Securities for issuance upon conversion of the Securities shall have been approved by Nasdaq, subject to official notice of issuance.

 

  

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(n)             Executed Transaction Documents. On the Closing Date, the Initial Purchaser shall have received from the Company and the Trustee a copy of the fully executed Indenture and copies of the fully executed Securities. On the Closing Date, the Initial Purchaser shall have received from the Company a copy of the fully executed Prepaid Forward Confirmation.

 

(o)             Other Documents.  The Company shall have furnished to you and counsel for the Initial Purchaser such additional documents, certificates and evidence as you or they may have reasonably requested.

 

All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof only if they are satisfactory in form and substance to you and counsel for the Initial Purchaser.  The Company will furnish you with such conformed copies of such opinions, certificates, letters and other documents as you shall reasonably request.

 

6.           Indemnification and Contribution.

 

(a)             Indemnification by the Company.  The Company agrees to indemnify and hold harmless the Initial Purchaser, its affiliates, directors and officers and each person, if any, who controls the Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and against any losses, claims, damages or liabilities, to which such Initial Purchaser may become subject, under the Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent of the Company), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, the Time of Sale Disclosure Package, the Offering Memorandum, or any amendment or supplement thereto, any Issuer Written Communication, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Initial Purchaser for any legal or other expenses reasonably incurred by it in connection with investigating or defending against such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by you, or by the Initial Purchaser through you, specifically for use in the preparation thereof; it being understood and agreed that the only information furnished by the Initial Purchaser consists of the information described as such in Section 6(e).

 

  

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(b)             Indemnification by the Initial Purchaser.  The Initial Purchaser will indemnify and hold harmless the Company, its affiliates, directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the Act and Section 20 of the Exchange Act, from and against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Initial Purchaser), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, the Time of Sale Disclosure Package, the Offering Memorandum, or any amendment or supplement thereto, or any Issuer Written Communication, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by you, or by such Initial Purchaser through you, specifically for use in the preparation thereof (it being understood and agreed that the only information furnished by an Initial Purchaser consists of the information described as such in Section 6(e)), and will reimburse the Company for any legal or other expenses reasonably incurred by the Company  in connection with investigating or defending against any such loss, claim, damage, liability or action as such expenses are incurred.

 

(c)             Notice and Procedures.  Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve the indemnifying party from any liability that it may have to any indemnified party except to the extent such indemnifying party has been materially prejudiced by such failure (through the forfeiture of substantive rights or defenses).  In case any such action shall be brought against any indemnified party, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of the indemnifying party’s election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of

 

  

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investigation; provided, however, that if, in the sole judgment of the Representative, it is advisable for the Initial Purchaser to be represented by separate counsel, the Representative shall have the right to employ a single counsel (in addition to local counsel) to represent the Representative who may be subject to liability arising from any claim in respect of which indemnity may be sought by the Initial Purchaser under subsection (a) of this Section 6, in which event the reasonable fees and expenses of such separate counsel shall be borne by the indemnifying party or parties and reimbursed to the Initial Purchaser as incurred.  An indemnifying party shall not be obligated under any settlement agreement relating to any action under this Section 6 to which it has not agreed in writing.  In addition, no indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld or delayed, effect any settlement of any pending or threatened proceeding unless such settlement includes an unconditional release of such indemnified party for all liability on claims that are the subject matter of such proceeding and does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified party.  Notwithstanding the foregoing, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel pursuant to this Section 6(c), such indemnifying party agrees that it shall be liable for any settlement effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

 

(d)             Contribution; Limitations on Liability; Non-Exclusive Remedy.  If the indemnification provided for in this Section 6 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Initial Purchaser on the other from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Initial Purchaser on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.  The relative benefits received by the Company on the one hand and the Initial Purchaser on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total initial purchaser discounts and commissions received by

 

  

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the Initial Purchaser, in each case as provided in this Agreement.  The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Initial Purchaser and the parties’ relevant intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission.  The Company and the Initial Purchaser agree that it would not be just and equitable if contributions pursuant to this subsection (d) were to be determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the first sentence of this subsection (d).  The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending against any action or claim which is the subject of this subsection (d).  Notwithstanding the provisions of this subsection (d), the Initial Purchaser shall not be required to contribute any amount in excess of the amount by which the total initial purchaser discounts and commissions received by the Initial Purchaser with respect to the Securities purchased by it hereunder exceeds the amount of any damages that the Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The remedies provided for in this Section 6 are not exclusive and shall not limit any rights or remedies that might otherwise be available to any indemnified party at law or in equity.

 

(e)             Information Provided by the Initial Purchaser.  The Initial Purchaser confirms and the Company acknowledges that the statements with respect to the offering of the Securities by the Initial Purchaser set forth in the 11th paragraph under the caption “Plan of Distribution” in the Offering Memorandum and the 12th paragraph under the caption in the Preliminary Offering Memorandum and are correct and constitute the only information concerning such Initial Purchaser furnished in writing to the Company by or on behalf of the Initial Purchaser specifically for inclusion in the Preliminary Offering Memorandum, the Time of Sale Disclosure Package, the Offering Memorandum or any Issuer Written Communication.

 

7.           Representations and Agreements to Survive Delivery.  All representations, warranties, and agreements of the Company herein or in certificates delivered pursuant hereto, including but not limited to the agreements of the Initial Purchaser and the Company contained in Section 6 hereof, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Initial Purchaser or any controlling person thereof, or

 

  

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the Company or any of its officers, directors, or controlling persons, and shall survive delivery of, and payment for, the Securities to and by the Initial Purchaser hereunder and any termination of this Agreement.

 

8.           [Reserved.]

 

9.           Termination of this Agreement.

 

(a)             Right to Terminate.  You shall have the right to terminate this Agreement by giving notice to the Company as hereinafter specified at any time at or prior to Closing Date if (i) the Company shall have failed, refused or been unable, at or prior to such Closing Date, to perform any agreement on its part to be performed hereunder, (ii) any condition of the Initial Purchaser’s obligations hereunder is not fulfilled, (iii) trading in the Company’s Common Stock shall have been suspended by the Commission or Nasdaq or trading in securities generally on Nasdaq or the New York Stock Exchange shall have been suspended, (iv) minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required, on the NASDAQ Stock Market or New York Stock Exchange, by such Exchange or by order of the Commission or any other Governmental Authority having jurisdiction, (v) a banking moratorium shall have been declared by federal or New York state authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States, or (vi) there shall have occurred any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration by the United States of a national emergency or war, any change in financial markets, any substantial change or development involving a prospective substantial change in United States or international political, financial or economic conditions, or any other calamity or crisis that, in your judgment, is material and adverse and makes it impractical or inadvisable to proceed with the completion of the sale of and payment for the Securities.  Any such termination shall be without liability of any party to any other party except that the provisions of Section 4(f) and Section 6 hereof shall at all times be effective and shall survive such termination.

 

(b)             Notice of Termination.  If you elect to terminate this Agreement as provided in this Section, the Company shall be notified promptly by you by telephone, confirmed by letter.

 

10.           Notices.  Except as otherwise provided herein, all communications hereunder shall be in writing and, if to the Initial Purchaser, shall be mailed via overnight delivery service or hand delivered via courier to the Representative c/o Piper Jaffray & Co., U.S. Bancorp Center, 800 Nicollet Mall, Minneapolis, Minnesota 55402, Attention: Debt  Capital Markets, with a copy to General Counsel; if to the Company, shall be mailed or delivered to it at Cinedigm Corp., 902 Broadway, 9th Floor, New York, New York 10010, Attention: General Counsel, or in each case to such other address as the person to be notified may have requested in writing.  Any party to

 

  

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this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose.

 

11.           Persons Entitled to Benefit of Agreement.  This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns and the controlling persons, officers and directors referred to in Section 6.  Nothing in this Agreement is intended or shall be construed to give to any other person, firm or corporation any legal or equitable remedy or claim under or in respect of this Agreement or any provision herein contained.  The term “successors and assigns” as herein used shall not include any purchaser, as such purchaser, of any of the Securities from the Initial Purchaser.

 

12.           Absence of Fiduciary Relationship.  The Company acknowledges and agrees that: (a) the Representative has been retained solely to act as Initial Purchaser in connection with the sale of the Securities and that no fiduciary, advisory or agency relationship between the Company and the Representative has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Representative has advised or is advising the Company on other matters; (b) the price and other terms of the Securities set forth in this Agreement were established by the Company following discussions and arms-length negotiations with the Representative and the Company is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (c) it has been advised that the Representative and its affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and that the Representative has no obligation to disclose such interest and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; (d) it has been advised that the Representative is acting, in respect of the transactions contemplated by this Agreement, solely for the benefit of the Representative as the sole representative of the Initial Purchaser, and not on behalf of the Company; (e) it waives to the fullest extent permitted by law, any claims it may have against the Representative for breach of fiduciary duty or alleged breach of fiduciary duty in respect of any of the transactions contemplated by this Agreement and agrees that the Representative shall have no liability (whether direct or indirect) to the Company in respect of such a fiduciary duty claim on behalf of or in right of the Company, including stockholders, employees or creditors of the Company.

 

13.           Governing Law; Waiver of Jury Trial.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York.  The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates), the Initial Purchaser hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

 

14.           Counterparts.  This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original and all such counterparts shall together constitute one and the same instrument.

 

15.           General Provisions.  This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof.  This

 

  

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Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit.  The Section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.  The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof.  If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

 

[Signature Page Follows]

 

  

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Please sign and return to the Company the enclosed duplicates of this letter whereupon this letter will become a binding agreement between the Company and the Initial Purchaser in accordance with its terms.

 

 

Very truly yours,

 

Cinedigm Corp.

 

 

By   /s/ Gary S. Loffredo                                                                          

Name: Gary S. Loffredo

Title:   President of Digital Cinema,

General Counsel and Secretary

 

Piper Jaffray & Co.

 

 

By  /s/ Martin C. Alvarez                        

Name: Martin C. Alvarez

Title:   Managing Director

  

  

  

SCHEDULE I

 

	
Initial Purchaser

	
Principal Amount of Securities (1)        

	 
	  	  	 
	  	  	 
	
Piper Jaffray & Co.

	
$64,000,000

	 
	  	  	 
	  	  	 
	  	  	 
	  	  	 
	  	  	 
	  	  	 
	  	  	 
	  	  	 
	  	  	 
	  	  	 
	  	  	 
	  	  	 
	  	  	 
	
Total.................................................                                                      

	

$64,000,000

	 
	  	  	 

_________________

  

  

  

SCHEDULE II

 

Issuer Written Communications

 

1.           A term sheet substantially in the form of Schedule III hereto.

  

  

  

SCHEDULE III

 

Pricing Term Sheet

 

	
PRICING TERM SHEET

	 	 	
                                  STRICTLY CONFIDENTIAL

 

	
DATED April 23, 2015

 

 

CINEDIGM CORP.

 

$64,000,000 PRINCIPAL AMOUNT OF

 

5.5% CONVERTIBLE SENIOR NOTES DUE 2035

 

The information in this pricing term sheet supplements Cinedigm Corp’s preliminary offering memorandum, dated April 23, 2015 (the “Preliminary Offering Memorandum”), and supersedes the information in the Preliminary Offering Memorandum to the extent inconsistent with the information in the Preliminary Offering Memorandum. In all other respects, this term sheet is qualified in its entirety by reference to the Preliminary Offering Memorandum, including the documents incorporated by reference therein. References to “Cinedigm,” “the Company,” “we,” “our” and “us” refer only to Cinedigm Corp. and not to any of its subsidiaries. Terms used herein but not defined herein shall have the respective meanings as set forth in the Preliminary Offering Memorandum. All references to dollar amounts are references to U.S. dollars.

 

	
Issuer:

	
Cinedigm Corp., a Delaware corporation.

 

	
Ticker/Exchange for Our Common Stock:

	
Our common stock is listed on The Nasdaq Global Market under the symbol “CIDM.”

 

	
Securities:

	
5.5% Convertible Senior Notes due 2035 (the “notes”).

 

	
Principal Amount:

	
$64.0 million.  The Initial purchaser will not have an option to purchase additional notes to cover overallotments or otherwise.

 

	
Denominations:

	
$1,000 and integral multiples of $1,000 in excess thereof.

 

	
Maturity:

	
April 15, 2035, unless earlier converted, redeemed or repurchased.

 

	
Issue Price:

	
100% of principal, plus accrued interest, if any from April 29, 2015 if settlement occurs after that date.

 

	
Ranking:

	
Senior unsecured

 

	
Optional Redemption:

	
We may not redeem the notes prior to April 20, 2018. We may at our option redeem all or part of the notes at any time (1) on or after April 20, 2018 if the last reported sales price per share of our common stock has been  at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide written notice of redemption and (2) on or after April 20, 2020 regardless of the sale price condition described in clause (1), in each case, at a redemption price in cash equal to 100% of the principal amount of the notes to be redeemed, plus

  

  

  

	  	
accrued and unpaid interest to, but excluding, the redemption date.

 

	
Repurchase of Notes at Your Option on Specified Dates:

	
On April 20, 2020, April 20, 2025 and April 20, 2030, holders may require us to repurchase all or a portion of their notes in integral multiples of $1,000 at a repurchase price in cash equal to 100% of the principal amount of the notes being repurchased, plus accrued and unpaid interest, if any, to, but excluding, the relevant repurchase date. To exercise such right, a holder must deliver notes and a written repurchase notice to the paying agent no later than the second business day immediately preceding the relevant repurchase date.

 

	
Fundamental Change Permits Holders to Require Us to Repurchase Notes:

	
If a “fundamental change” (as defined in the Preliminary Offering Memorandum under the caption “Description of Notes—Repurchase at the Option of the Holders—Fundamental Change Permits Holders to Require Us to Repurchase Notes”) occurs at any time prior to the maturity date, you will have the right, at your option, to require us to repurchase for cash all or a portion of your notes in principal amounts of $1,000 or an integral multiple thereof at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. To exercise such right, a holder must deliver notes and a written repurchase notice to the paying agent no later than the second business day immediately preceding the relevant fundamental change repurchase date.

 

	
Interest and Interest Payment Dates:

	
5.5% per year. Interest will accrue from April 29, 2015 and will be payable semiannually in arrears on April 15 and October 15 of each year, beginning on October 15, 2015.   We will pay additional interest, if any, under the circumstances described under “Description of Notes—No Registration Rights; Additional Interest” in the Preliminary Offering Memorandum and, at our election, as the sole remedy relating to the failure to comply with our reporting obligations as described under “Description of Notes—Events of Default” in the Preliminary Offering Memorandum.

 

	
Regular Record Dates:

	
April 1 and October 1 of each year, as the case may be, immediately preceding each interest payment date.

 

	
Consolidated Closing Bid on The NASDAQ Global Market on April 23, 2015:

	
$0.9702 per share.

 

	
Initial Conversion Rate:

	
824.5723 shares of common stock per $1,000 principal amount of notes, subject to adjustment.

 

	
Initial Conversion Price:

	
Approximately $1.21 per share of common stock, subject to adjustment.

 

	
Conversion Premium:

	
Approximately 25% above the consolidated closing bid of our common stock on The NASDAQ Global Market on April 23, 2015.

 

	
Settlement Method for Conversions:

	
Shares of our common stock together with cash in lieu of fractional shares, as described in the Preliminary Offering Memorandum.

  

  

  

	
Sole Book-Running Manager:

	
Piper Jaffray & Co.

 

	
Pricing Date:

	
April 23, 2015.

 

	
Trade Date:

	
April 24, 2015.

 

	
Expected Settlement Date:

	
April 29, 2015.

 

	
CUSIP Number (144A):

	
172406 AA8

 

	
ISIN (144A):

	
US172406AA88

 

	
Listing:

	
None.

 

	
Use of Proceeds:

	
We estimate that the net proceeds from the offering of notes will be approximately $60.7, after deducting the initial purchaser’s discounts and commissions and estimated offering expenses payable by us.

We expect to use approximately $18.2 million of the net proceeds from the offering to repay borrowings under and terminate our term loan, approximately $11.4 million of the net proceeds to fund the cost of repurchasing approximately 11.8 million shares of our common stock pursuant to the forward stock purchase agreement described below, approximately $2.6  million of the net proceeds to fund the cost of repurchasing approximately 2.7 million shares of our common stock from purchasers of notes in privately negotiated transactions as described below and the remainder of the net proceeds for working capital and general corporate purposes, including development of our OTT channels and applications and possible acquisitions. However, we have no current commitments or obligations with respect to any acquisitions.

 

	
Forward Stock Purchase Transaction:

	
In connection with the pricing of the notes, we intend to enter into a privately negotiated forward stock purchase transaction with a financial institution, which is one of the lenders under the Cinedigm Credit Agreement (the “forward counterparty”), pursuant to which we will purchase in aggregate approximately 11.8 million shares of our commons stock, subject to adjustment, at a per share price of $0.97, which was the last reported sale price of our common stock on The NASDAQ Global Market on April 23, 2015.  We will prepay the purchase price for the shares in cash using a portion of the net proceeds from the offering of notes on the initial issuance date for the notes, expected to be April 29, 2015. Under the terms of the forward stock purchase transaction, the forward counterparty will be obligated to deliver the shares of common stock to us in settlement of those transactions on or about the fifth anniversary of the issuance date of the notes, subject to the ability of the forward counterparty to elect to settle all or a portion of its forward stock purchase transaction early.

The number of shares that we expect to agree to repurchase under the forward stock purchase transaction has been determined by the initial purchaser based on requests from the purchasers of the notes who engage in a convertible note arbitrage hedge strategy for an allocation of a synthetic short position to hedge the notes that they are purchasing in the offering and is also subject to customary anti-dilution adjustments. The

  

  

  

	  	
forward stock purchase transaction is generally expected to facilitate privately negotiated derivative transactions, including swaps, between the forward counterparty and investors in the notes relating to shares of our common stock by which investors in the notes will establish short positions relating to shares of our common stock and otherwise hedge their investments in the notes concurrently with the pricing of the notes. The forward counterparty or its affiliates generally expect to, but are not required to, enter into privately negotiated derivative transactions with investors in the notes at the pricing of the notes.

Our entry into the forward stock purchase transaction with the forward counterparty and the entry by the forward counterparty into derivative transactions in respect of shares of our common stock with the purchasers of the notes could have the effect of increasing, or reducing the size of any decrease in, the price of our common stock concurrently with, or shortly after, the pricing of the notes.

 

Neither we nor the forward counterparty will control how such investors may use such derivative transactions. In addition, such investors may enter into other transactions relating to our common stock or the notes in connection with or in addition to such derivative transactions, including the purchase or sale of shares of our common stock. As a result, the existence of the forward stock purchase transaction, such derivative transactions and any related market activity could cause more purchases or sales of shares of our common stock over the term of the forward stock purchase transaction than there otherwise would have been had we not entered into the forward stock purchase transaction. Such purchases or sales could potentially increase (or reduce the size of any decrease in) or decrease (or reduce the size of any increase in) the market price of our common stock and/or the trading price for the notes.

 

In addition, the forward counterparty or its affiliates are likely to modify their hedge positions in respect of the forward stock purchase transaction by entering into or unwinding various derivative transactions with respect to shares of our common stock and/or by purchasing shares of our common stock or other securities of ours in secondary market transactions following the pricing of the notes and prior to maturity of the forward stock purchase transaction (and are likely to do so during the final valuation period under the forward stock purchase transaction and on or around any election by the forward counterparty to settle all or a portion of its forward stock purchase transaction early).

 

The effect, if any, of any of these transactions and activities on the market price of our common stock or the notes will depend in part on market conditions and cannot be ascertained at this time, but any of these activities could adversely affect the value of our common stock, which could affect the value of the notes, the value of the shares of common stock, if any, you receive upon conversion of the notes and your ability to convert the notes. See ‘‘Risk Factors—Risks Related to this Offering and the Notes—The forward stock purchase transaction may affect the value of the notes and our common stock and may result in unexpected market activity in the notes and/or our common stock,’’ ‘‘Description of Forward Stock Purchase Transaction’’ and ‘‘Plan of Distribution—Forward Stock Purchase Transaction’’ in the Preliminary Offering

 

  

  

  

 

	  	
Memorandum.

 

	
Privately Negotiated Share Repurchases:

	
We expect to use approximately $2.6 million of the net proceeds from the offering to fund the cost of repurchasing approximately 2.7 million shares of our common stock  concurrently with or shortly after the closing of the offering of notes from purchasers of notes in privately negotiated transactions effected through the initial purchaser as our agent. We expect the purchase price per share of the common stock repurchased in such transactions to equal $0.97, which was the last reported sale price of our common stock on April 23, 2015.  These share repurchase transactions could have the effect of increasing, or reducing the size of any decrease in, the price of our common stock concurrently with, or shortly after, the pricing of the notes.

 

	
Amendment to Cinedigm Credit Agreement

	
Concurrently with this offering of the notes, we are entering into an amendment (the ‘‘Amendment’’) to our credit agreement (the ‘‘Cinedigm Credit Agreement’’) with Societe Generale (‘‘SG’’) and certain other lenders, which we amended and restated in January 2014 and which provides for a term loan and revolving loans. Upon repayment of the term loan with $18.2 million of proceeds from the offering, the Amendment will, among other things, extend the term of the revolving loans to March 31, 2018, provide for the release of the equity interests in Cinedigm’s subsidiaries that are currently pledged as collateral without affecting the remaining collateral, change the interest rate as described below, replace all financial covenants with a single debt service coverage ratio test commencing at June 30, 2016 as applied to the revolving loans and a $5.0 million minimum liquidity covenant, and provide consent to the issuance of the notes. Going forward, the revolving loans will bear interest at Base Rate (as defined below) + 3% or LIBOR + 4%, at our election, but in no event may the elected rate be less than 1%. Base Rate, per annum, is equal to the highest of (a) the rate quoted by the Wall Street Journal as the ‘‘base rate on corporate loans by at least 75% of the nation’s largest banks,’’ (b) .50% plus the Federal Funds Rate (as will be customarily defined in the Amendment), and (c) the Eurodollar Rate (as will be customarily defined in the Amendment) plus 1%.

 

 

__________________

 

 

 

  

  

  

Description of Notes—Conversion Rights—Increase in Conversion Rate upon Conversion upon a Make-Whole Fundamental Change or during a Redemption Period

 

If the effective date of a make-whole fundamental change (as defined in the Preliminary Offering Memorandum) occurs prior to April 20, 2020, and a holder elects to convert its notes in connection with such make-whole fundamental change or if we issue a notice of redemption prior to April 20, 2020, and a holder elects to convert notes during the related redemption period, we will, under certain circumstances, increase the conversion rate for the notes so surrendered for conversion by a number of additional shares of common stock.

 

The following table sets forth the number of additional shares by which the conversion rate will be increased per $1,000 principal amount of notes:

 

	  	
Stock Price

	
Effective Date / Redemption Notice Date

	
$0.98

	
$1.50

	
$2.00

	
$3.00

	
$4.00

	
$5.00

	
$6.00

	
$7.00

	
$8.00

	
$10.00

	
April 29, 2015.................................

	
204.0816

	
128.8800

	
93.2700

	
56.8567

	
38.2650

	
26.9560

	
19.3383

	
13.8543

	
9.7150

	
3.8830

	
April 15, 2016.................................

	
204.0816

	
106.3133

	
76.8150

	
46.7600

	
31.4675

	
22.1860

	
15.9467

	
11.4600

	
8.0788

	
3.3180

	
April 15, 2017.................................

	
204.0816

	
82.6867

	
59.6600

	
36.2867

	
24.4350

	
17.2620

	
12.4450

	
8.9886

	
6.3850

	
2.7240

	
April 15, 2018.................................

	
204.0816

	
57.5000

	
41.4350

	
25.1900

	
16.9850

	
12.0300

	
8.7100

	
6.3300

	
4.5388

	
2.0240

	
April 15, 2019.................................

	
204.0816

	
30.1133

	
21.6700

	
13.1700

	
8.8950

	
6.3180

	
4.5950

	
3.3614

	
2.4350

	
1.1350

	
April 19, 2020.................................

	
204.0816

	
0.0000

	
0.0000

	
0.0000

	
0.0000

	
0.0000

	
0.0000

	
0.0000

	
0.0000

	
0.0000

 

The exact stock prices and effective dates or redemption notice dates may not be set forth in the table above, in which case:

 

If the stock price is between two stock prices in the table or the effective date or redemption notice date, as the case may be, is between two effective dates or redemption notice dates, as the case may be, in the table, the number of additional shares by which the conversion rate will be increased will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock prices and the earlier and later effective dates or redemption notice dates, as applicable, based on a 365-day year.

 

If the stock price is greater than $10.00 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to the conversion rate.

 

If the stock price is less than $0.98 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to the conversion rate.

 

Notwithstanding the foregoing, in no event will the conversion rate per $1,000 principal amount of notes exceed 1,028.6539 shares of common stock, subject to adjustment in the same manner as the conversion rate as set forth in the Preliminary Offering Memorandum under the caption “Description of Notes—Conversion Rights—Conversion Rate Adjustments.”

 

Our obligation to increase the conversion rate for notes converted in connection with a make-whole fundamental change or during a redemption period could be considered a penalty, in which case the enforceability thereof would be subject to general principles of reasonableness and equitable remedies.

 

 

  

  

  

 

CAPITALIZATION

 

The following table sets forth our cash and cash equivalents and our capitalization as of December 31, 2014:

·      on an actual basis; and

 

	
  

	
·

	
on an as adjusted basis to give effect to the sale of $64.0 million aggregate principal of notes, and the application of the net proceeds therefrom as described in ‘‘Use of Proceeds” in the Preliminary Offering Memorandum, other than the application of net proceeds to repurchase shares of our common stock.

 

The table should be read in conjunction with ‘‘Use of Proceeds’’ in the Preliminary Offering Memorandum and ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ included in our Annual Report on Form 10-K for our fiscal year ended March 31, 2014 and in our Quarterly Report on Form 10-Q for our fiscal quarter ended December 31, 2014 and our consolidated financial statements and the related notes thereto, all of which are incorporated by reference into the Preliminary Offering Memorandum.

	  	 	
As of December 31, 2014

	 
	  	 	
Actual

	 	 	
As Adjusted

	 
	
(dollars in millions other than par value)

	 	
(unaudited)

	 
	
Cash and cash equivalents(1)

	 	$	29.6	 	 	$	72.1	 
	  	 	 	 	 	 	 	 	 
	
Long-term debt, including current portion                                                                                      

	 	 	 	 	 	 	 	 
	
Cinedigm Term Loans(2)                                                                                 

	 	$	19.3	 	 	$	—	 
	
Cinedigm Revolving Loans(2)                                                                                 

	 	 	19.3	 	 	 	19.3	 
	
2013 Notes                                                                                 

	 	 	5.0	 	 	 	5.0	 
	
5.5% Convertible Senior Notes offered hereby                                                                                 

	 	 	—	 	 	 	64.0	 
	
Total debt at Cinedigm Corp. level                                                                             

	 	 	43.6	 	 	 	88.3	 
	
Cinedigm Digital Funding I Term Loans                                                                                 

	 	 	70.1	 	 	 	70.1	 
	
Cinedigm Digital Cinema Holding Loan                                                                                 

	 	 	68.8	 	 	 	68.8	 
	
Access Digital Cinema Phase 2 KBC Facilities                                                                                 

	 	 	28.9	 	 	 	28.9	 
	
Other Phase 2 Indebtedness                                                                                 

	 	 	0.8	 	 	 	0.8	 
	
Total debt at consolidated subsidiary level(3)                                                                             

	 	 	168.6	 	 	 	168.6	 
	
Total debt                                                                         

	 	$	212.2	 	 	$	256.9	 
	
Stockholders’ deficit:

	 	 	 	 	 	 	 	 
	
Preferred stock, 15,000,000 shares authorized; Series A 10% — $0.001 par value per share; 20 shares authorized and 7 shares issued and outstanding actual and as adjusted

	 	$	3.6	 	 	 	3.6	 
	
Class A common stock, $0.001 par value per share; 210,000,000 shares authorized, 76,921,163 outstanding actual and as adjusted(4)

	 	 	—	 	 	 	—	 
	
Additional paid-in capital(1)

	 	 	277.3	 	 	 	277.3	 
	
Treasury stock, at cost, 51,440 Class A shares(1)

	 	 	(0.2	)	 	 	(0.2	)
	
Accumulated deficit

	 	 	(289.2	)	 	 	(289.2	)
	
Accumulated other comprehensive loss

	 	 	—	 	 	 	—	 
	
Total stockholders’ deficit(1)                                                                                      

	 	 	8.5	 	 	 	8.5	 
	
Total capitalization(1)                                                                                      

	 	$	203.8	 	 	$	248.4	 

 

	
(1)

	
Excludes the impact of the use of approximately $11.4 million of the net proceeds to fund the cost of repurchasing approximately 11.8 million shares of our common stock pursuant to the forward stock purchase agreement described under “Description of Forward Stock Purchase Transaction” in the Preliminary Offering Memorandum. The forward stock purchase transaction is a separate transaction entered into by us and the forward counterparty. The forward stock

 

  

  

  

 

	
 

	

purchase transaction is not part of the terms of the notes and will not affect the holders’ rights under the notes. Also excludes the impact of the use of approximately $2.6 million of the net proceeds to fund the cost of repurchasing approximately 2.7 million shares of our common stock concurrently with or shortly after the closing of the offering of notes from purchasers of notes in privately negotiated transactions effected through the initial purchaser as our agent.

 

	
(2).  

	
On October 17, 2013, we entered into the Cinedigm Credit Agreement, which we amended and restated in January 2014. The Cinedigm Credit Agreement includes a $25.0 million term loan and $30.0 million of revolving loans. Concurrently with the offering of the notes, we are entering into the Amendment to the Cinedigm Credit Agreement which will, among other things, extend the term of the revolving loans, allow the release of some of the collateral, change the interest rate, ease certain covenants as applied to the revolving loans, and provide consent to the issuance of the notes. See ‘‘Summary—Recent Developments’’ for more information about the Amendment. In connection with the offering of notes, we intend to repay borrowings under and terminate the term loan under the Cinedigm Credit Agreement. See ‘‘Use of Proceeds’’ in the Preliminary Offering Memorandum.

 

	
(3)

	
Does not include indebtedness of CDF2 Holdings, LLC, a ‘‘Variable Interest Entity’’ as defined in ASC 810 and entity in which we own 100% of the common equity interests, because we have determined that we are not the primary beneficiary of CDF2 Holdings, LLC. We regularly assess our variable interests in CDF2 Holdings, LLC and determined that we are not the primary beneficiary as of December 31, 2014 and therefore we do not consolidate Holdings in our financial reporting. As of December 31, 2014, CDF2 Holdings, LLC had $55.3 million of indebtedness.

 

	
(4)

	
The common stock shown in the table excludes: (i) 5,312,307 shares of common stock under the Company’s Second Amended and Restated 2000 Equity Incentive Plan as of December 31, 2014, (ii) 17,775,825 shares of common stock with respect to outstanding warrants, with a weighted average exercise price of $1.43, as of December 31, 2014, and (iii) 5,015,000 shares of common stock upon exercise of inducement stock options, with a weighted average exercise price of $2.62, as of December 31, 2014. The terms of the warrants exercisable into 16,000,000 shares of our common stock referred to in clause (ii) include standard anti-dilution protection, including to the extent we issue or sell shares of our common stock, or securities exercisable for or convertible into shares of our common stock, at a price per share below the exercise price of the warrants then in effect, which is currently $1.37. Because the initial conversion price related to the notes is approximately $1.21, the exercise price for such warrants will become $1.31, which will result in an additional 732,824 shares of our common stock underlying such warrants, all of which is excluded from the table above.  The actual and as adjusted common stock shown excludes the shares of common stock reserved for issuance upon conversion of the notes offered by the Preliminary Offering Memorandum.

 

 

 

 

 

  

  

  

 

__________________

 

This communication is intended for the sole use of the person to whom it is provided by the sender. This material is confidential and is for your information only and is not intended to be used by anyone other than you. This information does not purport to be a complete description of the notes or the offering.  This communication does not constitute an offer to sell or the solicitation of an offer to buy any notes in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.

 

The notes and any shares of common stock issuable upon conversion of the notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or any other securities laws, and may not be offered or sold within the United States or any other jurisdiction, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. The initial purchaser is initially offering the notes only to qualified institutional buyers as defined in, and in reliance on, Rule 144A under the Securities Act.

 

The notes and any shares of common stock issuable upon conversion of the notes are not transferable except in accordance with the restrictions described under “Notice to Investors” and “Transfer Restrictions” in the Preliminary Offering Memorandum.

 

A copy of the Preliminary Offering Memorandum may be obtained by contacting Piper Jaffray & Co. at 800-747-3924.

Any legends, disclaimers or other notices that may appear below are not applicable to this communication and should be disregarded.  Such legends, disclaimers or other notices have been automatically generated as a result of this communication having been sent via Bloomberg or another system.

 

  

  

  

SCHEDULE IV

 

Subsidiaries

 

	
  

	
1.

	
Access Digital Media, Inc., a Delaware corporation and a wholly-owned subsidiary of  Cinedigm DC Holdings, LLC.

	
  

	
2.

	
ADM Cinema Corporation d/b/a the Pavilion Theatre, a Delaware corporation and a wholly-owned subsidiary of the Company.

	
  

	
3.

	
Christie/AIX, Inc., a Delaware corporation and a wholly-owned subsidiary of Access Digital Media, Inc.

	
  

	
4.

	
Vistachiara Productions Inc., d/b/a The Bigger Picture, a Delaware corporation and a wholly-owned subsidiary of the Company.

	
  

	
5.

	
Access Digital Cinema Phase 2, Corp., a Delaware corporation and a wholly-owned subsidiary of the Company.

	
  

	
6.

	
Vistachiara Entertainment, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company.

	
  

	
7.

	
Access Digital Cinema Phase 2 B/AIX Corp., a Delaware corporation and a wholly-owned subsidiary of Access Digital Cinema Phase 2 Corp.

 

	
  

	
8.

	
Cinedigm Digital Funding 1, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Christie/AIX, Inc.

 

	
  

	
9.

	
CDF2 Holdings, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Access Digital Cinema Phase 2 Corp.

 

	
  

	
10.

	
Cinedigm Digital Funding 2, LLC, a Delaware limited liability company and a wholly-owned subsidiary of CDF2 Holdings, LLC.

 

	
  

	
11.

	
Cinedigm Entertainment Corp., a New York corporation and a wholly-owned subsidiary of the Company.

 

	
  

	
12.

	
Cinedigm Digital Cinema Australia Pty Ltd, an Australian proprietary company and a wholly-owned subsidiary of the Company.

 

	
  

	
13.

	
Cinedigm DC Holdings, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company.

 

	
  

	
14.

	
Cinedigm Entertainment Holdings, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company.

 

	
  

	
15.

	
Cinedigm Home Entertainment, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Cinedigm Entertainment Holdings, LLC.

  

  

  

 

	
  

	
16.

	
Con TV, LLC, a 47.5% owned subsidiary of Cinedigm Entertainment Corp.

 

	
  

	
17.

	
Docurama, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Cinedigm Entertainment Corp.

 

	
  

	
18.

	
Dove Family Channel, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Cinedigm Entertainment Corp.

 

 

  

  

  

 

SCHEDULE V

 

List of Individuals and Entities Executing Lock-Up Agreements

 

Officers

 

	
  

	
1.

	
Christopher J. McGurk

 

	
  

	
2.

	
Gary S. Loffredo

 

	
  

	
3.

	
Adam Mizel

 

	
  

	
4.

	
Jeffrey S. Edell

 

 

Non-Employee Directors

 

	
  

	
1.

	
Peter C. Brown

 

	
  

	
2.

	
Wayne L. Clevenger

 

	
  

	
3.

	
Matthew W. Finlay

 

	
  

	
4.

	
Martin B. O’Connor II

 

	
  

	
5.

	
Laura Nisonger Sims

 

 

Stockholders

 

	
  

	
1.

	
Sageview Capital Master, L.P.

 

  

  

  

EXHIBIT A

 

Form of Lock-Up Agreement

 

April [•], 2015

Piper Jaffray & Co.

in Schedule I to the Purchase Agreement

referred to below

c/o  Piper Jaffray & Co.

800 Nicollet Mall, Suite 800

Minneapolis, MN 55402

Dear Ladies and Gentleman:

 

As an inducement to the initial purchaser (the “Initial Purchaser”) to execute a purchase agreement (the “Purchase Agreement”) with Cinedigm Corp. and any successor (by merger or otherwise) thereto (the “Company”), providing for the offering (the “Offering”) of Convertible Senior Notes (the “Notes”) of the Company that are convertible into shares of the Company’s common stock, par value $0.001 (the “Common Stock”), the undersigned hereby agrees that without, in each case, the prior written consent of Piper Jaffray & Co. (“Piper Jaffray”) during the period specified in the succeeding paragraph (the “Lock-Up Period”), the undersigned will not: (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into, exercisable or exchangeable for or that represent the right to receive Common Stock (including without limitation, Common Stock which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and securities which may be issued upon exercise of a stock option or warrant) whether now owned or hereafter acquired (the “Undersigned’s Securities”); (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Undersigned’s Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise; (3) make any demand for or exercise any right with respect to, the registration of any Common Stock or any security convertible into or exercisable or exchangeable for Common Stock; or (4) publicly disclose the intention to do any of the foregoing.

The undersigned agrees that the foregoing restrictions preclude the undersigned from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Undersigned’s Securities even if such Securities would be disposed of by someone other than the undersigned.  Such prohibited hedging or other transactions would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put or call option) with respect to any

  

A-1

  

of the Undersigned’s Securities or with respect to any security that includes, relates to, or derives any significant part of its value from such Securities.  The Lock-Up Period will commence on the date of this Agreement and continue and include the date 90 days after the date of the final offering memorandum relating to the Offering.

If the undersigned is an officer or director of the Company, (i) Piper Jaffray agrees that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of shares of Common Stock, Piper Jaffray will notify the Company of the impending release or waiver, and (ii) the Company has agreed in the Purchase Agreement to announce the impending release or waiver by issuing a press release through a major news service at least two business days before the effective date of the release or waiver.  Any release or waiver granted by Piper Jaffray hereunder to any such officer or director shall only be effective two business days after the publication date of such press release.  The provisions of this paragraph will not apply if both (a) the release or waiver is effected solely to permit a transfer not for consideration, and (b) the transferee has agreed in writing to be bound by the same terms described in this letter that are applicable to the transferor, to the extent and for the duration that such terms remain in effect at the time of the transfer.

Notwithstanding the foregoing, the undersigned may transfer the Undersigned’s Securities (i) as a bona fide gift or gifts, (ii) to an immediate family member or any trust for the direct or indirect benefit of the undersigned or the immediate family or one or more members of the immediate family of the undersigned, (iii) to any corporation, partnership or limited liability company, all of the shareholders, partners or members of which consist of the undersigned and/or one or more members of such undersigned’s immediate family, (iv) if the undersigned is a corporation, partnership, limited liability company, trust or other business entity (A) to another corporation, partnership, limited liability company, trust or other business entity that is an affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933, as amended) of the undersigned or (B) to limited partners, limited liability company members or stockholders of the undersigned as distributions of shares of Common Stock or any security convertible into or exercisable for Common Stock, (v) if the undersigned is a trust, transfers to the beneficiary of such trust, (vi) by testate succession or intestate succession; provided, in the case of clauses (i)-(vi), that (x) such transfer shall not involve a disposition for value, (y) the transferee has agreed in writing with the Initial Purchaser to be bound by the terms of this Lock-Up Agreement that are applicable to the transferor, to the extent and for the duration that such terms remain in effect at the time of the transfer, and (z) no filing by any party under Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), shall be required or shall be made voluntarily in connection with such transfer.  For purposes of this Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, nor more remote than first cousin.

 

In addition, the foregoing restrictions shall not apply to (i) the exercise of stock options granted pursuant to the Company’s equity incentive plans; provided that it shall apply to any of the Undersigned’s Securities issued upon such exercise, or (ii) the establishment of any contract, instruction or plan (a “Plan”) that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act; provided that no sales of the Undersigned’s Securities shall be made pursuant to such a Plan prior to the expiration of the Lock-Up Period (as such may have been extended pursuant to the provisions hereof), and such a Plan may only be established if no public

 

  

A-2

  

announcement of the establishment or existence thereof and no filing with the Securities and Exchange Commission or other regulatory authority in respect thereof or transactions thereunder or contemplated thereby, by the undersigned, the Company or any other person, shall be required, and no such announcement or filing is made voluntarily, by the undersigned, the Company or any other person, prior to the expiration of the Lock-Up Period (as such may have been extended pursuant to the provisions hereof).

 

In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby authorized to decline to make any transfer of shares of Common Stock if such transfer would constitute a violation or breach of this Agreement.

 

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Agreement and that upon request, the undersigned will execute any additional documents necessary to ensure the validity or enforcement of this Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.

 

The undersigned understands that the undersigned shall be released from all obligations under this Agreement if (i) the Company notifies the Initial Purchaser that it does not intend to proceed with the Offering, (ii) the Purchase Agreement does not become effective, or if the Purchase Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Notes to be sold thereunder, or (iii) the Offering is not completed by May 29, 2015.

 

The undersigned understands that the Initial Purchaser are entering into the Purchase Agreement and proceeding with the Offering in reliance upon this Agreement.

 

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

 

Very truly yours,

 

 

                                                                             

         Printed Name of Holder

 

 

 

 

 

By:                                                                        

                          Signature

 

 

 

                                                                               

       Printed Name of Person Signing

(and indicate capacity of person signing if

signing as custodian, trustee, or on behalf

                         of an entity)

  

A-3

  

EXHIBIT B

 

Form of Company Press Release for Waivers or Releases

 

of Officer/Director Lock-Up Agreements

 

Cinedigm Corp.

 

April __, 2015

 

Cinedigm Corp. (the “Company”) announced today that Piper Jaffray, the sole book-running manager is [waiving] [releasing] [a] lock-up restriction[s] with respect to an aggregate of **[# of common shares] held by certain [officers] [directors] [stockholders] of the Company.  These [officers] [directors] [stockholders] entered into lock-up agreements with Piper Jaffray in connection with the Company’s offering of convertible senior notes.

 

This [waiver] [release] will take effect on [date that is at least 2 business days following date of this press release].

 

This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.

 

  

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EXHIBIT C

 

CINEDIGM CORP.

CHIEF FINANCIAL OFFICER’S CERTIFICATE

 April 29, 2015

In accordance with Section 5(i) of the Note Purchase Agreement (as defined below), the undersigned, Jeffrey S. Edell, Chief Financial Officer of Cinedigm Corp., a Delaware corporation (the “Company”), in connection with the offering of $64,000,000 principal amount of its 5.5% Convertible Senior Notes due 2035 pursuant to that certain Note Purchase Agreement, dated as of April 23, 2015 (the “Agreement”), by and between the Company and Piper Jaffray & Co. (the “Initial Purchaser”), hereby certifies, on behalf of the Company, that:

 

I am duly elected, qualified and am acting in the capacity set forth above, am familiar with the facts certified herein and have made any and all additional inquiries necessary in my judgment in order to make the certifications herein.

 

I have reviewed each of the circled items identified on the copies of the Company’s Preliminary Offering Memorandum, dated April 23, 2015, and the Company’s Offering Memorandum, dated April 23, 2015 (together, the “Offering Memoranda”), attached hereto as Exhibit A, regarding certain financial and statistical information and other related matters (the “Financial and Statistical Information”), and hereby confirm that the Financial and Statistical Information is in agreement with the Company’s internal accounting and financial records.

 

Nothing has come to my attention that causes me to believe that any modifications should be made to the Financial and Statistical Information included in the Offering Memoranda.

 

The Initial Purchaser (and its counsel) is entitled to rely on this Chief Financial Officer’s Certificate in connection with the transactions contemplated by the Agreement.

 

  

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IN WITNESS WHEREOF, I have hereunto set my hand to this Chief Financial Officer’s Certificate as of the date first written above.

 

CINEDIGM CORP.

By: ___________________________

           Jeffrey S. Edell

           Chief Financial Officer

  

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