Document:

exhibit_4-7.htm

Exhibit 4.7

 

SHARE PURCHASE AGREEMENT

 

by and among:

 

silicom Ltd.,

an Israeli company;

 

FIBERBLAZE A/S,

A Danish company;

 

NIKOLAJ HERMANN and FIBERBLAZE HOLDING APS

A Danish company

 

and

 

JAKOB HILMER and HILMER APS

A Danish Company

 

___________________________

 

 

Dated as of December 10, 2014

 

___________________________

 

  

  

  

TABLE OF CONTENTS

 

	
1.

	
TERMS AND DEFINITIONS

	
1

	
2.

	
DESCRIPTION OF TRANSACTION

	
9

	
3.

	
REPRESENTATIONS AND WARRANTIES RELATING TO SELLING SHAREHOLDERS.

	
11

	
4.

	
REPRESENTATIONS AND WARRANTIES RELATING TO THE ACQUIRED COMPANIES

	
12

	
5.

	
REPRESENTATIONS AND WARRANTIES OF PURCHASER

	
29

	
6.

	
COVENANTS

	
29

	
7.

	
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER

	
34

	
8.

	
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLING SHAREHOLDERS

	
36

	
9.

	
TERMINATION

	
37

	
10.

	
INDEMNIFICATION, ETC.

	
38

	
11.

	
MISCELLANEOUS PROVISIONS

	
41

 

  

  

  

 

SHARE PURCHASE AGREEMENT

 

This Share Purchase Agreement is made and entered into as of December 10, 2014, by and among: silicom Ltd., an Israeli company (company number 520041120) (“Purchaser”); FIBERBLAZE A/S, a Danish company with the CVR no. 31 30 12 70 (the “Company”), Nikolaj Hermann, FIBERBLAZE HOLDING APS, a Danish company with the CVR no. 31 28 29 26, HILMER APS, a Danish company with the CVR no. 31 28 49 96, and Jakob Hilmer (Nikolaj Hermann (for purposes of sections 3 and 6.11  ONLY), Fiberblaze Holding APS, Jakob Hilmer (for purposes of sections 3 and 6.11 ONLY) and Hilmer APS each a “Selling Shareholder” and, collectively, the “Selling Shareholders”).

 

Recitals

 

A.           The Selling Shareholders are the beneficial owners of all of the issued shares in the Company (each owning 50% of issued shares in the Company).

 

B.           The Selling Shareholders have agreed to sell to Purchaser, and Purchaser has agreed to purchase from the Selling Shareholders, the Company Shares held by the Selling Shareholders, on the terms and subject to the conditions of this Agreement.

 

Agreement

 

In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

	
1.

	
Terms And Definitions

 

	 	
1.1.

	
As used in this Agreement, the following terms have the following meanings:

 

Acquired Companies. “Acquired Companies” shall mean: (a) the Company; and (b) FIBERBLAZE US LLC, a limited liability company incorporated in the State of New York, Taxpayer ID TF7183404, being a 100% owned Subsidiary of the Company.

 

Acquired Company Contract. “Acquired Company Contract” shall mean any Contract: (a) to which any Acquired Company is a party; (b) by which any Acquired Company or any of its assets is or may become bound or under which any Acquired Company has, or may become subject to, any obligation; or (c) under which any Acquired Company has or may acquire any right or interest.

 

Acquired Company Employee. “Acquired Company Employee” shall mean any employee, director or independent contractor of any Acquired Company.

 

Acquired Company Employee Agreement. “Acquired Company Employee Agreement” shall mean each management, employment, severance, consulting, relocation, repatriation or expatriation agreement or other Contract between any Acquired Company and any current Acquired Company Employee.

 

Acquired Company Employee Plan. “Acquired Company Employee Plan” shall mean any plan, program, policy, practice, Contract or other arrangement providing for compensation, severance, termination pay, deferred compensation, performance awards, stock or stock-related awards, fringe benefits or other employee benefits or remuneration of any kind, whether written, unwritten or otherwise, funded or unfunded, that is or has been maintained, contributed to, or required to be contributed to, by any Acquired Company for the benefit of any Acquired Company Employee, or with respect to which any Acquired Company has or may have any liability or obligation, excluding any Acquired Company Employee Agreement.

 

Acquired Company IP. “Acquired Company IP” shall mean all Intellectual Property and Intellectual Property Rights in which any Acquired Company has (or purports to have) an ownership interest or a license or similar right.

 

  

  

  

Acquisition Transaction. “Acquisition Transaction” shall mean any transaction or series of transactions involving:

 

(a)           the sale, license or disposition of all or a material portion of any Acquired Company’s business, properties, assets or share capital;

 

(b)           the issuance, disposition or acquisition of: (i) any shares or other equity security of any Acquired Company, (ii) any other right to acquire any securities of any Acquired Company, or (iii) any instrument or obligation that is or may become convertible into or exchangeable for any securities of any Acquired Company;

 

(c)           any merger, consolidation, business combination, reorganization or similar transaction involving any Acquired Company; or

 

(d)           any engagement of all or substantially all of the employees, consultants and contractors of any Acquired Company; or

 

(e)           any joint venture or other strategic investment in or involving any Acquired Company (other than an ongoing commercial or strategic relationship in the ordinary course of business).

 

Adjustment Amount. “Adjustment Amount” shall mean the amount by which the Purchase Price will be increased or reduced following the Closing pursuant to Section 6.10, on the basis of the changes, if any, between the Estimated Closing Consideration Certificate and the Closing Consideration Certificate. To the extent that there is a difference between the Estimated Closing Consideration Certificate and the Closing Consideration Certificate, which would result in a change to the amount of the Closing Payment (had such Closing Payment been calculated on the basis of the Closing Consideration Certificate) then such change, if positive, will cause the Purchase Price to increase by the amount of the change, and if negative, will cause the Purchase Price to be reduced by the amount of the change.

 

Affiliate. “Affiliate” of any Person shall mean another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person.

 

Agreement. “Agreement” shall mean this Share Purchase Agreement.

 

Business. “Business” means the business of developing, marketing, selling and supporting Network Interface Cards based on FPGA technology used either within financial trading or for packet capture. The technology used could include TOE, time stamping, and packet filtering.

 

Business Day. “Business Day” shall mean any day other than a Friday, Saturday or a Sunday or a day on which the banking institutions in Denmark or Israel are authorized by law or executive order to close.

 

Charter Documents. “Charter Documents” shall mean the articles of association or similar organizational documents, including all amendments thereto, of each of the Acquired Companies.

 

Closing. “Closing” shall mean as defined in Section 2.3.

 

Closing Accounts Payable Amount. “Closing Accounts Payable Amount” shall mean the amount of the Acquired Companies accounts payable immediately preceding the Closing (excluding provision for mandatory employee holiday pay commitments (feriepengeforpligtelse)).

 

Closing Accounts Receivable Amount. “Closing Accounts Receivable Amount” shall mean the amount of the Acquired Companies accounts receivable immediately preceding the Closing (consisting of trade, accruals and VAT (moms)).

 

Closing Balance Sheets. “Closing Balance Sheets” shall mean as defined in Section 6.10.

 

Closing Cash Amount. “Closing Cash Amount” shall mean the cash balance and cash equivalents of the Acquired Companies (including bank deposits) immediately preceding the Closing.

 

  

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Closing Certificate. “Closing Certificate” shall mean as defined in Section 7.6(f).

 

Closing Consideration Certificate. “Closing Consideration Certificate” shall mean as defined in Section 6.10.

 

Closing Consideration Certificate Data. “Closing Consideration Certificate Data” shall mean as defined in Section 4.4(c).

 

Closing Date. “Closing Date” shall mean as defined in Section 2.3.

 

Closing Indebtedness Amount. “Closing Indebtedness Amount” means the amount of outstanding Indebtedness immediately preceding the Closing (including principal, interest, fees and any other amounts payable in relation thereto and including for avoidance of doubt the Pay-Off Amounts).

 

Closing Payment. “Closing Payment” shall mean be an amount equal to $10,000,000, plus the Purchase Price Excess Amount, if any, minus the sum of (i) the Purchase Price Shortfall Amount, if any, and (ii) the Escrow Amount.

 

Company Financial Statements. “Company Financial Statements” shall mean the following financial statements and notes in English: (i) the solo audited balance sheets and related statements of income of each of the Acquired Companies as of August 31, 2014, and August 31, 2013 (it being understood, that the 2013 accounts for Fiberblaze US LLC are not fully audited) together with the notes thereto, and the solo audited balance sheet and related statements of income of the Company as of August 31, 2012, together with the notes thereto; and (ii) the Interim Balance Sheets.

 

Company IP. “Company IP” shall mean (a) all Intellectual Property Rights and Intellectual Property in each Company Product; (b) all other Intellectual Property Rights and Intellectual Property in which any of the Acquired Companies has (or purports to have) an ownership interest of any nature or a license or similar right, and (c) any other Intellectual Property Rights that are utilized in the Acquired Companies’ business.

 

Company IP Contract. “Company IP Contract” shall mean any Contract to which any Acquired Company is or was a party or by which any Acquired Company is or was bound, that contains any assignment or license of, or any covenant not to assert or enforce, any Intellectual Property Right or that otherwise relates to any Company IP or any Intellectual Property created or developed by, with or for any Acquired Company.

 

Company Option. “Company Option” shall mean any option or other warrant or similar right to purchase (or otherwise exercised in exchange for) Company Shares or other equity securities of the Company (or exercisable for cash) outstanding under a share incentive plan or otherwise.

 

Company Product. “Company Product” shall mean each product or service created, developed (or under development through the date hereof), manufactured, marketed, provided, distributed, licensed, or sold by any Acquired Company at any time.

 

Company Shares. “Company Shares” shall mean all of the outstanding share capital of the Company.

 

Company Software. “Company Software” shall mean any software (including firmware and other software embedded in hardware devices) owned, created, developed (or currently being developed), used, marketed, provided, distributed, licensed, or sold by any of the Acquired Companies at any time.

 

Consent. “Consent” shall mean any approval, consent, ratification, permission, waiver or authorization (including any Governmental Authorization).

 

Contaminant. “Contaminant” includes any material, substance, chemical, gas, liquid, waste, effluent, pollutant or contaminant which, whether on its own or admixed with another, is identified or defined in or regulated by or pursuant to any Environmental Laws or which upon release into the Environment presents a danger to the Environment or to the health or safety or welfare of any person.

 

  

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Contract. “Contract” shall mean any written, oral or other agreement, contract, subcontract, statement of work, lease, understanding, arrangement, instrument, note, warranty, insurance policy, benefit plan or legally binding commitment or undertaking of any nature.

 

Damages. “Damages” shall include any loss, damage, Liability, claim, demand, settlement, judgment, award, fine, penalty, Tax, fee (including reasonable attorneys’ fees), charge, cost (including reasonable costs of investigation) or expense of any nature; but excluding any consequential losses, indirect losses or loss of profit.

 

Design Win Payment. “Design Win Payment” shall mean as defined in Section 2.2(b)(ii).

 

Disclosure Schedule. “Disclosure Schedule” shall mean the schedule (dated as of the date of the Agreement) prepared in accordance with Sections 3 and 4, delivered to Purchaser on behalf of the Company and the Selling Shareholders.

 

Due Diligence Material. "Due Diligence Material" shall mean documents disclosed in the electronic data room organized by the Company, the questions and answers set out in the e-mail correspondence between the Company and the Purchaser and the Purchaser’s Representatives, and the materials regarding the Company Products, provided in connection with the due diligence investigation conducted by Purchaser and the Purchasers Representatives. The Due Diligence Material is attached as Schedule I (CD-Rom).

 

Encumbrance. “Encumbrance” shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, claim or restriction of any nature.

 

End Date. “End Date” shall mean January 31, 2015.

 

Entity. “Entity” shall mean any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity.

 

Environment. “Environment” includes (a) any and all buildings, structures, fixtures, fittings, appurtenances, pipes, conduits, valves, tanks, vessels and containers whether above or below ground level, and (b) ambient air, land surface, sub-surface strata, soil, surface water, ground water, river sediment, marshes, wet lands, flora and fauna.

 

Environmental Law. “Environmental Law” shall mean: all Legal Requirements, by-laws, orders, instruments, directives, decisions, injunctions and judgments of any government, local government, international, supranational, executive, administrative, judicial or regulatory authority or other Governmental Body and all approved codes of practice (whether voluntary or compulsory) relating to the protection of the Environment or of human health or safety or welfare or to the manufacture, formulation, processing, treatment, storage, containment, labeling, handling, transportation, distribution, recycling, reuse, release, disposal, removal, remediation, abatement or clean-up of any Contaminant and any amendment thereto and any and all regulations, orders and notices made or served thereunder or pursuant thereto).

 

Environmental Licenses. “Environmental License” means any permit, licenses, approval, permission, consent or authorization required by or pursuant to any applicable Environmental Laws.

 

Environmental Release. “Environmental Release” means the spilling, leaking, pumping, pouring, emitting, releasing, emptying, discharging, injecting, escaping, leaching, dumping, leaving, discarding or disposing of any Contaminant into or upon the Environment.

 

Escrow Account. “Escrow Account” shall mean as defined in Section 2.2(c).

 

  

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Escrow Agent. “Escrow Agent” shall mean as defined in Section 2.2(c).

 

Escrow Agreement. “Escrow Agreement” shall mean as defined in Section 2.2(c).

 

Escrow Amount. “Escrow Amount” shall mean as defined in Section 2.2(c).

 

Estimated Closing Consideration Certificate. “Estimated Closing Consideration Certificate” shall mean as defined in Section 4.4(c).

 

Evaluation Date. “Evaluation Date” means August 31, 2015.

 

Evaluation Period. “Evaluation Period” means the period between September 1, 2013 and the Evaluation Date.

 

Excess Amount. “Excess Amount” shall mean as defined in Section 2.2(b)(i).

 

Excess Payment. “Excess Payment” shall mean as defined in Section 2.2(b)(i).

 

Expert. "Expert" shall mean a state-authorised public accountant appointed by an internationally recognised auditing firm, who is one of the “big four” accounting firms, not having advised any of the Parties or the Parties group for the past 2 years, among its partners.

 

Founders. “Founders” shall mean each of Jakob Hilmer and Nikolaj Hermann.

 

GAAP. “GAAP” shall mean generally accepted accounting principles in Denmark.

 

Good Reason. "Good Reason" shall mean the situation where a Founder resigns from his employment by the Company or the Purchaser (or any other company within the Purchaser group) solely as a result of a material breach of his employment agreement by the employer; provided that such Founder has provided written notice to the employer of such breach and such breach was not cured within 15 Business Days of such notice.

 

Governmental Authorization. “Governmental Authorization” shall mean any: (a) permit, license, certificate, franchise, permission, clearance, registration, qualification or authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement; or (b) right under any Contract with any Governmental Body.

 

Governmental Body. “Governmental Body” shall mean any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; or (c) governmental or quasi-governmental authority of any nature (including any governmental division, department, agency, commission, instrumentality, official, organization, unit, body or Entity and any court or other tribunal).

 

Governmental Grant. “Governmental Grant” shall mean any grant, incentive, subsidy, award, participation, exemption, status, cost sharing arrangement, reimbursement arrangement or other benefit, relief or privilege provided or made available by or on behalf of or under the authority of the European Union or any other Governmental Body.

 

  

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Indebtedness. “Indebtedness” shall mean without duplication: (a) all obligations (including the principal amount thereof or, if applicable, the accreted amount thereof and the amount of accrued and unpaid interest thereon) of any Acquired Company, whether or not represented by bonds, debentures, notes or other securities (whether or not convertible into any other security), for the repayment of money borrowed, whether owing to banks or other financial institutions, on equipment leases or otherwise; (b) all deferred indebtedness of any Acquired Company for the payment of the purchase price of property or assets purchased (other than accounts payable incurred in the ordinary course of business); (c) all obligations of any Acquired Company to pay rent or other amounts under a lease which is required to be classified as a capital lease on the face of a balance sheet prepared in accordance with GAAP (applied on a basis consistent with the basis on which the Company Financial Statements were prepared and in accordance with the Acquired Companies’ historic past practice), or with respect to such Indebtedness at Closing, prepared in accordance with US GAAP; (d) all outstanding reimbursement obligations of any Acquired Company with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of any Acquired Company; (e) all obligations of any Acquired Company under any interest rate swap agreement, forward rate agreement, interest rate cap or collar agreement or other financial agreement or arrangement entered into for the purpose of limiting or managing interest rate risks; (f) all obligations secured by any Encumbrance existing on property owned by any Acquired Company, whether or not indebtedness secured thereby will have been assumed; (g) all guaranties, endorsements, assumptions and other contingent obligations of any Acquired Company in respect of, or to purchase or to otherwise acquire, indebtedness of others; (h) all premiums, penalties, fees, expenses, breakage costs and change of control payments required to be paid or offered in respect of any of the foregoing on prepayment, as a result of the consummation of the transactions contemplated by the Agreement or in connection with any lender Consent; and (i) all obligations of any Acquired Company, whether interest bearing or otherwise, owed to any securityholder of any Acquired Company and or any Affiliate of any securityholder of any Acquired Company.

 

Indemnitee. “Indemnitee” shall mean any of the following Persons: (a) Purchaser; (b) Purchaser’s current and future Affiliates; or (c) the respective successors and assigns of the Persons referred to in clauses “(a)” or “(b)” above.

 

Intellectual Property. “Intellectual Property” shall mean algorithms, APIs, databases, data collections, diagrams, formulae, inventions (whether or not patentable), know-how, logos, marks (including brand names, product names, logos, and slogans), methods, network configurations and architectures, processes, proprietary information, protocols, schematics, specifications, software, software code (in any form, including source code and executable or object code), subroutines, techniques, user interfaces, URLs, websites, works of authorship and other forms of technology (whether or not embodied in any tangible form and including all tangible embodiments of the foregoing, such as instruction manuals, laboratory notebooks, prototypes, samples, studies and summaries).

 

Intellectual Property Rights. “Intellectual Property Rights” shall mean all rights of the following types, which may exist or be created under the laws of any jurisdiction in the world: (A) rights associated with works of authorship, including exclusive exploitation rights, copyrights, moral rights and mask works; (B) trademark and trade name rights and similar rights; (C) trade secret rights; (D) patent and industrial property rights; (E) other proprietary rights in Intellectual Property; and (F) rights in or relating to registrations, renewals, extensions, combinations, divisions, and reissues of, and applications for, any of the rights referred to in clauses “(A)” through “(E)” above.

 

Interim Balance Sheets. “Interim Balance Sheets” shall mean the estimated solo balance sheets of each the Acquired Companies and the statements of income as of December 9, 2014 prepared in accordance with GAAP applied on a basis consistent with the basis on which the Company Financial Statements were prepared and in accordance with the Acquired Companies’ historic past practice.

 

Key Employees. “Key Employees” shall mean each of the Persons set forth in Schedule II.

 

Knowledge. An individual shall be deemed to have “Knowledge” of a particular fact or other matter if such individual is actually aware of such fact or other matter after making due inquiries regarding the relevant matter of all relevant key employees. The Company or the Selling Shareholders shall be deemed to have “Knowledge” of a particular fact or other matter if any Selling Shareholder, any officer, director or Key Employee of any Acquired Company has Knowledge of such fact or other matter. The Purchaser shall be deemed to have “Knowledge” of a particular fact or other matter if such fact or other matter has been Made Available to Purchaser in sufficient and explicit detail in the Due Diligence Material and the Disclosure Schedule.

 

Legal Proceeding. “Legal Proceeding” shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, audit, examination or investigation commenced, brought, conducted or heard by or before, or otherwise involving, any court or other Governmental Body or any arbitrator or arbitration panel.

 

  

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Legal Requirement. “Legal Requirement” shall mean any federal, state, local, municipal, foreign (including Israeli and Denmark, as applicable) or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body.

 

Liability. “Liability” shall mean any debt, obligation, duty or liability of any nature (including any undisclosed, unmatured, unaccrued, unasserted, contingent, conditional, implied, vicarious, derivative, joint, several or secondary liability), regardless of whether such debt, obligation, duty or liability would be required to be disclosed on a balance sheet prepared in accordance with GAAP or US GAAP.

 

Made Available to Purchaser. Any statement made herein to the effect that any information, document or other material has been “Made Available to Purchaser” shall mean that such information, document or material (including the Due Diligence Material) was made available for review by Purchaser or Purchaser’s Representatives.

 

Material Adverse Effect. “Material Adverse Effect” shall mean any change, event, effect, claim, circumstance or matter (each, an “Effect”) that is, or could reasonably be expected to be or to become, materially adverse to: (a) the business, condition, assets, capitalization, Intellectual Property, Liabilities, operations, results of operations or financial performance of the Acquired Companies taken as a whole; (b) Purchaser’s right to directly or indirectly own, or to directly or indirectly receive dividends or other distributions with respect to, the shares of any Acquired Company; or (c) the ability of the Company or any of the Selling Shareholders to perform any of their covenants or obligations under this Agreement or under any other Contract or instrument executed, delivered or entered into in connection with any of the transactions contemplated by this Agreement other than any Effect (i) relating to or resulting from economic conditions in general (other than fluctuations in the value of any currency) or (ii) relating to the specific industry in which the Acquired Companies' operate.

 

Material Contracts. “Material Contracts” shall mean as defined in Section 4.11(a).

 

NDA. “NDA” shall mean the Mutual Non-Disclosure Agreement entered into by the Parties dated July 8th, 2014.

 

Ordinary Shares. “Ordinary Shares” shall mean the ordinary shares, par value DKK 1.00 per share, of the Company.

 

Open Source Code. “Open Source Code” means any software code that is distributed under the GNU General Public License, the Affero General Public License, the GNU Lesser General Public License, the Eclipse Public License, the Common Public License, the Mozilla Public License, or any other license identified as an open source license by either the Open Source Initiative (www.opensource.org) or the Free Software Foundation (an “Open Source License”) and any other software code made available under any license term or condition that requires or could require, or conditions or could condition, that such software or other software combined and/or distributed with such software be: (a) disclosed or distributed in source code form; (b) licensed for the purpose of making derivative works; (c) redistributable at no charge or (d) distributed with certain attribution or notice requirements.

 

  

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Pay-Off Amounts. "Pay-Off Amounts" shall mean such amounts in such currencies as notified under Section 4.4 as being the amount required: (i) to fully discharge the Indebtedness (whether or not due and payable) owed under or in connection with the Pay-Off Debt and any hedging related to the Pay-Off Debt at the Closing Date (for the avoidance of doubt, including the outstanding principal amount of any drawing and any accrued but unpaid interest thereon at the Closing Date); (ii) to release all guarantees and security in relation to the Pay-Off Debt and any hedging, swap or similar arrangements related to the Pay-Off Debt at the Closing Date (such amount being inclusive of the complete unwind and settlement of such arrangements); and (iii) to terminate the Pay-Off Debt and any hedging related to the Pay-Off Debt at the Closing Date (such amount in (i), (ii) and (iii) being inclusive of any applicable break costs or expences), assuming such discharge, release and termination takes effect from the Closing Date.

 

Pay-Off Creditor. “Pay-Off Creditor” shall mean Nordea Bank Danmark A/S and any other related creditor or lienholder who is party to the Pay-Off Debt or any hedging, swap or similar arrangements related to the Pay-Off Debt,

 

Pay-Off Debt. "Pay-Off Debt" shall mean the credit line and any other Indebtedness owed by the Acquired Companies to Nordea Bank Danmark A/S and its affiliates.

 

Person. “Person” shall mean any individual, Entity or Governmental Body.

 

Pre-Closing Period. “Pre-Closing Period” shall mean the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to Section 9 or the Closing.

 

Purchase Price. “Purchase Price” shall mean as defined in Section 2.2(b)(ii).

 

Purchase Price Excess Amount. “Purchase Price Excess Amount” shall mean an amount, if a positive number, equal to: (A) the sum of (i) the Closing Cash Amount, and (ii) the Closing Accounts Receivable Amount, minus (B) the sum of (i) the Closing Indebtedness Amount, and (ii) the Closing Accounts Payable Amounts.

 

Purchase Price Shortfall Amount. “Purchase Price Shortfall Amount” shall mean an amount, if a positive number, equal to: (A) the sum of (i) the Closing Indebtedness Amount, and (ii) the Closing Accounts Payable Amounts, minus (B) the sum of (i) the Closing Cash Amount, and (ii) the Closing Accounts Receivable Amount.

 

Purpose. “Purpose” shall mean as defined in Section 6.6(a).

 

Registered IP. “Registered IP” shall mean all Company IP that is registered, filed, or issued under the authority of, with or by any Governmental Body, including all patents, registered copyrights and registered trademarks and all applications for any of the foregoing.

 

Related Party. “Related Party” shall mean: (a) each Selling Shareholder; (b) each individual who is or who has been at any time since inception of the respective Acquired Company, an officer or director of any such Acquired Company; (c) each member of the immediate family of each of the individuals referred to in clauses “(a)” and “(b)” above; (d) any trust or other Entity (other than an Acquired Company) in which any one of the Persons referred to in clauses “(a)” “(b)” and “(c)” above holds (or in which more than one of such Persons collectively hold), beneficially or otherwise, a material voting, proprietary or equity interest.

 

Representatives. “Representatives” shall mean officers, directors, employees, agents, attorneys, accountants, advisors and representatives.

 

Revenues. “Revenues” shall mean gross proceeds received from the sale, licensing or distribution of the Company Products to a non affiliated third party.

 

Subsidiary. An Entity shall be deemed to be a “Subsidiary” of another Person if such Person directly or indirectly owns or purports to own, beneficially or of record: (a) an amount of voting securities of or other interests in such Entity that is sufficient to enable such Person to elect at least a majority of the members of such Entity’s board of directors or other governing body; or (b) at least 50% of the outstanding equity, voting, beneficial or financial interests in such Entity.

 

  

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Tax. “Tax” includes all forms of taxation and statutory, governmental, supra-governmental, state, principal, local government or municipal impositions, duties, contributions, charges and levies, whenever imposed, and all penalties, charges, surcharges, costs, expenses and interest relating thereto and without limitation all employment taxes and any deductions or withholdings of any sort regardless of whether any such taxes, impositions, duties, contributions, charges and levies are chargeable directly or primarily against or attributable directly or primarily to any Acquired Company, or any other person and of any amount in respect of any of them is recoverable from any other person.

 

Tax Return. “Tax Return” shall mean any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Legal Requirement relating to any Tax.

 

Termination Without Cause. “Termination Without Cause” shall mean termination of a Founder's employment by the Company or the Purchaser (or any other company within the Purchaser group) for any reason other than as a result of the Founder's material breach of his employment agreement.

 

US GAAP. "US GAAP" shall mean generally accepted accounting principles in the United States of America.

 

1.2.         General Terms - the definitions in Section 1.1 shall apply equally to both the singular and plural forms of the terms defined. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The use of the word “or” shall not be exclusive. The word "Agreement" shall include all schedules and exhibits hereto unless the context otherwise requires. The words “herein”, “hereof” and “hereunder” and words of similar import refer to this Agreement (including the Exhibits and Schedules to this Agreement) in its entirety and not to any part hereof unless the context shall otherwise require. All references herein to Sections, Exhibits and Schedules shall be deemed references to Sections of, and Exhibits and Schedules to, this Agreement unless the context shall otherwise require. Any reference in this Agreement to a “day” or a number of “days” (without explicit reference to “Business Days”) shall be interpreted as a reference to a calendar day or number of calendar days.

 

1.3.         Currency.

 

(a)              All references in this Agreement to “dollars” or “$” shall mean United States Dollars.

 

(b)              Currency conversions with respect to calculation of the trade accounts receivable amounts which are reflected in the Closing Balance Sheets will be done according to the following rules:

 

(i) invoices in dollars will not be converted into another currency.

 

(ii) invoices in EUR, DKK and other non dollar invoices will be converted into dollars according to the applicable exchange rate on the Closing Date. 

 

	
2.

	
Description of Transaction

 

2.1.         Purchase and Sale of Company Shares. At the Closing (as defined below), upon the terms and subject to the conditions set forth in this Agreement, the Selling Shareholders shall sell, transfer and deliver to Purchaser all of the issued and outstanding Company Shares held by the Selling Shareholders as of immediately prior to the Closing, free and clear of all Encumbrances and with the benefit of all rights of whatsoever nature attaching or accruing to such Company Shares, including rights to any dividends and distributions declared, paid or made in respect of such Company Shares on or after the date of this Agreement, and Purchaser will purchase such Company Shares from the Selling Shareholders, on the terms and subject to the conditions set forth in this Agreement.

 

  

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2.2.         Purchase Price.

 

(a)              Closing Payment. As consideration for the Company Shares, at the Closing the Purchaser shall pay the Closing Payment to the Selling Shareholders. The Closing Payment shall be paid in cash by wire transfer into the account designated by the Selling Shareholders as set forth on Exhibit A attached hereto, which Exhibit A shall also include the allocation of the Closing Payment among the Selling Shareholders.

 

(b)              Earn-out Payment. As further consideration for the Company Shares, following the Closing the Selling Shareholders shall be eligible to the following payments:

 

  (i)      if the Company’s Revenues during the Evaluation Period exceed $10,000,000 (converting non US$ amounts into US$ as of the date of the invoice relating to such Revenue amount) (such excess amount, the “Excess Amount”), then, the Selling Shareholders shall receive a payment equal to twice the Excess Amount (the “Excess Payment”). 90% of the Excess Payment will be paid to the Selling Shareholders in cash by wire transfer into the account designated by them and as per the allocation as set forth on Exhibit A within 30 days of finalizing the Acquired Companies' audited financial statements.  Any invoiced sale, licensing or distribution of Company Products delivered in the ordinary course of business during the Evaluation Period which has not lead to gross proceeds received by the Acquired Companies within the Evaluation Period, but which are received subsequent to the Evaluation Period, shall entitle the Selling Shareholders to receive from the Purchaser an amount corresponding to a proportionate increase of the Excess Payment based on such additional received payments. The remaining 10% of the Excess Payment will be paid to the Selling Shareholders by way of a grant of stock options of the Purchaser within 30 days of finalizing the Purchaser’s audited financial statements directly to the Founders as per the allocation as set forth on Exhibit A. Such stock options will be valued based on the fair market value of such stock options on the date of their grant according to the B&S model, will vest in three equal tranches over 3 years, with the first tranche vesting one year following the Evaluation Date, and will have an exercise price equal to (rounded to nearest 1/100) the closing trading price of the Purchaser’s Ordinary Shares on the Nasdaq Stock Exchange on the date of their grant;

 

  (ii)      for every design win achieved from the date of the Closing until the Evaluation Date with expected Revenues of more than $1,000,000 per year, the Selling Shareholders will receive $1,000,000 (the “Design Win Payment” and together with the Closing Payment and the Excess Payment, the “Purchase Price”), 90% of which will be paid in cash by wire transfer into the account designated by them and as per the allocation among them as set forth on Exhibit A and the remainder will be paid to the Selling Shareholders by way of a grant of stock options of the Purchaser directly to the Founders as per the allocation as set forth on Exhibit A. Such stock options will be valued based on the fair market value of such stock options on the date of their grant according to the B&S model, will vest in three equal tranches over 3 years, with the first tranche vesting one year following the date of the first anniversary of Closing, and will have an exercise price equal to (rounded to nearest 1/100) the closing trading price of the Purchaser’s Ordinary Shares on the Nasdaq Stock Exchange on the date of their grant. The determination of whether any design win has been achieved shall be made on or about the date of the first anniversary of Closing in the joint discretion of Shaike Orbach and Nikolaj Hermann, and will require their joint approval. To the extent that Shaike Orbach and Nikolaj Hermann are not able to come to a determination for any reason, the Purchaser and the Selling Shareholders shall discuss and agree on the matter.

 

  

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  (iii)     All stock options granted in connection with the transactions contemplated hereby shall be granted under the Purchaser’s standard employee option plans.

 

(c)              Escrow.  Notwithstanding anything to the contrary contained in Section 2.2 or elsewhere in this Agreement, an aggregate of $3,000,000 (the “Escrow Amount”) shall be withheld from the portion of the Closing Payment otherwise payable to the Selling Shareholders pursuant to Section 2.2(a), on a pro rata basis and, on the Closing Date, deposited into an escrow account (the “Escrow Account”), to be held and distributed by the escrow agent to be selected by the Parties (such Person, the “Escrow Agent”) in accordance with the terms of this Agreement and an Escrow Agreement substantially in the form of Exhibit B (the “Escrow Agreement”).

 

2.3.         Closing. The consummation of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Yigal Arnon & Co. 1 Azrieli Center, Tel Aviv 6702101, Israel on December 10, 2015 and no later than three Business Days later  subject to all of the conditions to the Closing set forth in Sections 7 and 8 having been satisfied or waived by the party entitled to waive the same (other than those conditions which, by their terms, are to be satisfied or waived at the Closing), or at such other time and date as Purchaser and the Selling Shareholders may jointly designate. The date on which the Closing actually takes place is referred to in this Agreement as the “Closing Date”.

 

2.4.         All proceedings, actions and occurrences required to have taken place and all documents required to be executed and delivered by the parties at the Closing will be deemed to have been taken and executed simultaneously and no such proceedings, actions or occurrences will be deemed to have been taken nor such documents executed or delivered until all have been taken, executed and delivered (unless waived in writing by the relevant party for whose benefit such action should have been completed or such document or certificate should have been delivered).

 

	
3.

	
Representations and Warranties Relating to Selling Shareholders.

 

Neither Selling Shareholder is making any other representations or warranties except as expressly set out in Sections 3 and 4 hereof.

 

Each of the Selling Shareholders hereby severally and not jointly represents and warrants to the Purchaser as follows:

 

3.1.         Execution, Delivery; Valid and Binding Agreements. This Agreement and each other agreement, document or instrument referred to in or contemplated by this Agreement to be executed by the Selling Shareholders has been duly executed and delivered by them, and assuming that this Agreement and any other agreement, document or instrument referred to in or contemplated by this Agreement have been duly executed and delivered by the other parties hereto and thereto, constitute, or, when executed by the other parties hereto and thereto, will constitute, valid and binding agreements of the Selling Shareholders, enforceable against them in accordance with their terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other laws from time to time in effect relating to creditors’ rights and remedies generally and general principles of equity.

 

3.2.         Authority. The Selling Shareholders have the absolute and unrestricted right, power, capacity and authority to perform their obligations under this Agreement and under any other agreement, document or instrument referred to in, or contemplated by, this Agreement to which a Selling Shareholder is or will be a party; and the performance by such Selling Shareholder of its obligations hereunder and thereunder (including all right, power, capacity and authority to sell, transfer, convey and surrender its Company Shares as provided for by this Agreement) has been duly authorized by all necessary action on the part of such Selling Shareholder.

 

  

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3.3.         Non−Contravention; No Consents or Approvals. Neither: the execution, delivery or performance of this Agreement or any of the other agreements, documents or instruments referred to in this Agreement; nor any of the transactions contemplated thereby, will (with or without notice or lapse of time):

 

(a)              contravene, conflict with or result in a violation of, or give any Governmental Body or other Person the right to challenge any of the transactions contemplated by this Agreement or to exercise any remedy or obtain any relief under any Legal Requirement or any order, writ, injunction, judgment or decree to which such Selling Shareholder is subject; or

 

(b)              contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any Contract to which such Selling Shareholder is a party or by which such Selling Shareholder is bound.

 

The Selling Shareholders are not (nor will the Selling Shareholders be) required to make any filing with or give any notice to, or to obtain any Consent from any Person in connection with: (x) the performance of this Agreement or any of the other agreements, documents or instruments referred to in this Agreement; or (y) any of the transactions contemplated by this Agreement or by any of the other agreements, documents or instruments referred to in this Agreement.

 

3.4.         Title and Ownership. The Selling Shareholders are the record and beneficial owner of the Company Shares set forth opposite such Selling Shareholder’s name in Part 3.4 of the Disclosure Schedule, and each such Selling Shareholder has good, valid and marketable title to such Company Shares, free and clear of all Encumbrances. The Selling Shareholders are not a party to any option, warrant, purchase right or other Contract that could require them to sell, transfer or otherwise dispose of any Company Shares (other than pursuant to this Agreement). The Selling Shareholders are not a party to any voting trust, proxy or other agreement or understanding with respect to the voting of any Company Shares. Upon payment of the portion of the Closing Payment payable to Selling Shareholders pursuant to Section 2.2(a) (subject to any applicable withholding), the Selling Shareholders shall transfer to Purchaser good, valid and marketable title to the Company Shares held by them, free and clear of all Encumbrances.

 

3.5.         Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with any of the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Selling Shareholders.

 

	
4.

	
Representations and Warranties Relating to the Acquired Companies

 

The Selling Shareholders hereby represent and warrant, as follows:

 

4.1.         Due Organization; Qualification; Etc.

 

(a)              Organization. Each Acquired Company has been duly organized, and is validly existing and in good standing (to the extent that the Legal Requirements of the jurisdiction of its formation recognize the concept of good standing), under the Legal Requirements of the jurisdiction of its formation. Each Acquired Company has full power and authority: (i) to conduct its business in the manner in which its business is currently being conducted; (ii) to own and use its assets in the manner in which its assets are currently owned and used; and (iii) to perform its obligations under all Contracts to which it is a party or by which it is bound.

 

(b)              Qualification. Each Acquired Company is qualified, licensed or admitted to do business as a foreign corporation, and is in good standing (or its equivalent), under the laws of all jurisdictions where the property owned, leased or operated by it or the nature of its business requires such qualification, license or admission. Part 4.1(b) of the Disclosure Schedule accurately sets forth each jurisdiction where the Acquired Companies are qualified, licensed and admitted to do business.

 

  

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(c)              Directors and Officers. Part 4.1(c) of the Disclosure Schedule accurately sets forth: (i) the names of the members of the board of directors (or similar body) of each Acquired Company; (ii) the names of the members of each committee of the board of directors (or similar body) of each Acquired Company and (iii) the names and titles of the officers and managers of each Acquired Company.

 

(d)              Subsidiaries. Except as set forth in Part 4.1(d) of the Disclosure Schedule, no Acquired Company owns or has ever owned, beneficially or otherwise, any shares or other securities of, or any direct or indirect equity interest in, any Entity, and is not a participant in, nor does it hold any interest in any partnership, joint venture or other business entity, association or organization. No Acquired Company has agreed or is obligated to make any future investment in or capital contribution to any Entity. No Acquired Company has guaranteed or is responsible or liable for any obligation of any Person. Each of the Acquired Companies are wholly owned either directly or indirectly by the Selling Shareholders.

 

(e)              Business Name. Except as set forth in Part 4.1(e) of the Disclosure Schedule, none of the Acquired Companies has conducted any business under or otherwise used, for any purpose or in any jurisdiction, any fictitious name, assumed name, business name or other name, other than its respective corporate name and secondary names as set forth in this Agreement.

 

4.2.         Charter Documents; Records. The Company has Made Available to Purchaser accurate and complete copies of: (a) Charter Documents; and (b) the minutes and other records of the meetings and other proceedings (including any actions taken by written consent or otherwise without a meeting) of the shareholders or the board of directors (or similar body) of each Acquired Company, which minutes or other records contain a complete summary of all meetings of the board of directors (or similar body) and shareholders, and all actions taken thereat or by written consent. All actions taken and all transactions entered into by each Acquired Company which required the approval or consent of its board of directors or shareholders have been duly approved by all necessary action of the board of directors and shareholders of such Acquired Company. There has been no violation of any of the provisions of the Charter Documents, and no Acquired Company has taken any action that is inconsistent in any material respect with any resolution adopted by such Acquired Company’s shareholders or board of directors (or similar body). The books of account, share records, minute books and other records of each Acquired Company are accurate, up-to-date and complete in all material respects, and have been maintained in all material respects in accordance with prudent business practices and all applicable Legal Requirements.

 

4.3.         Capitalization.

 

(a)              Outstanding Securities. The authorized share capital of the Company is DKK 500,000.00, and consists of 500,000 Ordinary Shares, all of which are issued and outstanding as of the date hereof. There are no Ordinary Shares held in the Company’s treasury or held by the Company as dormant shares. Except as set forth in Part 4.3(a) of the Disclosure Schedule, the Company has never declared or paid any dividends on any Company Shares. Part 3.4 of the Disclosure Schedule of the Disclosure Schedule sets forth the names of the Company’s shareholders, the addresses of the Company’s shareholders, the number, class and series of shares of Company Shares owned of record by each of such shareholders. There are no contractual restrictions on the Company Shares and they are unrestricted Ordinary Shares. All outstanding Company Shares have been duly authorized and validly issued, are fully paid and non-assessable, and none of such shares are subject to preemptive rights, repurchase option, forfeiture provision, rights of first refusal or restriction on transfer created by statute (other than restrictions on transfer imposed by virtue of applicable securities laws), the Charter Documents, or any agreement to which the Company is a party or by which it is bound. There are no Company securities or rights convertible into Company securities (including Company Options) other than the Company Shares. Neither the Company nor its shareholders have entered into any shareholder agreement or other agreement, and the Company Shares and the rights applicable thereto are not otherwise the subject of any agreement.

 

  

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(b)              Legal Issuance. All outstanding Company Shares and all other securities that have ever been issued or granted by the Company have been issued and granted in compliance with: (i) all applicable securities laws and other applicable Legal Requirements; (ii) the Company's Charter Documents, and (iii) all requirements set forth in all applicable Contracts. No Ordinary Shares were issued in violation of any preemptive rights or other rights to subscribe for or purchase securities of the Company. There are no Acquired Company Contracts relating to any securities of the Company that contain any information rights, registration rights, financial statement requirements or other terms that would survive the Closing unless terminated or amended prior to the Closing. No Acquired Company has ever repurchased, redeemed or otherwise reacquired any shares in its share capital or other securities.

 

(c)              Stock Options. None of the Acquired Companies has ever adopted, sponsored or maintained any stock option plan or any other plan or agreement providing for equity-related compensation to any person (whether payable in shares, cash or otherwise). The Company has not granted or promised to grant any Company Options.

 

(d)              Debt. No bonds, debentures, notes or other Indebtedness of the Acquired Companies: (i) having the right to vote on any matters on which shareholders may vote (or which is convertible into, or exchangeable for, securities having such right), or (ii) the value of which is in any way based upon or derived from capital or voting shares of the Company, are issued or outstanding as of the date hereof.

 

(e)              No Other Securities. There are no options, warrants, calls, rights, convertible securities, commitments or agreements of any character, written or oral, to which any Acquired Company is a party or by which the Company is bound obligating the Company to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any Company Shares (or any other securities of the Company) or obligating the Company to grant, extend, accelerate the vesting of, change the price of, otherwise amend or enter into any such option, warrant, call, right, commitment or agreement. There are no outstanding or authorized share appreciation, phantom share, profit participation, or other similar rights with respect to the Acquired Companies. There are no voting trusts, proxies, or other agreements or understandings with respect to the voting shares of any of the Acquired Companies, and there are no agreements to which any Acquired Company is a party relating to the registration, sale or transfer (including agreements relating to rights of first refusal, co-sale rights or “drag-along” rights) of any Company Shares. As a result of the transactions contemplated by this Agreement, as of the Closing, Purchaser will be the sole record and beneficial holder of all issued and outstanding Company Shares and all rights to acquire or receive any Company Shares, whether or not such Company Shares are outstanding.

 

(f)               No share certificates. The Company had not delivered, and no holder of issued and outstanding Company Shares has received, a share certificate representing such shares.

 

4.4.         Financial Statements and Related Information.

 

(a)              Delivery of Company Financial Statements. The Selling Shareholders  have Made Available to the Purchaser the Company Financial Statements.

 

(b)              Delivery of Certificate for Settling the Pay-Off Debt. The Selling Shareholders  have delivered to the Purchaser certificates from each Pay-Off Creditor, containing, in each case the amounts and currency required to effect full repayment of each respective component of the Pay-Off Amounts and the wire transfer information of the Pay-Off Creditors.

 

  

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(c)              Delivery of Estimated Closing Consideration Certificate. The Selling Shareholders have delivered to the Purchaser by the date hereof a certificate (the “Estimated Closing Consideration Certificate”) setting forth the Company’s good faith estimates of the following information (such information being referred to collectively as the “Closing Consideration Certificate Data”) based on the Interim Balance Sheets, subject to the Estimated Closing Certificate Data being (i) best estimates and (ii) non audited, which shall be set forth on an accompanying spreadsheet:

 

	 	
(i)

	
the Closing Payment;

 

	 	
(ii)

	
the Closing Indebtedness Amount;

 

	 	
(iii)

	
the Closing Cash Amount;

 

	
(iv)

	
the Closing Accounts Receivables Amount;

 

	 	
(v)

	
the Closing Accounts Payable Amount, and

 

	 	
(vi)

	
the Purchase Price Excess Amount or the Purchase Price Shortfall Amount, as applicable;

 

The spreadsheet accompanying the Estimated Closing Consideration Certificate shall show with detailed specificity the basis for the calculation of each element of the Closing Consideration Certificate Data.

 

(d)              Fair Presentation. The Company Financial Statements are true and complete in all material respects and present fairly the financial position of the Acquired Companies as of the respective dates thereof and the results of operations of the Acquired Companies for the periods covered thereby. The Company Financial Statements have been prepared in accordance with GAAP (it being understood, that the Company Financial Statements related to Fiberblaze US LLC have been prepared in accordance with US GAAP) applied on a consistent basis throughout the periods covered.

 

(e)              Nothing in Section 4.4 shall be deemed to be a representation or warranty by the Selling Shareholders in respect of any information on a forward looking nature, including forecast, budgets, prospects etc.

 

4.5.         Liabilities.

 

(a)              No Liabilities. No Acquired Company has any accrued, contingent or other Liabilities of any nature, either matured or unmatured (whether or not required to be reflected in financial statements in accordance with GAAP, and whether due or to become due), except for: (i) Liabilities identified as such in the “liabilities” column of the solo audited balance sheets of each of the Acquired Companies as of 31 August 2014; (ii) Liabilities that have been incurred by each Acquired Company since the solo audited balance sheets of each of the Acquired Companies as of 31 August 2014 in the ordinary course of business and consistent with such Acquired Company’s past practices; and (iii) the Liabilities identified in Part 4.5(a) of the Disclosure Schedule, which schedule shall also list all material Liabilities relating to obligations of the Acquired Companies to purchase services or products, even if such purchases are incurred in the ordinary course.

 

(b)              Indebtedness. Part 4.5(b) of the Disclosure Schedule sets forth an accurate and complete list of all Indebtedness of the Acquired Companies as of the date of this Agreement.

 

(c)              No “Off-Balance Sheet” Arrangements. The Company is and always has been run in the ordinary course of business. No Acquired Company has ever effected or otherwise been involved in any “off-balance sheet arrangements”. Without limiting the generality of the foregoing, no Acquired Company has ever guaranteed any debt or other obligation of any other Person.

 

  

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(d)              Director and Officer Indemnification. No event has occurred, and no circumstance or condition exists, that has resulted in, or that will or would reasonably be expected to result in, any claim for indemnification, reimbursement, contribution or the advancement of expenses by any current or former Acquired Company Employee (other than a claim for reimbursement by the Company, in the ordinary course of business, of travel expenses or other out-of-pocket expenses of a routine nature incurred by such current or former Acquired Company Employee in the course of performing its duties for the Company) or any agent of any Acquired Company pursuant to: (i) the terms of the Charter Documents of any Acquired Company; (ii) any indemnification agreement or other Contract between any Acquired Company and any such current or former Acquired Company Employee or agent; or (iii) any applicable Legal Requirement.

 

(e)              Claims by Securityholders. No event has occurred, and no circumstance or condition exists, that has resulted in, or that will or would reasonably be expected to result in, any Liability of any Acquired Company to any current, former or alleged securityholder of any Acquired Company in such Person’s capacity (or alleged capacity) as a securityholder of such Acquired Company.

 

(f)              Insider Receivables. Part 4.5(f) of the Disclosure Schedule provides an accurate and complete breakdown of all amounts (including any Indebtedness) owed to any Acquired Company by any Acquired Company Employee or shareholder of the Company as of the date of this Agreement.

 

4.6.         Absence of Changes. Since the date of the solo audited balance sheets of each of the Acquired Companies as of 31 August 2014:

 

(a)             there has not been any Material Adverse Effect, and no event has occurred or circumstance has arisen that, in combination with any other events or circumstances, will or could reasonably be expected to have or result in a Material Adverse Effect;

 

(b)             there has not been any material loss, damage or destruction to, or any material interruption in the use of, any of the Acquired Companies’ material assets (whether or not covered by insurance); and

 

(c)             none of the Acquired Companies has taken any action that would have been prohibited or otherwise restricted under Sub-Sections 6.1(a), 6.1(d), 6.1(e), 6.1(f), 6.1(g), 6.1(m), 6.1(o), or 6.1(p) hereof, had such action been taken during the Pre-Closing Period.

 

4.7.         Title to Assets.

 

(a)              Good Title. Each of the Acquired Companies owns, and has good and valid title to, all assets purported to be owned by it, including: (i) all assets reflected on the Interim Balance Sheets; (ii) all Intellectual Property assets and all of the rights of the Acquired Companies under the Acquired Company Contracts; and (iii) all other assets reflected in the books and records of the Acquired Companies as being owned by such Acquired Company. Except as set forth in Part 4.7(a) of the Disclosure Schedule, all such assets are owned by the Acquired Companies free and clear of any Encumbrances.

 

(b)              Leased Assets. Part 4.7(b) of the Disclosure Schedule identifies all assets of the Acquired Companies that are being leased to any of the Acquired Companies and the location of each such leased assets.

 

(c)              Sufficiency of Assets. The assets of the Acquired Companies collectively constitute all of the properties, rights, interests and other tangible and intangible assets used in or necessary to enable each Acquired Company to conduct its business in the manner in which such business is currently being conducted.

 

4.8.         Receivables; Products; Customers and Suppliers.

 

(a)             All existing accounts receivable of the Acquired Companies reflected on the Company Financial Statements that have not yet been collected represent valid obligations of customers arising from bona fide transactions entered into in the ordinary course of business. None of their customers have notified the Acquired Companies that any of such accounts receivable will not be paid.

 

  

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(b)             No Acquired Company has, as of the Closing Date and during the period starting 6 months prior to the date hereof, received any notice from any material customer stating that any such customer plans to cease dealing with the applicable Acquired Company or may otherwise materially reduce the volume of business transacted by such customer with the applicable Acquired Company.

 

(c)             Each of the Acquired Companies has as of the date of this Agreement timely paid in full all amounts owed to their respective suppliers and service providers.

 

(d)             No Acquired Company has, as of the Closing Date and during the period starting 12 months prior to the date hereof, received any notice from any material supplier indicating that it plans to cease dealing with the Acquired Companies or otherwise materially reduce the volume of business transacted by such supplier with the Acquired Companies.

 

4.9.         Bank Accounts. Part 4.9 of the Disclosure Schedule provides the following information with respect to each account maintained by or for the benefit of the Acquired Companies at any bank or other financial institution: (a) the name of the bank or other financial institution at which such account is maintained; (b) the account number; (c) the type of account; (d) account balance as of the Business Day immediately prior to the date hereof; and (e) the names of all Persons who are authorized to sign checks or other documents or effect other transactions with respect to such account.

 

4.10.       Intellectual Property.

 

(a)              Intellectual Property Disclosures. Part 4.10(a) of the Disclosure Schedule accurately identifies and describes:

 

(i)            in Part 4.10(a)(i) of the Disclosure Schedule, each Company Product, including a detailed description about such Company Product, including its performance and features;

 

(ii)          The Acquired Companies do not have or purport to have an ownership interest of any nature (whether exclusively, jointly with another Person or otherwise) in any Registered IP;

 

(iii)         in Part 4.10(a)(iii) of the Disclosure Schedule: (A) all Intellectual Property Rights or Intellectual Property licensed to any Acquired Company (other than Open Source Code that is identified in Part 4.10(i) of the Disclosure Schedule and any non-customized software that is generally available on standard terms for less than $5,000 per copy, seat or user, as applicable); (B) the corresponding Contract or Contracts pursuant to which such Intellectual Property Rights or Intellectual Property is licensed to such Acquired Company; (C) whether the license or licenses so granted to such Acquired Company are exclusive or nonexclusive; and (D) each Company Product in which such licensed Intellectual Property Rights or Intellectual Property are used or incorporated;

 

(iv)          in Part 4.10(a)(iv) of the Disclosure Schedule, each Contract pursuant to which any Person has been granted any license under, or otherwise has received or acquired any right (whether or not currently exercisable) or interest in, any Company IP and whether such license is exclusive or non-exclusive; and

 

(v)           in Part 4.10(a)(v) of the Disclosure Schedule, a list of each item of Company Software that is distributed by any Acquired Company to third parties.

 

(b)              IP Agreements. The Company has Made Available to Purchaser a complete and accurate copy of each Company IP Contract used by any Acquired Company at any time, including each: (i) end user license and/or service agreement; (ii) development agreement; (iii) distributor or reseller agreement; (iv) agreement, whether with an employee, consultant, other person in the creation or development of any Company IP, or otherwise, containing any assignment or license of Intellectual Property or Intellectual Property Rights or any confidentiality provision; (v) professional services, outsourced development, consulting, or independent contractor agreement containing any assignment or license of Intellectual Property or Intellectual Property Rights or any confidentiality provision; or (vi) confidentiality or nondisclosure agreement.

 

  

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(c)              Ownership Free and Clear.The Acquired Companies exclusively own all right, title and interest to and in the Company IP (other than Intellectual Property Rights or Intellectual Property licensed to such Acquired Company, as identified in Part 4.10(a)(iii) of the Disclosure Schedule) free and clear of any Encumbrances (other than nonexclusive licenses granted pursuant to the Contracts listed in Part 4.10(a)(iv) of the Disclosure Schedule), and such Company IP is valid, subsisting and enforceable. Without limiting the generality of the foregoing:

 

(i)   To the Selling Shareholders' Knowledge, no Key Employee, or other Acquired Company Employee is: (A) bound by or otherwise subject to any Contract restricting them from performing their duties for an Acquired Company, or (B) affiliated with any Governmental Body or any public or private university, college, or other educational, medical or research institution;

 

(ii)          no funding, facilities or personnel of any Governmental Body or any public or private university, college, or other educational, medical or research institution, was used, directly or indirectly, to create or develop, in whole or in part, any Company IP; no Company IP was created with any involvement or contribution by any current or former director, officer, or independent contractor of or consultant who held any position with any Governmental Body, foundation or any public or private university, college, or other educational, medical or research institution.

 

(iii)         each of the Acquired Companies has taken reasonable steps to maintain the (A) validity and enforceability of all Intellectual Property Rights owned by or exclusively licensed to the Company and (B) confidentiality of and otherwise protect and enforce its rights in all proprietary information held by such entity, or purported to be held by such entity, as a trade secret;

 

(iv)          no Acquired Company has ever assigned or otherwise transferred ownership of, or agreed to assign or otherwise transfer ownership of, any Intellectual Property Right to any other Person, except in the ordinary course of business;

 

(v)            no Acquired Company is currently, or has ever been, a member or promoter of, or a contributor to, any industry standards body or similar organization that could require or obligate any Acquired Company to grant or offer to any other Person any license or right to any Company IP; No Acquired Company is subject to any license or other Contract with, any standards bodies or other entities for a determination of essentiality to or inclusion in an industry standard or that would obligate any Acquired Company to grant licenses or other rights to, or otherwise impair its control of, any Intellectual Property, nor has any third-party request been made for such licenses or other rights in connection with the activities of or any participation in any forum, consortium, standards body, or similar entity.

 

(vi)          each of the Acquired Companies owns or otherwise has all Intellectual Property Rights needed to conduct the business of such entity as currently conducted and such Intellectual Property Rights shall not be adversely impacted by the Closing; and

 

(vii)         none of the Acquired Companies is bound by, and no Company IP is subject to, any Contract containing any covenant or other provision that in any way limits or restricts the ability of any Acquired Company to use, exploit, assert, or enforce any Company IP anywhere in the world.

 

(d)              No Intellectual Property or product or service of any Acquired Company is subject to any order, action, settlement, or other right that restricts, or that could reasonably be expected to restrict, in any manner the current use, transfer or licensing of any Company IP.

 

  

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(e)              Effects of This Transaction. Neither the execution, delivery or performance of this Agreement or any other agreements referred to in this Agreement nor the consummation of any of the transactions contemplated by this Agreement or any such other agreement will, with or without notice or the lapse of time, result in or give any other Person the right or option to cause or declare: (i) a loss of, or Encumbrance on, any Company IP; (ii) a breach or right of termination of any Company IP Contract; (iii) other than as identified in Part 4.10(e) of the Disclosure Schedule, the release, disclosure or delivery of any Company IP by or to any escrow agent or other Person; (iv) the grant, assignment or transfer to any other Person of any license or other right or interest under, to or in any of the Company IP (v) the grant of any right exclusivity, covenant not to sue, noncompetition or nonsolicitation or (vi) an obligation on any of the Acquired Companies to pay royalties under any Contract.

 

(f)               No Third Party Infringement of Company IP. To the Selling Shareholders' Knowledge, no Person has infringed, misappropriated, or otherwise violated, and no Person is currently infringing, misappropriating or otherwise violating, any Company IP.

 

(g)              No Infringement of Third Party IP Rights. No Acquired Company has ever infringed (directly, contributorily, by inducement or otherwise), misappropriated or otherwise violated any Intellectual Property Right of any other Person. Without limiting the generality of the foregoing:

 

(i)            no product, information or service ever manufactured, produced, distributed, licensed, published, used, provided or sold by or on behalf of any Acquired Company has ever infringed, misappropriated or otherwise violated any Intellectual Property Right of any other Person;

 

(ii)          no infringement, misappropriation or similar claim or legal proceeding is pending or has been threatened against any Acquired Company or against any other Person who may be entitled to be indemnified, defended, held harmless or reimbursed by any Acquired Company with respect to such claim or legal proceeding;

 

(iii)         no Acquired Company has ever received any notice or other communication (in writing or otherwise) relating to any actual, alleged or suspected infringement, misappropriation or violation of any Intellectual Property Right of another Person;

 

(iv)          no Acquired Company is bound by any Contract to indemnify, defend, hold harmless or reimburse any other Person with respect to any intellectual property infringement, misappropriation or similar claim;

 

(v)           no Acquired Company has ever assumed, or agreed to discharge or otherwise take responsibility for, any existing or potential liability of another Person for infringement, misappropriation or violation of any Intellectual Property Right; and

 

(vi)          to the Knowledge of the Selling Shareholders, no claim or legal proceeding involving any Intellectual Property or Intellectual Property Right licensed to any Acquired Company is pending or has been threatened, except for any such claim or legal proceeding that, if adversely determined, would not adversely affect: (A) the use or exploitation of such Intellectual Property or Intellectual Property Right by any Acquired Company; or (B) the creation, development, manufacturing, marketing, provision, distribution, licensing, or sale of any Company Product.

 

(h)              No Harmful Code. None of the Company Software contains any “back door,” “drop dead device,” “time bomb,” “Trojan horse,” “virus,” or “worm” (as such terms are commonly understood in the software industry) or any other code designed or intended to have, or capable of performing, any of the following functions: (i) disrupting, disabling, harming or otherwise impeding in any manner the operation of, or providing unauthorized access to, a computer system or network or other device on which such code is stored or installed; or (ii) damaging or destroying any data or file without the user’s consent.

 

  

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(i)               Use of Open Source Code.

 

(i)   Part 4.10(i) of the Disclosure Schedule accurately identifies and describes: (A) each item of Open Source Code that is contained in, distributed with or used in the development of any Company Software or from which any part of any Company Software is derived; (B) the applicable license terms for each such item of Open Source Code; and (C) the Company Software to which each such item of Open Source Code relates.

 

(ii)   No Acquired Company has used, modified, or distributed any Open Source Code in a manner that: (A) could or does require (or could or does condition the use or distribution of such software on) (1) the disclosure, licensing or distribution of any source code for, or (2) the licensing for purposes of making modifications or derivative works of, any Company Software owned by or licensed to any Acquired Company; (B) could or does require (or could or does condition the use or distribution of such software on) the granting of a license under any Acquired Company patent rights; or (C) could or does otherwise impose any material limitation, restriction or condition on the right or ability of any Acquired Company to use or distribute any Company Software owned by or licensed to any Acquired Company.

 

(iii)          Each of the Acquired Companies has complied with all of, and the use, marketing, distribution, licensing, and sale of Company Software does not violate any of, the terms and conditions of each applicable Open Source License, including all requirements pertaining to attribution and copyright notices.

 

(j)               No License of Source Code. Except as set forth in Part 4.10(j) of the Disclosure Schedule, no source code for any Company Software has been delivered, licensed or made available to any escrow agent or other Person. No Acquired Company has any duty or obligation (whether present, contingent or otherwise) to deliver, license or make available the source code for any Company Software to any escrow agent or other Person. No event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will, or could reasonably be expected to, result in the delivery, license or disclosure of any source code for any Company Software to any Person.

 

(k)              Except for bugs and defects experienced in the ordinary course of business, all Company Software performs in all material respects in conformance with the purposes and functionality for which it is intended.  No Acquired Company Contract requires any Acquired Company to maintain a disaster recovery plan to safeguard its customers’ information in the event of a disaster. All Acquired Companies have made back-ups of all material software and data that cannot be easily recreated or restored, and has arranged for such back-ups at a reasonable secure location.

 

(l)               Data Privacy.  In connection with its collection, processing, storage, transfer (including, without limitation, any transfer across national borders) and/or use of any personally identifiable information from any individuals, including, without limitation, any customers, prospective customers, employees and/or other third parties (collectively “Personal Information”), the Acquired Companies  are and have been in compliance with all applicable laws in all relevant jurisdictions, the Company’s and its Subsidiaries’ privacy policies and the requirements of any contract or codes of conduct to which they are a party and this Agreement does not detrimentally affect such legal and permitted use of such Personal Information. The Acquired Companies  have at all times implemented commercially reasonable physical, technical, organizational and administrative security measures and policies to protect all Personal Information collected by them or on their behalf from and against loss, unauthorized access, use and/or disclosure and there has been no loss, unauthorized access, use and/or disclosure of such Personal Information. The Acquired Companies  are and have been in compliance in all material respects with all laws relating to data loss, theft and breach of security notification obligations. There is no complaint to, or any audit, proceeding, investigation (formal or informal) or claim currently pending against, any Acquired Company, by any private party or any governmental body, foreign or domestic, with respect to Personal Information.

 

  

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4.11.       Agreements, Contracts and Commitments.

 

(a)              List of Contracts. Part 4.11(a) of the Disclosure Schedule identifies, in each subpart that corresponds to the subsection listed below, any Contract entered into up to the date hereof, (x) to which any Acquired Company or a Selling Shareholder (with respect to clause  (xiii) hereunder) is a party, (y) by which any of the Acquired Companies or any of their assets is or may become bound or under which any Acquired Company has, or may become subject to, any obligation, or (z) under which any Acquired Company has or may acquire any right or interest:

 

(i)   with one of the Acquired Company’s customers;

 

(ii)          pursuant to which any Acquired Company has been appointed a partner, reseller or distributor;

 

(iii)         pursuant to which any Acquired Company has appointed another Person as a partner, reseller, or distributor;

 

(iv)          that is with any Acquired Company’s suppliers by spending during the last calendar year or the first 3 months of the current calendar year;

 

(v)   imposing any restriction on the right or ability of any Acquired Company: (A) to compete with any other Person; (B) to acquire any product or other asset or any services from any other Person, to sell any product or other asset to or perform any services for any other Person or to transact business or deal in any other manner with any other Person; or (C) to develop or distribute any technology;

 

(vi)          that is an Acquired Company Employee Plan or an Acquired Company Employee Agreement, including all indemnification agreements with current or former officers or directors;

 

(vii)         relating to the acquisition, transfer, use, development, sharing or license of any Intellectual Property or Intellectual Property Right, together with (A) the Intellectual Property or Intellectual Property Right that is the subject of such Contract; (B) whether the Intellectual Property or Intellectual Property Right is being licensed to or acquired by any Acquired Company, or licensed to or acquired by another Person; and (C) the product or service of the applicable Acquired Company to which such Intellectual Property or Intellectual Property Right relates (other than (x) Open Source Licenses listed in Part 4.10(i) of the Disclosure Schedule and licenses for any non-customized software that is generally available on standard terms for less than $5,000 per copy, seat or user, as applicable; (y) Contracts identified in Part 4.10 of the Disclosure Schedule);

 

(viii)       relating to the acquisition, issuance or transfer of any securities;

 

(ix)          relating to the creation of any Encumbrance with respect to any asset of any Acquired Company;

 

(x)   involving or incorporating any guaranty (except for product warranties in the ordinary course of business), any pledge, any performance or completion bond, any indemnity or any surety arrangement;

 

(xi)          creating or relating to any partnership or joint venture or any sharing of revenues, profits, losses, costs or liabilities;

 

(xii)        Contracts identified or required to be identified in Part 4.10 of the Disclosure Schedule;

 

(xiii)       involving any Related Party;

 

  

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(xiv)        constituting or relating to any (A) prime contract, subcontract, letter contract, purchase order or delivery order executed or submitted to or on behalf of any Governmental Body or any prime contractor or higher-tier subcontractor, or under which any Governmental Body or any such prime contractor or subcontractor otherwise has or may acquire any right or interest, or (B) quotation, bid or proposal submitted to any Governmental Body or any proposed prime contractor or higher-tier subcontractor of any Governmental Body;

 

(xv)         that was entered into outside the ordinary course of business;

 

(xvi)        that has a term of more than 30 days and that may not be terminated by any Acquired Company (without penalty) within 30 days after the delivery of a termination notice by any Acquired Company, disregarding employment agreements; and

 

(xvii)       that contemplates or involves: (A) the payment or delivery of cash or other consideration in an amount or having a value in excess of $20,000 in the aggregate; or (B) the performance of services having a value in excess of $20,000 in the aggregate.

 

The Contracts in the respective categories described in clauses (i) through (xvii) above are referred to in this Agreement as “Material Contracts.”

 

(b)              Delivery of Contracts. The Company has Made Available to Purchaser accurate and complete copies of all written Contracts identified in Part 4.11(a) of the Disclosure Schedule, including all exhibits, addendums, attachments and amendments thereto. Part 4.11(a) of the Disclosure Schedule provides an accurate description of the terms of each Company Contract that is not in written form. To the Selling Shareholders' Knowledge, each Contract identified in Part 4.11(a) of the Disclosure Schedule is valid and in full force and effect and is enforceable by the Company in accordance with its terms, subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

 

(c)              No Breach.

 

(i)           no Acquired Company has violated or breached in any material respect, or committed any material default under, any material contract or any Contract otherwise described in Section 4.11(a) above, and, to the Selling Shareholders' Knowledge, no other Person has violated or breached, or committed any default under, any such Contract;

 

(ii)          To the Selling Shareholders' Knowledge, no event has occurred, and no circumstance or condition exists, that (with or without notice or lapse of time) will, or could reasonably be expected to: (A) result in a material violation or breach of any of the provisions of any such Contract; (B) give any Person the right to declare a default or exercise any remedy under any such Contract; (C) give any Person the right to accelerate the maturity or performance of any such Contract; or (D) give any Person the right to cancel, terminate or modify any Company Contract;

 

(iii)         no Acquired Company has received any notice or other communication regarding any actual or possible violation or breach of, or default under, any Contract described in Section 4.11(a) above; and

 

(iv)          no Acquired Company has waived any of its material rights under any Material Contract.

 

(d)              No Renegotiation. Except as in the ordinary course of business, no Person is renegotiating, or has a right pursuant to the terms of any Contract described in Section 4.11(a) above to renegotiate, any amount paid or payable to any Acquired Company under any Material Contract or any other material term or provision of any Material Contract. No Person has threatened to terminate or refuse to perform its obligations under any Contract described in Section 4.11(a) above (regardless of whether such Person has the right to do so under such Contract).

 

  

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(e)              Sufficiency of Disclosed Material Contracts. Other than the Material Contracts identified in Part 4.11(a) of the Disclosure Schedule no other Contracts are necessary to enable the Acquired Companies to conduct their respective businesses in substantially in the manner in which their businesses are currently being conducted.

 

(f)               Proposed Contracts. Part 4.11(f) of the Disclosure Schedule identifies and provides a brief description of each proposed material Contract outside the ordinary course of business as to which any bid, offer, award, written proposal, term sheet or similar document has been submitted or received by any Acquired Company since January 1, 2014.

 

4.12.       Compliance with Legal Requirements.

 

(a)              Each Acquired Company is, and has at all times been, in compliance in all material respects with each Legal Requirement that is applicable to it or to the conduct of its business or the ownership of its assets including Legal Requirements relating to money laundering, banking import/export and employment matters. To the Selling Shareholders' Knowledge, no event has occurred, and no condition or circumstance exists, that will (with or without notice or lapse of time) constitute or result in a violation by any Acquired Company of, or a failure on the part of any Acquired Company to comply with, any Legal Requirement. No Acquired Company has received any notice or other communication from any Person regarding any actual or possible violation of, or failure to comply with, any Legal Requirement.

 

4.13.       Governmental Authorizations; No Subsidies.

 

(a)              Governmental Authorizations. Part 4.13(a) of the Disclosure Schedule identifies, each Governmental Authorization held by the Acquired Companies, and the Company has Made Available to Purchaser accurate and complete copies of such Governmental Authorizations. Such Governmental Authorizations are valid and in full force and effect, and collectively constitute all Governmental Authorizations necessary to enable each Acquired Company to conduct its respective business in the manner in which such business is currently being conducted. Each Acquired Company is, and has at all times been, in material compliance with the terms and requirements of the respective Governmental Authorizations identified in Part 4.13(a) of the Disclosure Schedule. No Acquired Company has received any notice or other communication from any Governmental Body regarding: (i) any actual or possible violation of, or failure to comply with, any term or requirement of any Governmental Authorization; or (ii) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any Governmental Authorization.

 

(b)              Governmental Grants. Except as set forth in Part 4.13(b) of the Disclosure Schedule, none of the Acquired Companies has at any time received any Governmental Grant that has been available or applicable to any Acquired Company and no Governmental Body: (i) has awarded any participation or provided any support to the Company; or (ii) is or may become entitled to receive any royalties or other payments from any Acquired Company.

 

4.14.       Tax Matters.

 

(a)              Tax Returns and Payments. Other than as set forth on Part 4.14(a) of the Disclosure Schedule, all Tax Returns required to be filed by or on behalf of any Acquired Company have been timely and properly filed and are true, accurate and complete. All Taxes of the Acquired Companies that are due and payable have been timely and properly paid. All Taxes required to be withheld by the Acquired Companies have been properly and timely withheld and remitted. The Company has Made Available to Purchaser accurate and complete copies of all Tax Returns filed by any Acquired Company. Part 4.14(a) of the Disclosure Schedule lists each jurisdiction in which any Acquired Company is required to file a Tax Return. No claim has ever been made by an authority in a jurisdiction where an Acquired Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. The Company Financial Statements properly and adequately accrue or reserve for Tax Liabilities in accordance with GAAP. Except as set forth in Part 4.14(a) of the Disclosure Schedule, none of the Acquired Companies is subject to sales Tax, use Tax or value added Tax in any jurisdiction.

 

  

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(b)              Audits; Claims. Except as set forth in Part 4.14(b) of the Disclosure Schedule , no Tax Returns have ever been examined or audited by any Governmental Body. No Acquired Company has received from any Governmental Body any: (i) notice indicating an intent to open an audit or other review; (ii) request for information related to Tax matters; or (iii) notice of deficiency or proposed Tax adjustment. No extension or waiver of the limitation period applicable to any Tax Returns has been granted by or requested from any Acquired Company. No claim or Legal Proceeding is pending or threatened against any Acquired Company in respect of any Tax. There are no liens for Taxes upon any of the assets of any Acquired Company except liens for current Taxes not yet due and payable (and for which there are adequate accruals, in accordance with GAAP).

 

(c)              Closing Agreements; Etc. No Acquired Company will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing as a result of any change in method of accounting, closing agreement, intercompany transaction, installment sale or prepaid amount received for a taxable period ending on or prior to the Closing. No Acquired Company is a party to or bound by any Tax allocation or sharing agreement. No Acquired Company has any Liability for the Taxes of any Person (other than such Acquired Company).

 

(d)              Tax Incentives. Part 4.14(d) of the Disclosure Schedule sets forth all Tax exemptions, Tax holidays or other Tax reduction agreements or arrangements applicable to any of the Acquired Companies. Each Acquired Company has Made Available to Purchaser all documentation relating to any applicable Tax holidays or incentives. Each Acquired Company is in compliance with the requirements for any applicable Tax holidays or incentives and none of the Tax holidays or incentives will be jeopardized by the transactions contemplated in this Agreement. The consummation of the transactions contemplated by this Agreement will not adversely affect the remaining duration or the extent of the incentive or require any recapture of any previously claimed incentive, and no Consent of any Governmental Body is required prior to the consummation of such transactions in order to preserve the entitlement of the Company to any such incentive. The consummation of the transactions contemplated hereby will not have any adverse effect on such qualification as an Industrial Company.

 

(e)              No Liability. No Acquired Company has any Liability for the Taxes of any Person as a transferee or successor, by Contract or otherwise.

 

(f)              Withholdings. Each Acquired Company has complied with all applicable Legal Requirements relating to the payment, reporting and withholding of Taxes, has, within the time and in the manner prescribed by law, withheld from employee wages or consulting compensation and timely paid over to the proper governmental authorities (or is properly holding for such timely payment) all amounts required to be so withheld and paid over under all applicable Legal Requirements, and has timely filed all withholding Tax Returns, for all periods.

 

(g)              Tax Rulings. Except as set forth in Part 4.14(g) of the Disclosure Schedule, no Acquired Company has requested or received a ruling from any Tax authority or signed a closing or other agreement with any Tax authority.

 

(h)              VAT. Except as set forth in Part 4.14(h) of the Disclosure Schedule, each Acquired Company has complied in all respects with all laws concerning VAT, including with respect to the making on time of accurate returns and payments and the maintenance of records. No Acquired Company has made any exempt supplies in the current or preceding VAT year applicable to them, and there are no circumstances by reason of which there might not be a full entitlement to credit for all VAT chargeable on supplies and acquisitions received and imports made (or agreed or deemed to be received or made) by them.

 

  

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(i)               Filing of Tax Returns. No Acquired Company is subject to Tax in any country other than its country of incorporation or formation by virtue of having a permanent establishment or other place of business in that country. No claim that is unresolved has ever been made by a Governmental Body that the Acquired Company is or may be subject to Tax in a jurisdiction in which it does not file Tax Returns.

 

4.15.       Employee and Labor Matters; Benefit Plans.

 

(a)              Employee List. Part 4.15(a) of the Disclosure Schedule contains a list of all employees and consultants of each Acquired Company as of the date of this Agreement, and correctly reflects all benefits which each such employee or consultant is entitled, including their salaries, any other cash compensation payable to them (including compensation payable pursuant to bonus, deferred compensation or commission arrangements), social benefits, their dates and term (if applicable) of employment, their positions, their work location by city and state, and their visa status, if applicable. There are no written or unwritten policies or customs that, by extension, could entitle any current or former Acquired Company Employees to benefits in addition to those to which they are entitled pursuant to applicable Legal Requirements (including unwritten customs concerning the payment of statutory severance pay when it is not legally required), other than those included in the Acquired Company Employee Plans or the Acquired Company Employee Agreements or employment agreement with respect to former Acquired Company Employees. The Acquired Companies are in compliance with all applicable Legal Requirements and Contracts relating to employment, employment practices, wages, pensions, bonuses and terms and conditions of employment, including employee compensation matters.

 

(b)              All of the salaries, bonuses and other compensation and benefits to which the Acquired Companies’ employees and consultants are eligible (including, without limitation, salaries, fees, social benefits, pension benefits, welfare benefits, bonuses or other incentive compensation, deferred compensation, severance, salary continuation or other employee fringe benefit plans or arrangements, automobile, reimbursement of expenses and benefits in kind) have been duly paid in full by the Acquired Companies, all pensions payments and reserves are fully funded, and no Acquired Company has any obligation or liability (contingent or otherwise) with respect to such salaries, bonuses, compensation benefits or pensions.

 

(c)              Employment Termination. The employment of each of the current Acquired Company Employees is terminable by the respective Acquired Company, subject only to the terms of the respective Acquire Company Employee Agreement and applicable Legal Requirements. The Acquired Companies have no obligations towards any former employees of the Acquired Companies. Neither the execution, delivery or performance of this Agreement, nor the consummation of any of the other transactions contemplated by this Agreement, will result in any payment or Acquired Company Liability to any current or former employee, officer, consultant or director of any Acquired Company, or result in an increase to the salary, compensation or other benefits payable thereto.

 

(d)              Employee Plans and Agreements. Part 4.15(d) of the Disclosure Schedule contains an accurate and complete list of each Acquired Company Employee Agreement and each Acquired Company Employee Plan. No Acquired Company intends and no Acquired Company has committed to establish or enter into any new Acquired Company Employee Plan or Acquired Company Employee Agreement, or to modify any Acquired Company Employee Plan or Acquired Company Employee Agreement.

 

(e)              Independent Contractors. Except as set forth on Part 4.15(e) of the Disclosure Schedule, no Person is, or ever was, an independent contractor or outsourced worker of (or consultant to) of the Company. No Persons were incorrectly classified as external consultants or contractors as opposed to employees.

 

  

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(f)               No Unions, Etc. No Acquired Company is a party to or bound by, and no Acquired Company has ever been a party to or bound by, any union contract, collective bargaining agreement or similar Contract. The Company is not and never has been a member of any employers' organization and there is no, and never has been, an employees' committee in the Company.

 

(g)              Severance, Etc. Except as set forth in Part 4.15(g) of the Disclosure Schedule: (i) the employment of each current Acquired Company Employee is subject to termination upon not more than three months’ prior written notice under the termination notice provisions included in the applicable Acquired Company Employment Agreement with such Acquired Company Employee identified or required to be identified in Part 4.15(d) of the Disclosure Schedule or under applicable Legal Requirements; (ii) all obligations of the Acquired Companies to provide severance pay to all current Acquired Company Employees are fully funded and are accrued on the Company Financial Statements to the extent required under applicable law; and (iii) no current Acquired Company Employee's employment by any Acquired Company requires any special license, permit or other Governmental Authorization.

 

(h)              None of the Key Employees has expressed an intention or interest (whether formally or informally) in, or taken any action toward terminating his or her employment with an Acquired Company before or after the Closing.

 

4.16.       Environmental Matters. Each of the Acquired Companies is in compliance in all material respects with all applicable Environmental Laws, which compliance includes the possession by each of the Acquired Companies of all Environmental Licenses and other Governmental Authorizations required under applicable Environmental Laws, and compliance with the terms and conditions thereof. No Acquired Company has received any notice or other communication, whether from a Governmental Body, citizens group, a current or former Acquired Company Employee or otherwise, that alleges that any Acquired Company is not in compliance with any Environmental Law, and there are no circumstances that may prevent or interfere with such Acquired Company’s compliance with any Environmental Law in the future. To the Selling Shareholders' Knowledge, no current or prior owner of any property leased or controlled by any of the Acquired Companies has received any notice or other communication, whether from a Governmental Body, citizens group, current or former Acquired Company Employee or otherwise, that alleges that such current or prior owner or such Acquired Company is not in compliance with any Environmental Law. The Acquired Companies have not caused or contributed to any Environmental Release in any material respects and there are no circumstances which may give rise to any Environmental Release by any of the Acquired Companies. To the Selling Shareholders' Knowledge, no Contaminants are stored or contained on or under any of the leasehold properties held or occupied by any Acquired Company, whether in storage tanks, land fills, pits, ponds, lagoons or otherwise. All Governmental Authorizations currently held by each of the Acquired Companies pursuant to Environmental Laws are identified in Part 4.16 of the Disclosure Schedule.

 

4.17.       Insurance. Part 4.17 of the Disclosure Schedule identifies each insurance policy maintained by, at the expense of or for the benefit of each of the Acquired Companies as of the date of this Agreement and identifies any material claims made thereunder as of the date of this Agreement. Each of such insurance policies is in full force and effect. Since January 1, 2012, none of the Acquired Companies has received any notice or other communication regarding any actual or possible: (i) cancellation or invalidation of any insurance policy; (ii) refusal of any coverage or rejection of any claim under any insurance policy; or (iii) material adjustment in the amount of the premiums payable with respect to any insurance policy. Neither (A) the execution, delivery or performance of this Agreement or any of the other agreements, documents or instruments referred to in this Agreement, nor (B) the consummation of the transactions contemplated by this Agreement or any such other agreement, document or instrument, will (with or without notice or lapse of time): (1) result in the cancellation, invalidation or termination, or give any Person the right to cancel, invalidate or terminate, any of the insurance policies of the Acquired Companies; (2) result in the reduction of coverage, or give any Person the right to reduce the coverage, under any such insurance policies; or (3) have any impact on any Acquired Company’s right or ability to make a claim under any such insurance policies in respect of or relating to events or circumstances that have occurred prior to the Closing.

 

  

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4.18.       Related Party Transactions. Other than as set forth in Part 4.18 of the Disclosure Schedule, no Related Party has, and no Related Party has had, any interest in any material asset used in or otherwise relating to the business of any Acquired Company; (b) no Related Party is, or has been, indebted to any Acquired Company (other than for ordinary travel advances); (c) no Related Party has entered into, or has had any financial interest in, any material Contract, transaction or business dealing with or involving any Acquired Company; (d) to the Selling Shareholders' Knowledge, no Related Party is competing, or has at any time competed, with any Acquired Company; and (e) no Related Party has any claim or right against any Acquired Company (other than rights to receive compensation for services performed as an employee or consultant of any Acquired Company or other rights arising in the ordinary course of employment or consultancy). No member of the board of directors of any Acquired Company has ever had a conflict of interest with respect to such Acquired Company, and each such member has provided confirmation of the foregoing to such Acquired Company in accordance with applicable Legal Requirements.

 

4.19.       Legal Proceedings; Orders.

 

(a)              Legal Proceedings. Other than as set forth in Part 4.19 of the Disclosure Schedule, there is no pending Legal Proceeding and, to the Selling Shareholders' Knowledge, no Person has threatened to commence any Legal Proceeding: (i) that involves any Acquired Company, any Company Product or any of the assets owned or used by any Acquired Company or any Person whose liability any Acquired Company has or may have retained or assumed, either contractually or by operation of law; (ii) that challenges, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, any of the transactions contemplated by this Agreement; or (iii) that relates to the ownership of any securities of any Acquired Company, or right to receive consideration as a result of this Agreement. To the Selling Shareholders' Knowledge, no event has occurred, and no claim, dispute or other condition or circumstance exists, that will or could reasonably be expected to, give rise to or serve as a basis for the commencement of any such Legal Proceeding. Except as set forth in Part 4.19(a) of the Disclosure Schedule, no Legal Proceeding has ever been commenced by, and no Legal Proceeding has ever been pending against, any Acquired Company.

 

(b)              Orders. There is no order, writ, injunction, judgment or decree to which any Acquired Company, or any of the assets owned or used by any Acquired Company, is subject. To the Selling Shareholders' Knowledge, no officer or other employee of any Acquired Company is subject to any order, writ, injunction, judgment or decree that prohibits such officer or other employee from engaging in or continuing any conduct, activity or practice relating to any Acquired Company’s business.

 

4.20.       Authority; Binding Nature of Agreement. Each Acquired Company has the absolute and unrestricted right, power and authority to perform its obligations under each agreement, document or instrument referred to in or contemplated by this Agreement to which such Acquired Company is or will be a party. Each agreement, document and instrument referred to in or contemplated by this Agreement to which an Acquired Company is a party constitutes the legal, valid and binding obligation of such Acquired Company, enforceable against such Acquired Company in accordance with its terms, subject to: (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief and other equitable remedies.

 

  

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4.21.       Non-Contravention; Consents. Neither: (1) the execution, delivery or performance of this Agreement or any of the other agreements, documents or instruments referred to in this Agreement; nor (2) any of the transactions contemplated by this Agreement or any such other agreement, document or instrument, will (with or without notice or lapse of time):

 

(a)              contravene, conflict with or result in a violation of: (i) any of the provisions of any Charter Documents; or (ii) any resolution adopted by the shareholders, members or board of directors (or similar body) of any Acquired Company;

 

(b)              contravene, conflict with or result in a violation of, or give any Governmental Body or other Person the right to challenge any of the transactions contemplated by this Agreement or to exercise any remedy or obtain any relief under, any Legal Requirement or any order, writ, injunction, judgment or decree to which any Acquired Company or any of the assets owned or used by any Acquired Company, is subject;

 

(c)              contravene, conflict with or result in a violation of any of the terms or requirements of, or give any Governmental Body the right to revoke, withdraw, suspend, cancel, terminate or modify, any Governmental Authorization that is held by any Acquired Company or that otherwise relates to any Acquired Company’s business or to any of the assets owned or used by any Acquired Company;

 

(d)              contravene, conflict with or result in a violation or breach of, or result in a default under, any provision of any Acquired Company Contract, or give any Person the right to: (i) declare a default or exercise any remedy under any such Acquired Company Contract; (ii) accelerate the maturity or performance of any such Acquired Company Contract or any of its terms or become eligible for any rights or benefits; or (iii) cancel, terminate or modify any such Acquired Company Contract; or

 

(e)              result in the imposition or creation of any lien or other Encumbrance upon or with respect to any asset owned or used by any Acquired Company (except for minor liens that will not, either individually or in the aggregate, materially detract from the value of the assets subject thereto or materially impair the operations of any Acquired Company) or result in a transfer, distribution or sale of such asset.

 

No Acquired Company is and no Acquired Company will be required to make any filing with or give any notice to, or to obtain any Consent from, any Person in connection with: (x) the performance of this Agreement or any of the other agreements, documents or instruments referred to in this Agreement; or (y) any of the transactions contemplated by this Agreement or by any of the other agreements, documents or instruments referred to in this Agreement.

 

4.22.       Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with any of the transactions contemplated by this Agreement based upon arrangements made by or on behalf of any Acquired Company. No Person is or may become entitled to receive any fee or other amount from any Acquired Company for professional services performed or to be performed in connection with any of the transactions contemplated by this Agreement.

 

4.23.       Full Disclosure. This Agreement (including the Disclosure Schedule, the Due Diligence Material, Closing Certificate and Estimated Closing Consideration Certificate) does not as of the date hereof, and will not as of the Closing: (i) contain any representation, warranty or information that is false or misleading with respect to any material fact; or (ii) omit to state any material fact necessary in order to make the representations, warranties and information contained and to be contained herein and therein (in the light of the circumstances under which such representations, warranties and information were or will be made or provided) not false or misleading. The Company and the Selling Shareholders have no Knowledge of any information or other fact that is or may become materially adverse to the business, condition, assets, capitalization, Intellectual Property, Liabilities, operations, results of operations, financial performance or prospects of the Acquired Companies that has not been set forth in this Agreement or in the Disclosure Schedule.

 

  

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5.

	
Representations and Warranties of Purchaser

 

Purchaser represents and warrants to the Selling Shareholders as follows:

 

5.1.          Due Organization. Purchaser is a company duly incorporated, organized and validly existing under the laws of the State of Israel.

 

5.2.          Authority; Binding Nature of Agreement. Purchaser has the absolute and unrestricted right, power and authority to enter into and perform its obligations under this Agreement and under each other agreement, document and instrument referred to in this Agreement to which Purchaser is a party; and the execution, delivery and performance by Purchaser of this Agreement or any such other agreement, document and instrument have been duly authorized by all necessary action on the part of Purchaser. This Agreement and each other agreement, document or instrument referred to in this Agreement to which Purchaser is a party constitutes the legal, valid and binding obligation of Purchaser, enforceable against it in accordance with its terms, subject to: (a) laws of general application relating to bankruptcy, insolvency and the relief of debtors; and (b) rules of law governing specific performance, injunctive relief and other equitable remedies.

 

	
6.

	
Covenants

 

6.1.          Operation of the Business of the Company. During the Pre-Closing Period, the Selling Shareholders shall ensure and shall procure that the Company ensures that:

 

(a)              each Acquired Company shall conduct its business and operations in the ordinary course and in substantially the same manner as such business and operations have been conducted prior to the date of this Agreement;

 

(b)              each Acquired Company shall use commercially reasonable efforts to preserve intact its current business organization, keep available the services of its current officers, managers and employees and maintain its relations and good will with all suppliers, customers, landlords, creditors, employees and other Persons having business relationships with any Acquired Company;

 

(c)              the Selling Shareholders shall report to Purchaser any material changes in the status of the business of such Acquired Company;

 

(d)              no Acquired Company shall declare, accrue, set aside or pay any dividend or make any other distribution in respect of any shares or other securities, or repurchase, redeem or otherwise reacquire any shares or other securities;

 

(e)              no Acquired Company shall sell, issue or authorize the issuance of: (i) any shares or other security; (ii) any option or right to acquire any shares (or cash based on the value of shares) or other security; or (iii) any instrument convertible into or exchangeable for any shares (or cash based on the value of shares) or other security;

 

(f)               no Acquired Company shall amend or permit the adoption of any amendment to such Acquired Company’s Charter Documents, or effect or permit such Acquired Company to become a party to any Acquisition Transaction, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction;

 

(g)              no Acquired Company shall form any Subsidiary or acquire any equity interest or other interest in any other Entity;

 

(h)              no Acquired Company shall make any capital expenditure exceeding in the aggregate $ 20,000;

 

(i)               no Acquired Company shall: (i) enter into, or permit any of the assets owned or used by it to become bound by, any Contract that is or would constitute a material Contract; or (ii) amend or prematurely terminate, or waive any material right or remedy under, any such Contract;

 

  

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(j)              no Acquired Company shall: (i) acquire, lease or license any right or other asset from any other Person for an aggregate value in excess of $ 10,000; (ii) sell or otherwise dispose of, or lease or license, any right or other asset to any other Person; or (iii) waive or relinquish any right, in the case of each of clauses “(i)” through “(iii)”, except in the ordinary course of business consistent with past practices;

 

(k)             no Acquired Company shall: (i) lend money to any Person (except that an Acquired Company may make routine travel advances to its current employees in the ordinary course of business consistent with past practices); or (ii) incur or guarantee any indebtedness for borrowed money;

 

(l)              no Acquired Company shall: (i) establish, adopt, amend or terminate any Acquired Company Employee Plan; (ii) pay any bonus or make any profit-sharing payment, cash incentive payment or similar payment, other than commissions paid in the ordinary course of business and consistent with past practices; (iii) increase the amount of the wages, salary, commissions, fringe benefits or other compensation (including equity-based compensation, whether payable in cash or otherwise) or remuneration payable to any of its directors, officers, managers or other employees; (iv) promote or change the title of any of its employees (retroactively or otherwise); or (v) hire or make an offer to hire any new employee;

 

(m)            no Acquired Company shall change any of its methods of accounting or accounting practices in any material respect;

 

(n)             no Acquired Company shall make any payments in respect of Tax, unless due, make or change any Tax election, adopt or change a material accounting method in respect of Taxes, enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement, settle or comprise a claim, notice, audit report or assessment in respect of Taxes, or consent to an extension or waiver of the statutory limitation period applicable to a claim or assessment in respect of Taxes;

 

(o)              no Acquired Company shall commence or settle any Legal Proceeding;

 

(p)              no Acquired Company shall enter into any material transaction or take any other material action outside the ordinary course of business or inconsistent with its past practices; and

 

(q)              no Acquired Company shall agree or commit to take any of the actions described in clauses “(d)” through “(p)” above.

 

Notwithstanding the foregoing, the Company may take any action described in: (i) clauses“(d)” through “(q)” above if: (A) Purchaser gives its prior written consent to the taking of such action by such Acquired Company; or (B) such action is expressly contemplated by this Agreement.

 

6.2.          Notification

 

(a)              Notification. During the Pre-Closing Period, the Selling Shareholders or the Company shall promptly notify Purchaser in writing of: (i) the discovery by any Selling Shareholder or the Company of any event, condition, fact or circumstance that occurred or existed on or prior to the date of this Agreement or that occurs, arises or exists after the date of this Agreement and that would cause or constitute a breach of or an material inaccuracy in any representation or warranty made by the Company or the Selling Shareholders in this Agreement; (ii) any breach of any covenant or obligation of the Company or the Selling Shareholders; and (iii) any event, condition, fact or circumstance that would make the timely satisfaction of any of the conditions set forth in Section 7 impossible or unlikely.

 

  

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(b)              No such notification or update shall be deemed to supplement or amend the representation or warranty made by the Company or the Selling Shareholders in this Agreement or the Disclosure Schedule for the purpose of: (i) determining the accuracy of any of the representations and warranties made by the Company or the Selling Shareholders in this Agreement; or (ii) determining whether any of the conditions set forth in Section 7 have been satisfied.

 

6.3.          No Shop. During the Pre-Closing Period, the Company and the Selling Shareholders shall not, and shall ensure that each Acquired Company or Selling Shareholder or each Representative of any Acquired Company or of any Selling Shareholder does not: (a) solicit or encourage the initiation or submission of any proposal or offer relating to a possible Acquisition Transaction; or (b) participate in any discussions or negotiations or enter into any agreement, understanding or arrangement with, or provide any information to, any Person (other than Purchaser or its Representatives) relating to or in connection with a possible Acquisition Transaction. The Company and the Selling Shareholders shall promptly (and in any event within 48 hours of receipt thereof) notify Purchaser in writing of any inquiry, indication of interest, proposal or offer relating to a possible Acquisition Transaction that is received by any of the Selling Shareholders or any Acquired Company during the Pre-Closing Period (including the identity of the Person making or submitting such inquiry, indication of interest, proposal or offer, and the terms thereof).

 

6.4.          Restriction on Transfer. The Selling Shareholders agree that, during the Pre-Closing Period, the Selling Shareholders shall not directly or indirectly sell or otherwise transfer or dispose of, or pledge or otherwise permit to be subject to any Encumbrance, any Company Shares or any other security of the Company, or any direct or indirect beneficial interest therein.

 

6.5.          Filings and Consents.

 

(a)              Filings. Each party shall use commercially reasonable efforts to file, as soon as practicable after the date of this Agreement, all notices, reports and other documents, if any, required to be filed by such party with any Governmental Body with respect to the transactions contemplated by this Agreement, and to submit promptly any additional information requested by any such Governmental Body.

 

(b)              Efforts. Subject to Section 6.5(c), each party hereto shall use commercially reasonable efforts to take, or cause to be taken, all actions necessary to consummate and make effective the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, but subject to Section 6.5(c), each party to this Agreement: (i) shall make all filings (if any) and give all notices (if any) required to be made and given by such party in connection with the transactions contemplated by this Agreement; and (ii) shall use commercially reasonable efforts to obtain each Consent (if any) required to be obtained (pursuant to any applicable Legal Requirement or Contract, or otherwise) by such party in connection with the transactions contemplated by this Agreement.

 

(c)              Limitations. Notwithstanding anything to the contrary contained in Section 6.5(b) or elsewhere in this Agreement, Purchaser shall not have any obligation under this Agreement: (i) to divest or agree to divest (or cause any of its Affiliates or any Acquired Company to divest or agree to divest) any of its respective businesses, product lines or assets, or to take or agree to take (or cause any of its Affiliates or any Acquired Company to take or agree to take) any other action or to agree (or cause any of its Affiliates or any Acquired Company to agree) to any limitation or restriction on any of its respective businesses, product lines or assets; or (ii) to contest any Legal Proceeding relating to the transactions contemplated by this Agreement.

 

6.6.          Confidentiality; Public Announcements.

 

(a)             The provisions of the NDA, are hereby incorporated into this Agreement and each of the Parties hereto agrees to maintain the confidentiality of all information received from the other party and its representatives in connection with this Agreement and the transaction described herein, and not to use any of such information for any purpose except to evaluate and perform the transaction contemplated by the parties hereto (the “Purpose”).

 

  

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(b)              Notwithstanding anything to the contrary in this agreement or the NDA, in case any Confidential Information (as defined in the NDA) is information that may be considered "material non-public information" pursuant to the securities laws and regulations governing Purchaser and the securities exchanges on which its shares are traded – the Company and Selling Shareholders hereby undertakes (and undertake to cause their Representatives) not to make any unlawful use of such Confidential Information, including by way of effecting a transaction in a security of Purchaser while the Confidential Information or any part thereof is in their possession. The Company and Selling Shareholders are aware, and will advise their Representatives who are informed of any of the matters that are the subject of this Agreement, of the restrictions imposed by the applicable securities laws on the purchase or sale of securities by any person who has received material, non-public information regarding a company with publicly traded securities, as well as the restrictions making it unlawful to communicate such information to any other person when it is reasonably foreseeable that such other person is likely to purchase or sell securities in reliance upon such information.

 

(c)              From and after the date of this Agreement, the Company and each Selling Shareholder hereby covenants with and undertakes to Purchaser that the Company and such Selling Shareholder shall not (and the Company and such Selling Shareholder shall ensure that its Representatives, the Acquired Companies and the Acquired Companies’ Representatives do not) issue any press release or make any public statement (including to any Acquired Company Employee) regarding (or otherwise disclose to any Person the existence or terms of) this Agreement or any of the other transactions or documents contemplated by this Agreement, without Purchaser’s prior written consent. For avoidance of doubt, and notwithstanding anything herein or in the NDA to the contrary, the Purchaser will entitled to make any public statement and deliver any notice to a Governmental Body as it is legally required to issue or make under any Legal Requirement (including any applicable securities law, or by the applicable rules of any stock exchange on which Purchaser lists its securities).

 

6.7.         Resignation of the board of directors; Credit Cards. The Company and the Selling Shareholders shall (and shall cause each Acquired Company to) obtain and deliver to Purchaser the resignation of each member of the board of directors of each Acquired Company effective as of the Closing. Immediately following Closing the Purchaser shall cause an extraordinary general meeting of each of the Acquired Companies to be held, at which meetings the Purchaser shall appoint new board members of the Company (it being understood that such new board members are registered at the Danish Business Authority effective as at the Closing Date). Prior to the Closing, the Company shall take all action necessary to revoke, effective as of the Closing, all signatory rights of all officers and board members of the Acquired Companies, and shall suspend and cancel all Acquired Company credit cards and debit cards.

 

6.8.         Retention. Each Key Employee shall be eligible for the retention terms set forth in Schedule 6.8 attached hereto.

 

6.9.         Repayment of Shareholder Loans. By Closing the Selling Shareholders shall have repaid any amounts which are owed and outstanding by them to any Acquired Company, and no amounts shall be owed and outstanding with respect to loans made by any Acquired Company to the Selling Shareholder or any other employee.

 

6.10.       Closing Balance Sheets and Closing Consideration Certificate; Post-Closing Purchase Price Adjustment

 

(a)              Not later than 90 Business Days following the Closing, the Purchaser shall prepare and deliver to the Selling Shareholders: (x) final audited solo balance sheets and statements of income for each of the Acquired Companies as of the Closing Date prepared in accordance with US GAAP (the “Closing Balance Sheets”); and (y) a certificate setting forth the final Closing Consideration Certificate Data as of Closing based on GAAP (the “Closing Consideration Certificate”), which shall be set forth on an accompanying spreadsheet. The Selling Shareholders shall assist and make available all necessary information to enable the preparation of the Closing Balance Sheets and the Closing Consideration Certificate.

 

  

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(b)              If the Selling Shareholders agree to the Closing Consideration Certificate prepared by the Purchaser, it will be final and binding on the Parties.

 

(c)              If the Selling Shareholders disagree with the Purchaser's Closing Consideration Certificate, the Selling Shareholders must give notice of an objection to the Purchaser no later than 20 Business Days after receipt of the Closing Consideration Certificate. Failure to do so will be deemed to be agreement of the Selling Shareholders to the Closing Consideration Certificate prepared by the Purchaser. The Parties must attempt to reach an agreement on the disputed matters no later than 15 Business Days after the Purchaser's receipt of the Selling Shareholder's objection. If the Parties are unable to reach an agreement within this time limit, either Party may demand that the disputed matters be referred to the Expert.

 

(d)              The Expert will decide on the disputed matters in accordance with the Agreement and will revise the Closing Consideration Certificate to the extent that the Expert's decision on the disputed matters deviates from the Closing Consideration Certificate prepared by the Purchaser. If the decision of the disputed matters depends on an accounting estimate, the Expert must make an independent estimate on the basis of what he considers to be fair and reasonable under the Agreement. The Expert is not authorised to decide on any legal dispute concerning the interpretation of the Agreement. Any such dispute must be decided in accordance with section 11.8.

 

(e)              The final Closing Consideration Certificate prepared by the Expert will be final and binding on the Parties, and it can only be challenged in accordance with section 11.8 in the event of fraudulent acts or obvious errors.

 

(f)               The Expert will make decisions as to the apportionment of his fees and other costs between the Parties, taking into account the amount by which each Party’s calculation deviated from the Closing Consideration Certificate finally determined by him.

 

(g)              No later than 15 Business Days after the Closing Consideration Certificate has become final and binding on the Parties, the Adjustment Amount, if any, must be settled between the parties as follows: (i) in the event of a positive Adjustment Amount and an increase in the Purchase Price, the Purchaser shall pay the sum of such Adjustment Amount to the Selling Shareholders in the same manner as the Closing Payment was paid pursuant to Section 2.2(a), and (ii) in the event of a negative Adjustment Amount and a decrease in the Purchase Price, the Selling Shareholders shall pay the sum of such Adjustment Amount to the Purchaser  or such amount shall be set-off against the Escrow Account at the Purchaser’s discretion.

 

6.11.       Non-Competition and Non-Solicitation. 

 

As further consideration for the transactions contemplated by this Agreement and the payment of the Purchase Price by Purchaser, for a period ending on the second anniversary of the Closing Date, the Founders shall not, and shall require their Affiliates not to directly or indirectly, whether as an employee, director, officer, consultant, shareholder, joint venturer, or otherwise:

 

(a)              develop, market, manufacture, sell or distribute any goods or services or otherwise act in any manner which competes with the Business; or

 

(b)              call upon, solicit or communicate with any Person who is an Acquired Company Employee for the purpose or with the intent of enticing, or in a manner reasonably likely to entice, such Person to terminate his or her employment or contracting relationship with Purchaser, any Acquired Companu, or their affiliates.

 

  

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To the extent that either of the Founders shall resign or be terminated during the Evaluation Period from the Company or Purchaser (except for a resignation for Good Reason or a Termination Without Cause) then the Founders shall forfeit any entitlement to the Excess Payment.

 

6.12.       No Distribution. 

 

For the period beginning on the date hereof and ending on the date on which all funds remaining in the Escrow Account have been disbursed: (i) both of Fiberblaze Holding APS and Hilmer APS may grant any dividends or other distributions as long as an amount of $1,000,000 is retained by each of them (which amount may not be distributed by dividend or otherwise); and (ii) neither Fiberblaze Holding APS nor Hilmer APS may otherwise enter into a process of winding-up, dissolution, administration, liquidation, conservatorship, rearrangement, receivership, insolvency, reorganization, which would have the result of releasing the assets of such companies to their shareholders or creditors.

 

	
7.

	
Conditions Precedent to Obligations of Purchaser

 

The obligations of Purchaser to cause the transactions contemplated by this Agreement to be consummated are subject to the satisfaction (or waiver by Purchaser), at or prior to the Closing, of each of the following conditions:

 

7.1.          Accuracy of Representations.

 

(a)              Accuracy at Signing. Each of the representations and warranties made by the Company or the Selling Shareholders in this Agreement shall have been true and correct in all material respects when made (without giving effect to any qualification as to materiality).

 

(b)              Accuracy at Closing. Each of the representations and warranties made by the Company or the Selling Shareholders in this Agreement shall be true and correct as of the Closing Date in all material respects as if made on and as of the Closing Date (without giving effect to any qualification as to materiality), other than representations and warranties which by their terms are made as of a specific date, which shall have been true and correct as of such date, it being understood, that any inaccuracies in the Selling Shareholder's good faith estimates of the Closing Consideration Certificate Data (section 4.4(c)) does not constitute a breach of warranty.

 

7.2.          Performance of Covenants. Each of the covenants and obligations that the Company or the Selling Shareholders are required to comply with or to perform at or prior to the Closing shall have been complied with and performed in all material respects.

 

7.3.          Consents.

 

(a)               Governmental Consents. All filings with, notices to and other Consents of any Governmental Body, if any, required to be made or obtained on or prior to the Closing Date in connection with the transactions contemplated by this Agreement shall have been made or obtained and shall be in full force and effect and any waiting period under any applicable antitrust or competition law, regulation or other Legal Requirement shall have expired or been terminated.

 

7.4.          No Material Adverse Effect. Since the date of this Agreement, there shall not have occurred any Material Adverse Effect, and no event shall have occurred or circumstance shall exist that, in combination with any other events or circumstances, could reasonably be expected to have or result in a Material Adverse Effect.

 

  

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7.5.          Share Register. The Selling Shareholders shall be the only holders of Company Shares and shall have delivered to Purchaser (i) documentary evidence that the Company's board of directors has been notified of the transfer to the Purchaser of title to all the Company Shares and confirmation from the Company's board of directors of its receipt of said notification and (ii) a true and correct copy of the Company's share register representing all of the Company Shares outstanding as of immediately after the Closing, certified as such by the chief executive officer of the Company, evidencing the transfer of all Company Shares to the Purchaser.

 

7.6.          Agreements and Documents. Purchaser shall have received the following agreements and documents, each of which shall be in full force and effect:

 

(a)              the Escrow Agreement, duly executed by the Selling Shareholders;

 

(b)              the Founders' employment agreements in the form of Exhibit C attached hereto, duly executed by each of the Founders.

 

(c)              assignments and releases, in form and substance reasonably satisfactory to Purchaser, duly executed by each of the Founders pursuant to which the Founders irrevocably assign all of their rights in the Acquired Company IP to the Company.

 

(d)              a Release Agreement  substantially in the form of Exhibit D attached hereto, duly executed by each of the Selling Shareholders, and each other Person identified on Schedule 7.6(d);

 

(e)              the Key Employees' employment agreements substantially in the form of Exhibit E, duly executed by each of the Key Employees;

 

(f)               a certificate duly executed by the chief executive officer or manager of each of the Selling Shareholders and containing the representation and warranty of such Selling Shareholders that the conditions set forth in Sections 7.1, 7.2 (expressly including Section 6.7), 7.4, 7.5, 7.8, 7.9, and 7.10 have been duly satisfied (the “Closing Certificate”);

 

(g)              a duly executed waiver and release from Anritsu A/S, in the form of Exhibit F;

 

(h)              a duly executed consent from Xilinx Inc., in the form of Exhibit G;

 

(i)               a duly executed consent from Maxeler, in the form of Exhibit H;

 

(j)               a duly executed consent from GSI Technology Inc., in the form of Exhibit I;

 

(k)             duly executed payoff letters or other evidence, in form and substance reasonably satisfactory to Purchaser, from each outside legal counsel and any financial advisor or accountant who is entitled to any compensation from any Acquired Company due to services performed in connection with this Agreement or any of the transactions contemplated by this Agreement, in which such Person acknowledges: (A) the total amount of fees, costs and expenses of any nature that is payable to such Person in connection with this Agreement and any of the transactions contemplated by this Agreement; and (B) that, upon receipt of the amount referred to in clause “(A),” it will have been paid in full and will not be owed any other amount by any Acquired Company with respect to this Agreement or the transactions contemplated by this Agreement;

 

(l)               duly executed payoff letters from each Pay-Off Creditor, containing, in each case the amounts and currency required to effect full repayment of each respective component of the Pay-Off Amounts and the wire transfer information of the Pay-Off Creditors;

 

(m)             the written resignation letters from all the members of the board of directors of each Acquired Company referred to in Section 6.7;

 

(n)              the shareholders' register and minute books (complete and written up to the date of Closing) of each Acquired Company;

 

(o)              a legal opinion regarding the Company executed by counsel for the Company, in substantially the form of Exhibit J.

 

  

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7.7.          No Restraints. No temporary restraining order, preliminary or permanent injunction or cease and desist or other order preventing the consummation of the transactions contemplated by this Agreement, or imposing fines, assessments, costs, liabilities or penalties in respect thereof, shall have been issued by any court of competent jurisdiction or Governmental Body and remain in effect, and there shall not be any Legal Requirement enacted or deemed applicable to the transactions contemplated by this Agreement that makes consummation of such transactions illegal.

 

7.8.          Employee Matters.

 

(a)              The Company shall have paid in full any wage, bonus, commission, vacation pay and other employment related benefits due through the Closing.

 

(b)              The Selling Shareholders shall have repaid any amounts which are owed and outstanding by them to any Acquired Company, and no amounts shall be owed and outstanding with respect to loans made by any Acquired Company to the Selling Shareholder or any other employee.

 

7.9.          No Legal Proceedings. No Governmental Body and no other Person shall have commenced or threatened (or made any determination) to commence any Legal Proceeding: (a) challenging any of the transactions contemplated by this Agreement or seeking the recovery of damages in connection with any of the transactions contemplated by this Agreement; (b) seeking to prohibit or limit the exercise by Purchaser of any material right pertaining to its ownership of shares of the Company; (c) seeking to materially restrict or condition, or that may have the effect of preventing, delaying, making illegal or otherwise interfering with, the transactions contemplated by this Agreement; or (d) seeking to compel any Acquired Company, Purchaser or any Affiliate of Purchaser to dispose of or hold separate any material assets as a result of the transactions contemplated by this Agreement.

 

7.10.        Termination of Authorized Signatories. Purchaser shall have received evidence, in form and substance reasonably satisfactory to Purchaser, that the individuals set forth in Part 4.1(c) of the Disclosure Schedule have ceased to have any signatory rights in connection with FIBERBLAZE US LLC.

 

	
8.

	
Conditions Precedent to Obligations of Selling Shareholders

 

The obligations of Selling Shareholders to consummate the transactions contemplated by this Agreement are subject to the satisfaction (or waiver), at or prior to the Closing, of the following conditions:

 

8.1.          Accuracy of Representations.

 

(a)              Accuracy at Signing. Each of the representations and warranties made by Purchaser in this Agreement shall have been accurate in all material respects as of the date of this Agreement.

 

(b)              Accuracy at Closing. Each of the representations and warranties made by Purchaser in this Agreement shall be accurate in all material respects as of the Closing Date as if made on and as of the Closing Date, other than representations and warranties which by their terms are made as of a specific date, which shall have been accurate in all material respects as of such date.

 

8.2.          Performance of Covenants. Each of the covenants and obligations that Purchaser is required to comply with or to perform at or prior to the Closing shall have been complied with and performed in all material respects.

 

  

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8.3.          Agreements and Documents.

 

(a)              The Company shall have received the Escrow Agreement, duly executed by Purchaser and the Escrow Agent.

 

(b)              The Company shall have received a certificate duly executed on behalf of Purchaser by an officer of Purchaser and containing the representation and warranty of Purchaser that the conditions set forth in Section 8.1 and 8.2 have been satisfied.

 

8.4.          Closing Payment. The Selling Shareholders shall have received documentation that the Purchaser has paid the Closing Payment according to clause 2.2(a) in immediately available cash funds with the Closing Date as value date.

 

8.5.          Founder's employment agreements. The Selling Shareholders shall have received the Founder's employment agreements in the form of Exhibit C attached hereto, duly executed by the Purchaser or the Company, whatever the case may be.

 

8.6.          Settlement of Pay-Off Debt. The Selling Shareholders shall have received documentation that the Purchaser has transferred the Pay-Off Amounts into the accounts notified by the Selling Shareholders to the Purchaser according to Section 4.4(b) in immediately available funds.

 

8.7.          No Restraints. No temporary restraining order, preliminary or permanent injunction or other order preventing the consummation of the transactions contemplated by this Agreement shall have been issued by any court of competent jurisdiction and remain in effect, and there shall not be any Legal Requirement enacted or deemed applicable to the transactions contemplated by this Agreement that makes consummation of such transactions illegal.

 

	
9.

	
Termination

 

9.1.          Termination Events. This Agreement may be terminated prior to the Closing:

 

(a)              by the mutual written consent of Purchaser and Selling Shareholders;

 

(b)              by Purchaser if the Closing has not taken place on or before the End Date (other than as a result of any failure on the part of Purchaser to comply with or perform any covenant or obligation of Purchaser set forth in this Agreement or in any other agreement or instrument delivered to the Company in connection with the transactions contemplated by this Agreement);

 

(c)              by Selling Shareholders if the Closing has not taken place on or before the End Date (other than as a result of any failure on the part of the Company or the Selling Shareholders to comply with or perform any covenant or obligation of the Company or the Selling Shareholders set forth in this Agreement or in any other agreement or instrument delivered to Purchaser in connection with the transactions contemplated by this Agreement);

 

(d)              by either Purchaser or the Selling Shareholders if: (i) a court of competent jurisdiction or other Governmental Body shall have issued a final and nonappealable order, decree or ruling, or shall have taken any other action, having the effect of permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement; or (ii) there shall be any Legal Requirement enacted, promulgated, issued or deemed applicable to the transactions contemplated by this Agreement by any Governmental Body that would make consummation of such transactions illegal;

 

(e)              by Purchaser if: (i) any of the representations and warranties of the Company or the Selling Shareholders contained in this Agreement shall not be true and correct as of the date of this Agreement, or shall have become inaccurate as of a date subsequent to the date of this Agreement, such that the condition set forth in Section 7.1 would not be satisfied; (ii) any of the covenants of the Company or the Selling Shareholders contained in this Agreement shall have been breached such that the condition set forth in Section 7.2 would not be satisfied; or (iii) a Material Adverse Effect shall have occurred and the change or effect resulting therefrom continues in effect such that the condition set forth in Section 7.4 would not be satisfied; or

 

  

- 37 -

  

(f)               by the Selling Shareholders if: (i) any of Purchaser’s representations and warranties contained in this Agreement shall be inaccurate as of the date of this Agreement, or shall have become inaccurate as of a date subsequent to the date of this Agreement, such that the condition set forth in Section 8.1 would not be satisfied; or (ii) if any of Purchaser’s covenants contained in this Agreement shall have been breached such that the condition set forth in Section 8.2 would not be satisfied.

 

9.2.          Termination Procedures. If Purchaser wishes to terminate this Agreement pursuant to Section 9.1, Purchaser shall deliver to the Selling Shareholders a written notice stating that Purchaser is terminating this Agreement and setting forth a brief description of the basis on which Purchaser is terminating this Agreement. If the Selling Shareholders wish to terminate this Agreement pursuant to Section 9.1, the Selling Shareholders shall deliver to Purchaser a written notice stating that the Selling Shareholders are terminating this Agreement and setting forth a brief description of the basis on which the Selling Shareholders are terminating this Agreement.

 

9.3.          Effect of Termination. If this Agreement is terminated pursuant to Section 9.1, all further obligations of the parties under this Agreement shall terminate; provided, however, that: (a) with respect to a termination pursuant to Section 9.1(e), neither the Company nor the Selling Shareholders shall be relieved of any obligation or liability arising from any inaccuracy in or breach of any representation or warranty or of any covenant, obligation or other provision contained in this Agreement; (b) with respect to a termination pursuant to Section 9.1(f), the Purchaser shall not be relieved of any obligation or liability arising from any inaccuracy in or breach of any representation or warranty or of any covenant, obligation or other provision contained in this Agreement; (c) the parties shall, in all events, remain bound by and continue to be subject to the provisions set forth in Section 10.1; and (d) the parties shall, in all events, remain bound by and continue to be subject to Section 6.6 and the NDA.

 

	
10.

	
Indemnification, Etc.

 

10.1.       Indemnification. From and after the Closing, each Selling Shareholder shall, subject to the limitations set out in Section 10.3, severally hold harmless and indemnify each of the Indemnitees from and against, and shall severally compensate and reimburse each of the Indemnitees for any Damages that are suffered or incurred by any of the Indemnitees or to which any of the Indemnitees may otherwise become subject (regardless of whether or not such Damages relate to any third party claim) and which arise from or as a result of, or are connected with:

 

(a)                any  breach of any representation or warranty made by the Selling Shareholders in Sections 3 or 4;

 

(b)              any breach of any covenant or obligation of the Company or the Selling Shareholders in this Agreement or in any other agreement or document to be delivered to Purchaser in connection with the transactions contemplated by this Agreement and to which the Selling Shareholders or an Acquired Company are a party;

 

(c)              regardless of the disclosure of any matter set forth in the Disclosure Schedule, any Liability of any Acquired Company relating to any Tax arising from, in connection with or incident to any transactions effected or activities conducted at or prior to the Closing, but related to the period prior to Closing, (including Liability for Tax Returns for periods prior to the Closing which were not filed on time), and any Liability relating to the shareholder loans or other amounts paid by the Company to any of its shareholders during the period prior to Closing;

 

(d)              regardless of the disclosure of any matter set forth in the Disclosure Schedule, any Liability of any Acquired Company relating to claims by former or current Acquired Company Employees or unions on their behalf to rights in any Acquired Company IP and any claims to increased compensation or change of employment contracts relating to intellectual property rights, including resulting from assignment of rights or waiver of claims or failure to implement such assignment prior to Closing, by any former or current Acquired Company Employees;

 

  

- 38 -

  

(e)              regardless of the disclosure of any matter set forth in the Disclosure Schedule:

 

(A) any Liability of any Acquired Company relating to non-compliance with the Danish Act on Employment Contracts, or claims for compensation by former or current Acquired Company Employees or a union on their behalf pursuant to either (i) the Danish Act on Employment Contracts, (ii) termination of employment agreements, or (iii) employee salaries, compensation or other benefits (including pensions) owed with respect to periods prior to the Closing; or

 

(B) any Liability of any Acquired Company relating to salary, wages, any other compensation or bonus, or claims thereto, by or on behalf of Henrik Lilja in excess of the salary, wages, compensation and bonus that Henrik Lilja would have been eligible for pursuant to the terms of his employment agreement with the Company dated as of April 1, 2014, plus ten percent, with respect to the period from and after the Closing and until the Parties have agreed otherwise in writing;

 

(f)               regardless of the disclosure of any matter set forth in the Disclosure Schedule, any Liability of any Acquired Company relating to the financial consultancy engagement with De La Cour Capital LLC as set out in the agreement between the Company and De La Cour Capital LLC;

 

(g)              regardless of the disclosure of any matter set forth in the Disclosure Schedule, any Liability of any Acquired Company relating to insufficient in-bound licensing for Mentor Graphics and Cadence Allegro development tools.

 

10.2.       Indemnification from Escrow.

 

(a)              Indemnification Payment from Escrow. The Purchaser may claim any amount for which it is eligible for indemnification hereunder as well as any amounts which the Selling Shareholders owe the Purchaser in the event of a binding post-Closing Purchase Price decrease according to Sections 6.10(b) or 6.10(g) from the Selling Shareholders, or to the extent that any funds remain in the Escrow Account, directly from the Escrow Account, at its sole discretion. A claim against the Escrow Account shall be made by the Purchaser by written instruction to the Escrow Agent with a copy to the Selling Shareholders and shall include a description of the claim, and a calculation of the Damages or the estimated Damages. Subject to the idemnification in question not having been disputed by the Selling Shareholders in writing within 15 Business Days (other than with respect to indemnification with respect to a binding Post-Closing Purchase Price Decrease according to Sections 6.10(b) or 6.10(g), with respect to which the Selling Shareholders may not dispute the Purchaser’s instructions to the Escrow Agent), the Escrow Agent shall release any amounts specified in such written instruction directly to the Purchaser within 20 Business Days of receipt of such written instruction. The consent of the Selling Shareholders for such payment shall not be required.

 

(b)              Release of Escrow.  Any amounts remaining in the Escrow Account which have not been claimed in accordance with the Escrow Agreement within 18 months of the Closing Date shall be automatically released to the Selling Shareholders pro rata within 10 Business Days of such 18 month anniversary of the Closing Date without need for further written instructions to the Escrow Agent. Notwithstanding the aforementioned, if there is a dispute between the Purchaser and the Selling Shareholders regarding indemnification under this Agreement, which dispute has not been resolved by the 18 month anniversary of the Closing Date, then any amounts relating to such unresolved dispute shall remain in the Escrow Account pending final resolution of the dispute and shall not be released prior to such resolution.

 

  

- 39 -

  

10.3.       Limitations on Indemnification.

 

(a)              The Selling Shareholders are entitled to remedy any breach within 20 Business Days after receipt of the Indemnitee's notice of the claim. The claim will cease to exist if the Selling Shareholders succeed in curing the breach such that the Indemnitee suffers no Damages from such claim as a result.

 

(b)              The Selling Shareholders must pay indemnification on a $ 1 for $ 1 basis without double counting or application of multiples.

 

(c)              The Indemnitee is always required to use all reasonable commercial efforts to mitigate the Damages.

 

(d)              If the Indemnitee subsequently receives payment from a third party in respect of Damages for which the Selling Shareholders have already indemnified the Indemnitee, the Indemnitee must repay an amount equal to the net amount received from such third party to the Selling Shareholders within 20 Business Days from the date on which the amount was received from such third party.

 

(e)              The Selling Shareholders are not liable for the Damages unless: (i) each Damage exceeds $10,000 per event (De Minimis Threshold); and (ii) the total amount of the Damages, each exceeding the De Minimis Threshold, amounts to at least $70,000 (Basket) in which case liability will arise for the whole amount and not just the excess.

 

(f)               The Selling Shareholders are not liable for any Damages exceeding 30% of the Closing Payment (Cap).

 

(g)              The Selling Shareholders are not liable for Damages if the Indemnitee has not given notice of the claim to each of the Selling Shareholders: (i) no later than 11:59 CET on the day 18 months following the Closing Date and (ii) in any event no later than 60 Business Days after the Indemnitee has become aware of the basis of a claim. Any notice of a claim must include a detailed description of the claim, its actual and legal basis and a calculation of the Damages or the estimated Damages.

 

(h)              If the Selling Shareholders reject a claim, in full or in part, the Indemnitee must initiate legal proceedings against the Selling Shareholders no later than 3 months after receipt of the Selling Shareholder's written notice of rejection of a claim. Otherwise, the Selling Shareholders' obligation to indemnify the Indemnitee of the Damages related to the claim in question will cease to exist.

 

(i)              Notwithstanding the aforementioned in Sections 10.3(e), 10.3(f), and 10.3(g), the De Minimis Threshold, Basket, Cap and time limitations set forth in such Sections shall not apply with respect to indemnification for Damages: (i) resulting from  breach of any representation or warranty made by the Selling Shareholders in Sections 3, 4.3, 4.14, and 4.16, (ii) pursuant to Sections 10.1(b) -  10.1(f), or (iii) in the event of fraud or intentional misrepresentation.

 

(j)               The right to indemnification described in Section 10 is the Purchaser’s only remedy for breach of the Agreement except for intentional breach and fraud.

 

  

- 40 -

  

	
11.

	
Miscellaneous Provisions

 

11.1.       Further Assurances. Each party hereto shall execute and cause to be delivered to each other party hereto such instruments and other documents, and shall take such other actions, as such other party may reasonably request (at or after the Closing Date) for the purpose of carrying out or evidencing any of the transactions contemplated by this Agreement.

 

11.2.       No Waiver Relating to Claims for Intentional Misrepresentation, Willful Misconduct or Fraud. The liability of any Person under Section 10 will be in addition to, and not exclusive of, any other liability that any Person may have at law or in equity based on such Person’s intentional misrepresentation, willful misconduct or fraud. Notwithstanding anything to the contrary contained in this Agreement, none of the provisions set forth in this Agreement, including the provisions set forth in Section 10, shall be deemed a waiver by any party to this Agreement of any right or remedy which such party may have at law or in equity based on any other Person’s intentional misrepresentation, willful misconduct or fraud, nor will any such provisions limit, or be deemed to limit: (a) the amounts of recovery sought or awarded in any such claim; (b) the time period during which any such claim may be brought; or (c) the recourse which any such party may seek against another Person with respect to such a claim.

 

11.3.       Fees and Expenses. Subject to Section 10, each party to this Agreement shall bear and pay all fees, costs and expenses that have been incurred or that are incurred in the future by such party in connection with the transactions contemplated by this Agreement, including fees of attorneys, financial advisors or brokers, if any; provided, however, that the Selling Shareholders shall bear all such fees, costs and expenses of the Acquired Companies. The parties have agreed, that the Purchaser shall bear all fees, costs and expenses related to preparing the Closing Balance Sheets.

 

11.4.       Taxes. All applicable taxes resulting from the contemplated transaction which are borne by the Selling Shareholders will be paid by them. The parties, together with their respective legal and tax advisors, will coordinate their efforts to structure the transactions described herein to the extent possible to obtain the most favorable treatment possible for the parties.

 

11.5.       Notices. Any notice or other communication required or permitted to be delivered to any party under this Agreement shall be in writing and shall be deemed properly delivered, given and received by the receiving party: (i) 3 Business Days after being sent by registered, certified or first class mail delivery; (ii) upon delivery, if sent by messenger, and (iii) upon transmission and electronic confirmation of receipt, or (if transmitted and received on a day which is not a Business Day) on the first Business Day (at the receiving end) following transmission and electronic confirmation of receipt, if sent via facsimile or email; provided, however, that any notice of change of address shall only be valid upon receipt.

 

If to Purchaser:

 

	
Silicom Ltd.

	
8 Hanagar St.

	
Kefar-Saba,

	
4442537

	
ISRAEL

	
Attention: Chief Executive Officer

	
Facsimile: +972 – 9 -7651977

	
Email: shaike@silicom.co.il

 

  

- 41 -

  

 

	
with a copy (which shall not constitute notice) to:

 

	
David H. Schapiro, Adv., Eliran Furman, Adv.

	
Yigal Arnon & Co.

	
1 Azrieli Center

	
46th Floor, The Round Tower

	
Tel-Aviv, 6702101

	
ISRAEL

	
Facsimile: +972 3 608 7714

Email: davids@arnon.co.il, eliranf@arnon.co.il

 

                      If to the Selling Shareholders:

 

	
Jakob Hilmer

	
Aalekistevej 220 st. tv.

	
DK-2720 Vanloese

Denmark

	
Jakob@hilmer.dk

	
Nikolaj Hermann

	
Kildevangsvej 9

	
DK-4000 Roskilde

	
Denmark

	
nh@fiberblaze.com

 

	
with a copy (which shall not constitute notice) to:

 

	
Thomas Weincke, Attorney-at-Law

	
Accura Advokatpartnerselskab

	
Tuborg Boulevard 1

	
DK-2900 Hellerup, Copenhagen

	
Denmark

	
Facsimile: +45 3945 2801

Email: Thomas.weincke@accura.dk

 

  

- 42 -

  

 

11.6.       Headings. The headings contained in this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement and shall not be referred to in connection with the construction or interpretation of this Agreement.

 

11.7.       Counterparts and Exchanges by Electronic Transmission or Facsimile. This Agreement may be executed in several counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one agreement. The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission or by facsimile shall be sufficient to bind the parties to the terms and conditions of this Agreement.

 

11.8.       Governing Law; Dispute Resolution.

 

(a)              Governing Law. This Agreement shall be construed in accordance with, and governed in all respects by, the laws of the United Kingdom (without giving effect to principles of conflicts of laws).

 

(b)              Venue. Any action, suit or other legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement may only be brought or otherwise commenced in London, England and each party waives any objection which such party may now or hereafter have to the laying of the venue of any such action, suit or proceeding, and irrevocable submits to the jurisdiction of any such court in any such action, suit or proceeding.

 

11.9.       Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their permitted successors and assigns. No Party shall be permitted to assign any of it's rights or delegate any of it's obligations under this Agreement without the other Party's prior written consent. Any attempted assignment or delegation by any party in violation of this Section 11.9 shall be null and void.

 

11.10.     Waiver. No failure on the part of any Person to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any Person in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy. No Person shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such Person; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.

 

11.11.     WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

11.12.     Amendments. This Agreement may not be amended, modified, altered or supplemented other than by means of a written instrument duly executed and delivered on behalf of all parties hereto, or, subsequent to Closing, by means of a written instrument duly executed and delivered by the Purchaser, the Selling Shareholder, and the Company.

 

11.13.     Severability. In the event that any provision of this Agreement, or the application of any such provision to any Person or set of circumstances, shall be determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the application of such provision to Persons or circumstances other than those as to which it is determined to be invalid, unlawful, void or unenforceable, shall not be impaired or otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted by law.

 

  

- 43 -

  

11.14.     Entire Agreement. This Agreement and the other agreements referred to herein set forth the entire understanding of the parties hereto relating to the subject matter hereof and thereof and supersede all prior agreements and understandings among or between any of the parties relating to the subject matter hereof and thereof.

 

11.15.     No Third Party Beneficiary. Nothing in this Agreement shall confer any right, remedies or claims upon any Person not a party or permitted assignee of a party to this Agreement.

 

[Remainder of page intentionally left blank]

 

  

- 44 -

  

The parties hereto have caused this Agreement to be executed and delivered as of the date first written above.

 

	 	Silicom Ltd.,
	 	 
	 	By:________________________________
	 	Name:______________________________
	 	Title:_______________________________

 

  

- 45 -

  

 

The parties hereto have caused this Agreement to be executed and delivered as of the date first written above

 

	 	FIBERBLAZE A/S
	 	 
	 	By:________________________________
	 	Name:______________________________
	 	Title:_______________________________

 

SELLING SHAREHOLDERS:

 

	FIBERBLAZE HOLDING APS   	HILMER APS
	 	 
	By:________________________________	
By:________________________________

 

	Name:______________________________	
Name:______________________________

 

	Title:_______________________________	
Title:_______________________________

 

_____________________________________________

Nikolaj Hermann (solely for purposes of sections 3 and 6.11)

 

_____________________________________________

Jakob Hilmer (solely for purposes of sections 3 and 6.11)

 

- 46 -Exhibit 4.1

 

Execution Version

 

LAREDO PETROLEUM, INC.

 

and

 

THE GUARANTORS PARTY HERETO

 

to

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

Trustee

 

INDENTURE

 

Dated as of March 18, 2015

 

SENIOR DEBT SECURITIES

 

 

LAREDO PETROLEUM, INC.

 

Certain Sections of this Indenture relating to Sections 310
 through 318, inclusive, of the Trust Indenture Act of 1939

 

	
Trust Indenture Act Section
    	
 
    	
Indenture Section
    
	
Section 310(a)(1)
    	
 
    	
609
    
	
(a)(2)
    	
 
    	
609
    
	
(a)(3)
    	
 
    	
Not   Applicable
    
	
(a)(4)
    	
 
    	
Not   Applicable
    
	
(b)
    	
 
    	
608
    
	
Section 311(a)
    	
 
    	
613
    
	
(b)
    	
 
    	
613
    
	
Section 312(a)
    	
 
    	
701
    
	
 
    	
 
    	
702
    
	
(b)
    	
 
    	
702
    
	
(c)
    	
 
    	
702
    
	
Section 313(a)
    	
 
    	
703
    
	
(b)
    	
 
    	
703
    
	
(c)
    	
 
    	
703
    
	
(d)
    	
 
    	
703
    
	
Section 314(a)
    	
 
    	
704
    
	
(a)(4)
    	
 
    	
101
    
	
(b)
    	
 
    	
Not   Applicable
    
	
(c)(1)
    	
 
    	
102
    
	
(c)(2)
    	
 
    	
102
    
	
(c)(3)
    	
 
    	
Not   Applicable
    
	
(d)
    	
 
    	
Not   Applicable
    
	
(e)
    	
 
    	
102
    
	
Section 315(a)
    	
 
    	
601
    
	
(b)
    	
 
    	
602
    
	
(c)
    	
 
    	
601
    
	
(d)
    	
 
    	
601
    
	
(e)
    	
 
    	
514
    
	
Section 316(a)
    	
 
    	
101
    
	
(a)(1)(A)
    	
 
    	
502
    
	
 
    	
 
    	
512
    
	
(a)(1)(B)
    	
 
    	
513
    
	
(a)(2)
    	
 
    	
Not   Applicable
    
	
(b)
    	
 
    	
508
    
	
(c)
    	
 
    	
104
    
	
Section 317(a)(1)
    	
 
    	
503
    
	
(a)(2)
    	
 
    	
504
    
	
(b)
    	
 
    	
1003
    
	
Section 318(a)
    	
 
    	
107
    

 

Note:                  This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.

 

i

 

Table of Contents

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I DEFINITIONS AND   OTHER PROVISIONS OF GENERAL APPLICATION
    	
1
    
	
 
    	
 
    	
 
    
	
Section 101.
    	
Definitions
    	
1
    
	
Section 102.
    	
Compliance Certificates and Opinions
    	
9
    
	
Section 103.
    	
Form of Documents Delivered to Trustee
    	
9
    
	
Section 104.
    	
Acts of Holders; Record Dates
    	
10
    
	
Section 105.
    	
Notices, Etc., to Trustee, Company and Guarantors
    	
12
    
	
Section 106.
    	
Notice to Holders; Waiver
    	
13
    
	
Section 107.
    	
Trust Indenture Act Matters
    	
13
    
	
Section 108.
    	
Effect of Headings and Table of Contents
    	
14
    
	
Section 109.
    	
Successors and Assigns
    	
14
    
	
Section 110.
    	
Separability Clause
    	
14
    
	
Section 111.
    	
Benefits of Indenture
    	
14
    
	
Section 112.
    	
Governing Law
    	
14
    
	
Section 113.
    	
Legal Holidays
    	
14
    
	
Section 114.
    	
No Adverse Interpretation of Other Agreements
    	
14
    
	
Section 115.
    	
No Personal Liability of Directors, Officers, Employees and   Stockholders
    	
15
    
	
Section 116.
    	
Language of Notices, Etc.
    	
15
    
	
Section 117.
    	
Force Majeure
    	
15
    
	
Section 118.
    	
Waiver of Jury Trial
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE II SECURITY FORMS
    	
15
    
	
 
    	
 
    
	
Section 201.
    	
Forms Generally
    	
15
    
	
Section 202.
    	
Form of Face of Security
    	
16
    
	
Section 203.
    	
Form of Reverse of Security
    	
18
    
	
Section 204.
    	
Form of Legend for Global Securities
    	
22
    
	
Section 205.
    	
Form of Trustee’s Certificate of Authentication
    	
22
    
	
 
    	
 
    	
 
    
	
ARTICLE III THE SECURITIES
    	
23
    
	
 
    	
 
    
	
Section 301.
    	
Amount Unlimited; Issuable in Series
    	
23
    
	
Section 302.
    	
Denominations
    	
27
    
	
Section 303.
    	
Execution, Authentication, Delivery and Dating
    	
27
    
	
Section 304.
    	
Temporary Securities
    	
29
    
	
Section 305.
    	
Registration, Registration of Transfer and Exchange
    	
29
    
	
Section 306.
    	
Mutilated, Destroyed, Lost and Wrongfully Taken Securities
    	
31
    
	
Section 307.
    	
Payment of Interest; Interest Rights Preserved
    	
32
    
	
Section 308.
    	
Persons Deemed Owners
    	
34
    
	
Section 309.
    	
Cancellation
    	
34
    
	
Section 310.
    	
Computation of Interest
    	
34
    

 

ii

 

	
Section 311.
    	
CUSIP Numbers
    	
34
    
	
 
    	
 
    	
 
    
	
ARTICLE IV SATISFACTION AND   DISCHARGE
    	
34
    
	
 
    	
 
    
	
Section 401.
    	
Satisfaction and Discharge of Indenture
    	
34
    
	
Section 402.
    	
Application of Trust Money
    	
36
    
	
 
    	
 
    	
 
    
	
ARTICLE V REMEDIES
    	
36
    
	
 
    	
 
    	
 
    
	
Section 501.
    	
Events of Default
    	
36
    
	
Section 502.
    	
Acceleration of Maturity; Rescission and Annulment
    	
38
    
	
Section 503.
    	
Collection of Indebtedness and Suits for Enforcement by   Trustee
    	
39
    
	
Section 504.
    	
Trustee May File Proofs of Claim
    	
40
    
	
Section 505.
    	
Trustee May Enforce Claims Without Possession of   Securities
    	
40
    
	
Section 506.
    	
Application of Money Collected
    	
40
    
	
Section 507.
    	
Limitation on Suits
    	
41
    
	
Section 508.
    	
Unconditional Right of Holders to Receive Principal,   Premium and Interest and to Convert
    	
41
    
	
Section 509.
    	
Restoration of Rights and Remedies
    	
41
    
	
Section 510.
    	
Rights and Remedies Cumulative
    	
42
    
	
Section 511.
    	
Delay or Omission Not Waiver
    	
42
    
	
Section 512.
    	
Control by Holders
    	
42
    
	
Section 513.
    	
Waiver of Past Defaults
    	
42
    
	
Section 514.
    	
Undertaking for Costs
    	
43
    
	
Section 515.
    	
Waiver of Usury, Stay or Extension Laws
    	
43
    
	
 
    	
 
    	
 
    
	
ARTICLE VI THE TRUSTEE
    	
43
    
	
 
    	
 
    
	
Section 601.
    	
Certain Duties and Responsibilities
    	
43
    
	
Section 602.
    	
Notice of Defaults
    	
45
    
	
Section 603.
    	
Certain Rights of Trustee
    	
45
    
	
Section 604.
    	
Not Responsible for Recitals or Issuance of Securities
    	
47
    
	
Section 605.
    	
May Hold Securities
    	
47
    
	
Section 606.
    	
Money Held in Trust
    	
47
    
	
Section 607.
    	
Compensation and Reimbursement
    	
47
    
	
Section 608.
    	
Conflicting Interests
    	
48
    
	
Section 609.
    	
Corporate Trustee Required; Eligibility
    	
48
    
	
Section 610.
    	
Resignation and Removal; Appointment of Successor
    	
49
    
	
Section 611.
    	
Acceptance of Appointment by Successor
    	
50
    
	
Section 612.
    	
Merger, Conversion, Consolidation or Succession to Business
    	
51
    
	
Section 613.
    	
Preferential Collection of Claims Against Company
    	
51
    
	
Section 614.
    	
Appointment of Authenticating Agent
    	
51
    
	
 
    	
 
    	
 
    
	
ARTICLE VII HOLDERS’ LISTS   AND REPORTS BY TRUSTEE AND COMPANY
    	
53
    
	
 
    	
 
    
	
Section 701.
    	
Company to Furnish Trustee Names and Addresses of Holders
    	
53
    
	
Section 702.
    	
Preservation of Information; Communications to Holders
    	
53
    
	
Section 703.
    	
Reports by Trustee
    	
54
    

 

iii

 

	
Section 704.
    	
Reports by Company and Guarantors
    	
54
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII CONSOLIDATION,   MERGER, CONVEYANCE, TRANSFER OR LEASE
    	
54
    
	
 
    	
 
    
	
Section 801.
    	
Company May Consolidate, Etc., Only on Certain   Terms
    	
54
    
	
Section 802.
    	
Successor Substituted
    	
55
    
	
 
    	
 
    	
 
    
	
ARTICLE IX SUPPLEMENTAL   INDENTURES
    	
55
    
	
 
    	
 
    
	
Section 901.
    	
Supplemental Indentures Without Consent of Holders
    	
55
    
	
Section 902.
    	
Supplemental Indentures With Consent of Holders
    	
57
    
	
Section 903.
    	
Execution of Supplemental Indentures
    	
58
    
	
Section 904.
    	
Effect of Supplemental Indentures
    	
59
    
	
Section 905.
    	
Conformity with Trust Indenture Act
    	
59
    
	
Section 906.
    	
Reference in Securities to Supplemental Indentures
    	
59
    
	
 
    	
 
    	
 
    
	
ARTICLE X COVENANTS
    	
59
    
	
 
    	
 
    
	
Section 1001.
    	
Payment of Principal, Premium and Interest
    	
59
    
	
Section 1002.
    	
Maintenance of Office or Agency
    	
59
    
	
Section 1003.
    	
Money for Securities Payments to Be Held in Trust
    	
60
    
	
Section 1004.
    	
Corporate Existence
    	
61
    
	
Section 1005.
    	
Statement by Officers as to Default
    	
61
    
	
Section 1006.
    	
Waiver of Certain Covenants
    	
62
    
	
 
    	
 
    	
 
    
	
ARTICLE XI REDEMPTION OF   SECURITIES
    	
62
    
	
 
    	
 
    
	
Section 1101.
    	
Applicability of Article
    	
62
    
	
Section 1102.
    	
Election to Redeem; Notice to Trustee
    	
62
    
	
Section 1103.
    	
Selection by Trustee of Securities to Be Redeemed
    	
63
    
	
Section 1104.
    	
Notice of Redemption
    	
63
    
	
Section 1105.
    	
Deposit of Redemption Price
    	
64
    
	
Section 1106.
    	
Securities Payable on Redemption Date
    	
65
    
	
Section 1107.
    	
Securities Redeemed in Part
    	
65
    
	
Section 1108.
    	
No Limit on Repurchases
    	
65
    
	
 
    	
 
    	
 
    
	
ARTICLE XII SINKING FUNDS
    	
65
    
	
 
    	
 
    
	
Section 1201.
    	
Applicability of Article
    	
65
    
	
Section 1202.
    	
Satisfaction of Sinking Fund Payments with Securities
    	
66
    
	
Section 1203.
    	
Redemption of Securities for Sinking Fund
    	
66
    
	
 
    	
 
    	
 
    
	
ARTICLE XIII DEFEASANCE AND   COVENANT DEFEASANCE
    	
66
    
	
 
    	
 
    
	
Section 1301.
    	
Company’s Option to Effect Defeasance or Covenant   Defeasance
    	
66
    
	
Section 1302.
    	
Defeasance and Discharge
    	
67
    
	
Section 1303.
    	
Covenant Defeasance
    	
67
    

 

iv

 

	
Section 1304.
    	
Conditions to Defeasance or Covenant Defeasance
    	
68
    
	
Section 1305.
    	
Deposited Money and U.S. Government Obligations to Be Held   in Trust; Miscellaneous Provisions
    	
69
    
	
Section 1306.
    	
Reinstatement
    	
70
    
	
 
    	
 
    	
 
    
	
ARTICLE XIV GUARANTEES
    	
70
    
	
 
    	
 
    
	
Section 1401.
    	
Guarantees
    	
70
    

 

v

 

INDENTURE, dated as of March 18, 2015 among Laredo Petroleum, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), having its principal office at 15 West Sixth Street, Suite 900, Tulsa, Oklahoma 74119, the Guarantors (as defined hereinafter), each having its principal office at 15 West Sixth Street, Suite 900, Tulsa, Oklahoma 74119, and Wells Fargo Bank, National Association, as Trustee (herein called the “Trustee”).

 

RECITALS OF THE COMPANY

 

The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness (herein called the “Securities”) to be issued in one or more series as in this Indenture provided.

 

Each of the Initial Guarantors has duly authorized the execution and delivery of this Indenture to provide for the guarantee by such Initial Guarantor of such series of Securities as to which such guarantee has been made applicable as provided herein.

 

All things necessary to make this Indenture a valid agreement of the Company and of the Initial Guarantors in accordance with its terms have been done.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

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

 

ARTICLE I
 DEFINITIONS AND OTHER PROVISIONS
 OF GENERAL APPLICATION

 

Section 101.                       Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

 

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

 

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

 

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

 

(4)                                 unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or a Section, as the case may be, of this Indenture;

 

 

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

 

(6)                                 when used with respect to any Security, the words “convert,” “converted” and “conversion” are intended to refer to the right of the Holder or the Company to convert or exchange such Security into or for securities or other property in accordance with such terms, if any, as may hereafter be specified for such Security as contemplated by Section 301, and these words are not intended to refer to any right of the Holder or the Company to exchange such Security for other Securities of the same series and like tenor pursuant to Section 304, 305, 306, 906 or 1107 or another similar provision of this Indenture, unless the context otherwise requires; and references herein to the terms of any Security that may be converted mean such terms as may be specified for such Security as contemplated in Section 301;

 

(7)                                 unless the context otherwise requires, any reference to “duly provided for” and other words of similar import with respect to any amount or property required to be paid or delivered, as applicable, shall include, without limitation, having made such amount or property available for payment or delivery;

 

(8)                                 references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or rules adopted by the Commission from time to time;

 

(9)                                 when the words “includes” or “including” are used herein, they shall be deemed to be followed by the words “without limitation;” and

 

(10)                          “or” is not exclusive.

 

“Act,” when used with respect to any Holder, has the meaning specified in Section 104.

 

“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 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.

 

“Applicable Procedures” of a Depositary means, with respect to any matter at any time, the policies and procedures of such Depositary, if any, that are applicable to such matter at such time.

 

“Authenticating Agent” means, when used with respect to Securities of any series, any Person authorized by the Trustee to act on behalf of the Trustee to authenticate the Securities of such series.

 

2

 

“Board of Directors” means either the board of directors of the Company (or, if the Company is organized as a limited partnership, the general partner thereof) or any duly authorized committee of that board.

 

“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, and delivered to the Trustee. Where any provision of this Indenture refers to action to be taken pursuant to a Board Resolution (including the establishment of any series of the Securities and the forms and terms thereof), such action may be taken by any officer or employee of the Company authorized to take such action by the Board of Directors as evidenced by a Board Resolution.

 

“Business Day,” when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close; provided that, when used with respect to any Security, “Business Day” may have such other meaning, if any, as may be specified for such Security as contemplated by Section 301.

 

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

 

“Company” means the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.

 

“Company Request” or “Company Order” means a written request or order signed in the name of the Company by any two Officers of the Company.

 

“Corporate Trust Office” means the principal office of the Trustee at which at any particular time its corporate trust business shall be administered and which, at the date hereof, is located at 750 N. Saint Paul Place, Suite 1750, MAC: T9263-170, Dallas, Texas, 75201, Facsimile (214) 756-7401, attention Corporate, Municipal and Escrow Services, or at such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office or any successor Trustee.

 

“corporation” means a corporation, association, company (including a limited liability company), joint-stock company, business trust or other business entity (other than a partnership).

 

“Covenant Defeasance” has the meaning specified in Section 1303.

 

“Defaulted Interest” has the meaning specified in Section 307.

 

“Defeasance” has the meaning specified in Section 1302.

 

3

 

“Depositary” means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, a clearing agency registered under the Exchange Act that is designated to act as depositary for such Securities as contemplated by Section 301.

 

“DTC” has the meaning specified in Section 104.

 

“Event of Default” has the meaning specified in Section 501.

 

“Exchange Act” means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time.

 

“Expiration Date” has the meaning specified in Section 104.

 

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, the Public Company Accounting Oversight Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect from time to time.  All ratio computations based on GAAP contained in this Indenture will be computed in conformity with GAAP.

 

“Global Security” means a Security that evidences all or part of the Securities of any series and bears the legend set forth in Section 204 (or such legend as may be specified as contemplated by Section 301 for such Securities).

 

“Guarantee” means a guarantee of any Securities by a Guarantor as contemplated by Article XIV; provided that the term “Guarantee,” when used with respect to any Security or with respect to the Securities of any series, means a guarantee of such Security or of the Securities of such series, respectively, by a Guarantor of such Security or of the Securities of such series, respectively, as contemplated by Article XIV.

 

“Guarantor” means each of the Initial Guarantors and any other Person who shall have become a Guarantor under this Indenture pursuant to Section 901 hereof, in each case unless and until a successor Person shall have become a successor thereto pursuant to the applicable provisions of this Indenture in place thereof, and thereafter references to such Guarantor shall mean such successor Person; provided that (i) the term “Guarantor,” when used, with respect to the Securities of any series, means the Persons who shall from time to time be the Guarantors of Securities of such series as contemplated by Article XIV; and (ii) any Person constituting a Guarantor with respect to the Securities of a series shall cease to constitute a Guarantor with respect to Securities of such series when its Guarantee is released with respect to Securities of such series in accordance with the terms of this Indenture.

 

“Guarantor’s Board of Directors” means, with respect to any Guarantor, either the board of directors (or other governing body) of such Guarantor (or, if such Guarantor is organized as a limited partnership, the general partner of such Guarantor) or any duly authorized committee of such board (or other governing body).

 

4

 

“Guarantor’s Board Resolution” means, with respect to any Guarantor, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Guarantor to have been duly adopted by such Guarantor’s Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. Where any provision of this Indenture refers to action to be taken pursuant to a Guarantor’s Board Resolution, such action may be taken by any officer or employee of such Guarantor authorized to take such action by such Guarantor’s Board of Directors as evidenced by a Guarantor’s Board Resolution.

 

“Guarantor’s Officers’ Certificate” means, with respect to any Guarantor, a certificate signed by any two of the following: a Chairman of the Board, a Chief Executive Officer, a President, a Vice President, a Treasurer, an Assistant Treasurer, a Secretary or an Assistant Secretary of such Guarantor, or any other officer or officers of such Guarantor designated in a writing by or pursuant to authority of such Guarantor’s Board of Directors and delivered to the Trustee from time to time.

 

“Guarantor Request” or “Guarantor Order” means, with respect to any Guarantor, a written request or order signed in the name of such Guarantor by any two Officers of such Guarantor.

 

“Holder” means a Person in whose name a Security is, at the time of determination, registered in the Security Register.

 

“Indenture” means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. The term “Indenture” shall also include the terms of any particular series or specific Securities within a series and of any Guarantees thereof established as contemplated by Section 301.

 

“Initial Guarantor” or “Initial Guarantors” means Laredo Midstream Services, LLC, a Delaware limited liability company, and Garden City Minerals, LLC, a Delaware limited liability company.

 

“interest,” when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.

 

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

 

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

 

“Notice of Default” means a written notice of the kind specified in Section 501(4).

 

5

 

“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person (or, if such Person is a partnership, the general partner thereof) or any other officer or officers of such Person (or such general partner) designated in a writing by or pursuant to authority of the Board of Directors (if such Person is the Company) or the Guarantor’s Board of Directors with respect to such Guarantor (if such Person is a Guarantor) and delivered to the Trustee from time to time.

 

“Officers’ Certificate” means a certificate signed on behalf of the Company by at least two Officers of the Company, one of whom shall be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 102.

 

“Opinion of Counsel” means a written opinion from legal counsel (who may be an employee of or counsel for the Company or any Affiliate thereof) who is reasonably acceptable to the Trustee that meets the requirements of Section 102.

 

“Original Issue Discount Security” means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502.

 

“Outstanding,” when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:

 

(1)                                 Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

 

(2)                                 Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

 

(3)                                 Securities as to which Defeasance has been effected pursuant to Section 1302;

 

(4)                                 Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a protected purchaser in whose hands such Securities are valid obligations of the Company; and

 

(5)                                 Securities as to which any property deliverable upon conversion thereof has been delivered (or such delivery has been duly provided for), or as to which any other

 

6

 

particular conditions have been satisfied, in each case as may be provided for such Securities as contemplated in Section 301;

 

provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, (A) the principal amount of an Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant to Section 502, (B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 301, (C) the principal amount of a Security denominated in one or more foreign currencies, composite currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of such date in the manner provided as contemplated by Section 301, of the principal amount of such Security (or, in the case of a Security described in Clause (A) or (B) above, of the amount determined as provided in such Clause), and (D) Securities owned by the Company, any Guarantor of the Securities or any other obligor upon the Securities or any Affiliate of the Company or any such Guarantor or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any Guarantor of such Securities or any other obligor upon the Securities or any Affiliate of the Company or a Guarantor of the Securities or such other obligor.

 

“Paying Agent” means any Person authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company.

 

“Person” means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.

 

“Place of Payment,” when used with respect to the Securities of any series and subject to Section 1002, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as contemplated by Section 301.

 

“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or wrongfully taken Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or wrongfully taken Security.

 

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

 

7

 

“Redemption Price,” when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.

 

“Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series, means the date specified for that purpose as contemplated by Section 301.

 

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

 

“Securities” has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.

 

“Securities Act” means the Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time.

 

“Security Register” and “Security Registrar” have the respective meanings specified in Section 305.

 

“Special Record Date” for the payment of any Defaulted Interest, means a date fixed by the Trustee pursuant to Section 307.

 

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

 

“Subsidiary,” with respect to any Person, means any (i) corporation (other than a partnership) of which the outstanding capital stock having a majority of the votes entitled to be cast in the election of directors, managers or trustees of such corporation under ordinary circumstances shall at the time be owned, directly or indirectly, by such Person or any other Person of which a majority of the voting interests under ordinary circumstances is at the time, directly or indirectly, owned by such Person or (ii) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

 

“Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this Indenture was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any 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 instrument 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

 

8

 

then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.

 

“Uniform Commercial Code” means the Uniform Commercial Code in effect in the State of Delaware or the State of New York, as applicable, in each case as amended from time to time.

 

“U.S. Government Obligation” has the meaning specified in Section 1304.

 

“Vice President,” when used with respect to the Company, any Guarantor or the Trustee, means any executive vice president and any senior vice president, whether or not designated by a number or a word or words added before or after the title “executive vice president” or “senior vice president.”

 

Section 102.                       Compliance Certificates and Opinions.  Upon any application or request by the Company or a Guarantor to the Trustee to take any action under any provision of this Indenture, the Company or such Guarantor, as the case may be, shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers’ Certificate, if to be given by an officer of the Company, or a Guarantor’s Officers’ Certificate, if to be given by an officer of any Guarantor, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.

 

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

 

(1)                                 a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

 

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

 

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

 

(4)                                 a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

 

Section 103.                       Form of Documents Delivered to Trustee.  In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

9

 

Any certificate or opinion of an officer of the Company or a Guarantor may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of, or representation by, counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company or such Guarantor, as the case may be, stating that the information with respect to such factual matters is in the possession of the Company or such Guarantor, as the case may be, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

Section 104.                             Acts of Holders; Record Dates. Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent or agents duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company and any Guarantor. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee, the Company and any Guarantor, if made in the manner provided in this Section.

 

Without limiting the generality of this Section, unless otherwise provided in or pursuant to this Indenture, (i) a Holder, including a Depositary or its nominee that is a Holder of a Global Security, may give, make or take, by an agent or agents duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted in or pursuant to this Indenture to be given, made or taken by Holders, and a Depositary or its nominee that is a Holder of a Global Security may duly appoint in writing as its agent or agents members of, or participants in, such Depositary holding interests in such Global Security in the records of such Depositary; and (ii) with respect to any Global Security the Depositary for which is The Depository Trust Company (“DTC”), any consent or other action given, made or taken by an “agent member” of DTC by electronic means in accordance with the Automated Tender Offer Procedures system or other Applicable Procedures of, and pursuant to authorization by, DTC shall be deemed to constitute the “Act” of the Holder of such Global Security, and such Act shall be deemed to have been delivered to the Company, any Guarantor and the Trustee upon the delivery by DTC of an “agent’s message” or other notice of such consent or other action having been so given, made or taken in accordance with the Applicable Procedures of DTC.

 

The fact and date of the execution by any Person of any instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual

 

10

 

signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

 

The ownership of Securities shall be proved by the Security Register.

 

Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company or any Guarantor in reliance thereon, whether or not notation of such action is made upon such Security.

 

With respect to Securities of any series, the Company and, if provided in the terms of any Guarantees of any Guarantor of Securities of such series, any such Guarantor may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of such series entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series, provided that neither the Company nor such Guarantor may set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving, making or taking of any notice, declaration, request or direction referred to in the next paragraph. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to give, make or take the relevant action, whether or not such Holders remain Holders after such record date; provided, however, that no such action shall be effective hereunder unless given, made or taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Company or any such Guarantor from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action given, made or taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is given, made or taken. Promptly after any record date is set pursuant to this paragraph, the Company or such Guarantor, as the case may be, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Sections 105 and 106.

 

The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving, making or taking of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 502, (iii) any request to institute proceedings referred to in Section 507(2) or (iv) any direction referred to in Section 512, in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to give, make or take such notice, declaration, request or

 

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direction, whether or not such Holders remain Holders after such record date; provided, however, that no such action shall be effective hereunder unless given, made or taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action given, made or taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is given, made or taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company and any Guarantor in writing and to each Holder of Securities of the relevant series in the manner set forth in Sections 105 and 106.

 

With respect to any record date set pursuant to this Section, the party hereto which sets such record date may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 106, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto which set such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date to an earlier day as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date.

 

Without limiting the foregoing, a Holder entitled hereunder to give, make or take any action hereunder with regard to any particular Security may do so, in person or by an agent duly appointed in writing, with regard to all or any part of the principal amount of such Security.

 

Section 105.                       Notices, Etc., to Trustee, Company and Guarantors. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee by any Holder or by the Company or any Guarantor shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and delivered in Person, mailed by first class mail (registered or certified, return receipt requested), transmitted by facsimile or sent by overnight courier guaranteeing next Business Day delivery to or with the Trustee addressed to it at its Corporate Trust Office or (2) the Company or a Guarantor by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and delivered in Person, mailed by first class mail (registered or certified, return receipt requested), transmitted by facsimile or sent by overnight courier guaranteeing next Business Day delivery, to or with the Company or such Guarantor, as the case may be, addressed to it at the address of its principal office specified in the first paragraph of this instrument, Attention: Richard C. Buterbaugh, Facsimile: (918) 513-4571 with a copy to Akin Gump Strauss Hauer & Feld, LLP, 1111 Louisiana St., 44th Floor, Houston, Texas 77002, Facsimile: (713) 236-0822, Attention:

 

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Christine B. LaFollette, or at any other address previously furnished in writing to the Trustee by the Company.

 

All requests, demands, authorizations, directions, notices, consents, waivers or Acts of Holders or other such documents made, given, furnished or filed with or to the Trustee, the Company or any Guarantor shall be deemed to have been duly made, given furnished or filed: (i) at the time delivered by hand, if personally delivered; (ii) five calendar days after being deposited in the mail, postage prepaid, if mailed; (iii) when receipt is acknowledged, if telecopied; and (iv) the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next Business Day delivery. Notices given by publication will be deemed given on the first date on which publication is made.

 

Section 106.                       Notice to Holders; Waiver. Where this Indenture provides for notice or other communication to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if given in writing and mailed by first class mail (registered or certified, return receipt requested) or sent by overnight air courier guaranteeing next Business Day delivery, to each Holder affected by such event, at such Holder’s address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice or other communication. Any notice or other communication shall also be so mailed or sent to any Person described in Section 313(c) of the Trust Indenture Act, to the extent required by the Trust Indenture Act. Failure to mail or send a notice or other 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 or sent in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. Where this Indenture provides for notice or other communication in any manner, such notice or other communication may be waived in writing by the Person entitled to receive such notice or other communication, either before or after the event, and such waiver shall be the equivalent of such notice or other communication. Waivers of notice or other communication by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. If the Company mails a notice or communication to the Holders, it shall mail a copy to the Trustee at the same time.

 

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 or other communication by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

 

Where this Indenture provides for notice or other communication with respect to any event to a Holder of a Global Security, such notice or other communication shall be sufficiently given if given to the Depositary for such Security (or its designee), pursuant to its Applicable Procedures, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice or other communication.

 

Section 107.                       Trust Indenture Act Matters. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act which is required under such Act to be a

 

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part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be. Whenever this Indenture refers to a provision of the Trust Indenture Act, the provision is incorporated by reference in and made a part of this Indenture.

 

Section 108.                       Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

Section 109.                       Successors and Assigns. All covenants and agreements in this Indenture and the Securities by the Company and the Trustee and, except as otherwise provided in Section 802 and Section 1401, any Guarantor shall bind their respective successors and assigns, whether so expressed or not.

 

Section 110.                       Separability Clause. In case any provision in this Indenture, or in the Securities (or in any Guarantees endorsed thereon or attached thereto) shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 111.                       Benefits of Indenture. Nothing in this Indenture or in the Securities (or in any Guarantees endorsed thereon or attached thereto), express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture, except as may otherwise be provided pursuant to Section 301 with respect to any Securities of a particular series or under this Indenture with respect to such Securities.

 

Section 112.                       Governing Law. This Indenture, the Guarantees and the Securities and the rights and obligations of the parties hereto and thereto, including the interpretation, construction, validity and enforceability thereof, shall be governed by and construed and interpreted in accordance with the law of the State of New York.

 

Section 113.                       Legal Holidays. In any case where any Interest Payment Date, Redemption Date or Maturity of any Security, or any date on which a Holder has the right to convert his Security, shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities (other than a provision of any Security which specifically states that such provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any), or conversion of such Security need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Maturity, or on such date for conversion, as the case may be.

 

Section 114.                       No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret any other indenture, loan or other agreement of the Company or any Guarantor or any Subsidiaries of the Company or any Guarantor or of any other Person. Any such indenture, loan or other agreement may not be used to interpret this Indenture.

 

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Section 115.                       No Personal Liability of Directors, Officers, Employees and Stockholders. No past, present or future director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, will have any liability for any obligations of the Company or any Guarantor, respectively, under the Securities or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Securities by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities. The waiver may not be effective to waive liabilities under the federal securities laws.

 

Section 116.                       Language of Notices, Etc.. Any request, demand, authorization, direction, notice, consent, waiver, other action or Act provided or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication.

 

Section 117.                       Force Majeure. Subject to Section 601, in no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

Section 118.                       Waiver of Jury Trial. EACH OF THE COMPANY, EACH GUARANTOR AND THE TRUSTEE HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS INDENTURE.

 

ARTICLE II
 SECURITY FORMS

 

Section 201.                       Forms Generally. As to each series of Securities, (i) the Securities of such series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, and (ii) if the Securities of such series are to be guaranteed by the Guarantees of any Guarantor as provided in Section 301 and the terms of such Securities provide for the endorsement thereon or attachment thereto of Guarantees by such Guarantor, such Guarantees to be endorsed on or attached to such Securities shall be in substantially such form as shall be established by or pursuant to a Guarantor’s Board Resolution of such Guarantor or in one or more indentures supplemental hereto, in the case of (i) or (ii), with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor or as may, consistently herewith, be determined by the officers executing such Securities or Guarantees, respectively, as evidenced by their execution thereof. If

 

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the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 303 for the authentication and delivery of such Securities. If the form of any Guarantees by any Guarantor to be endorsed on Securities of any series is established by action taken pursuant to a Guarantor’s Board Resolution of such Guarantor, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of such Guarantor and delivered to the Trustee at or prior to the delivery of the Guarantor Order contemplated by Section 303 for the authentication and delivery of such Securities with such Guarantee endorsed thereon. For purposes hereof, a Guarantee that is endorsed on, or otherwise attached to, a Security shall be deemed “endorsed” on such Security.

 

The definitive Securities and any Guarantees endorsed thereon shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers of the Company executing such Securities or, if such Guarantees by any Guarantor are executed by such Guarantor, by the officers of such Guarantor executing such Guarantees, respectively, as evidenced by their execution of such Securities or, if such  Guarantees by any Guarantor are executed by such Guarantor, by the officers of such Guarantor executing such Guarantees, respectively.

 

Anything herein to the contrary notwithstanding, there shall be no requirement that any Security have endorsed thereon or attached thereto a Guarantee or a notation of a Guarantee, but such a Guarantee or notation of a Guarantee may be endorsed thereon or attached thereto as contemplated by this Section 201.

 

Section 202.                       Form of Face of Security.

 

[Insert any legend required by the Internal Revenue Code and the regulations thereunder.]

 

	
 
    	
 
    	
CUSIP [     ]
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
No.
    	
 
    	
$                    
    	
 
    

 

LAREDO PETROLEUM, INC.

 

LAREDO PETROLEUM, INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to                                     , or registered assigns, the principal sum of                                  Dollars on                                      [if the Security is to bear interest prior to Maturity, insert — , and to pay interest thereon from                          or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on                      and                      in each year, commencing                     , and at the Maturity thereof, at the rate of                     % per annum, until the principal hereof is paid or made available for payment, [if applicable,

 

16

 

insert —, provided that any premium, and any such installment of interest, which is overdue shall bear interest at the rate of                      % per annum (to the extent that the payment of such interest shall be legally enforceable), from the date such overdue amount is due until such amount is paid or duly provided for, and such interest on any overdue amount shall be payable on demand]. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the                      or                      (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest so payable, but not punctually paid or duly provided for, will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Security may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.]]

 

[If the Security is not to bear interest prior to Maturity, insert — The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any overdue premium shall bear interest at the rate of               % per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment. Interest on any overdue principal or premium shall be payable on demand. Any such interest on overdue principal or premium which is not paid on demand shall bear interest at the rate of               % per annum (to the extent that the payment of such interest on interest shall be legally enforceable), from the date of such demand until the amount so demanded is paid or made available for payment. Interest on any overdue interest shall be payable on demand.]

 

Payment of the principal of (and premium, if any) and [if applicable, insert  — any such] interest on this Security will be made at the office or agency of the Company maintained for that purpose in New York, New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, against surrender of this Security in the case of any payment due at the Maturity of the principal thereof or any payment of interest becomes payable on a day other than an Interest Payment Date; provided, however, that if this Security is not a Global Security, (i) payment of interest on an Interest Payment Date will be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register; and all other payments will be made by check against surrender of this Security; (ii) all payments by check will be made in next-day funds (i.e., funds that become available on the day after the check is cashed); and (iii) notwithstanding clauses (i) and (ii) above, with respect to any payment of any amount due on this Security, if this Security is in a denomination of at least $1,000,000 and the Holder hereof at the time of surrender hereof or, in the case of any payment of interest on any Interest Payment Date, the Holder thereof on the related Regular Record Date delivers a written request to the Paying Agent to make such payment by wire transfer at least five Business Days before the date such payment becomes due, together with appropriate wire transfer instructions specifying an account at a bank

 

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in New York, New York, the Company shall make such payment by wire transfer of immediately available funds to such account at such bank in New York City, any such wire instructions, once properly given by a Holder as to this Security, remaining in effect as to such Holder and this Security unless and until new instructions are given in the manner described above and provided further, that notwithstanding anything in the foregoing to the contrary, if this Security is a Global Security, payment shall be made pursuant to the Applicable Procedures of the Depositary as permitted in said Indenture.

 

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly signed manually or by facsimile by its duly authorized officers.

 

	
 
    	
LAREDO   PETROLEUM, INC., a
    
	
 
    	
Delaware   corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Section 203.                       Form of Reverse of Security. This Security is one of a duly authorized issue of senior securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of                                      (herein called the “Indenture”, which term shall have the meaning assigned to it in such instrument), among the Company[, the Guarantors] and Wells Fargo Bank, National Association as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantors, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof [if applicable, insert — limited in aggregate principal amount to $                    ].

 

This Security is the general, unsecured, senior obligation of the Company [if applicable, insert — and is guaranteed pursuant to a guarantee (the “Guarantee”) by [insert name of each Guarantor], and any other Person who shall become such in accordance with the Indenture (the “Guarantors”). The Guarantee by each Guarantor is the general, unsecured, senior obligation of such Guarantor, subject to the release and discharge thereof as provided in the Indenture.]

 

[If applicable, insert — The Securities of this series are subject to redemption upon not less than 30 days’ nor more than 60 days’ notice, at any time [if applicable, insert — on or after

 

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                          , 20    , as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert — on or before                     ,    %, and if redeemed] during the 12-month period beginning                      of the years indicated,

 

	
Year
    	
 
    	
Redemption Price
    	
 
    	
Year
    	
 
    	
Redemption Price
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

and thereafter at a Redemption Price equal to                      % of the principal amount, together in the case of any such redemption with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

 

[If applicable, insert — The Securities of this series are subject to redemption upon not less than 30 nor more than 60 days’ notice by mail, (1) on                          in any year commencing with the year          and ending with the year          through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [if applicable, insert — on or after                         , as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below:  If redeemed during the 12-month period beginning                          of the years indicated,

 

	
Year
    	
 
    	
Redemption Price For Redemption
   Through Operation of the Sinking
   Fund
    	
 
    	
Redemption Price For Redemption
   Otherwise Than Through Operation
   of the Sinking Fund
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

and thereafter] at a Redemption Price equal to           % of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]

 

[If applicable, insert — Notwithstanding the foregoing, the Company may not, prior to                           , redeem any Securities of this series as contemplated by [if applicable, insert —  clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than           % per annum.]

 

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[If applicable, insert — The sinking fund for this series provides for the redemption on                          in each year beginning with the year                and ending with the year              of [if applicable, insert — not less than $                   (“mandatory sinking fund”) and not more than] $                 aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed by the Company otherwise than through [if applicable, insert — mandatory] sinking fund payments may be credited against subsequent [if applicable, insert — mandatory] sinking fund payments otherwise required to be made [if applicable, insert —, in the inverse order in which they become due.]]

 

[If the Security is subject to redemption of any kind, insert — In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]

 

[If applicable, insert — The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security or certain restrictive covenants and Events of Default with respect to this Security, in each case upon compliance with certain conditions set forth in the Indenture.]

 

[If applicable, insert — As provided in the Indenture and subject to certain limitations therein set forth, the obligations of the Company under this Security are guaranteed by each of the Guarantors pursuant to the Indenture [as indicated in the notation of Guarantee endorsed hereon]. The Indenture provides that a Guarantor shall be released from its Guarantee upon compliance with certain conditions.]

 

[If the Security is not an Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.]

 

[If the Security is an Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to — insert formula for determining the amount. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of this series shall terminate.]

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company [if applicable, insert — and the Guarantors] and the rights of the Holders of the Securities to be affected under the Indenture at any time by the Company [if applicable, insert — and the Guarantors] and the Trustee with the consent of the Holders of a majority in principal amount (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities) of all Securities at the time Outstanding to be affected (considered together as one class for this

 

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purpose and such Securities to be affected potentially being Securities of the same or different series and, with respect to any series, potentially comprising fewer than all the Securities of such series), except as may otherwise be provided pursuant to the Indenture for all or any specific Securities of any series. The Indenture also contains provisions (i) permitting the Holders of a majority in principal amount (including waivers obtained in connection with a purchase of, or tender offer or exchange offer for, Securities) of the Securities at the time Outstanding to be affected under the Indenture (considered together as one class for this purpose and such affected Securities potentially being Securities of the same or different series and, with respect to any particular series, potentially comprising fewer than all the Securities of such series), on behalf of the Holders of all Securities so affected, to waive compliance by the Company [if applicable, insert — and the Guarantors] with certain provisions of the Indenture and (ii) permitting the Holders of a majority in principal amount (including waivers obtained in connection with a purchase of, or tender offer or exchange offer for, Securities) of the Securities at the time Outstanding of any series to be affected under the Indenture (with each such series considered separately for this purpose), on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture with respect to such series and their consequences, in the case of Clause (i) or (ii), except as may otherwise be provided pursuant to the Indenture for all or any specific Securities of any series. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver or trustee, or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity reasonably satisfactory to it, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

 

No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed [if applicable, insert — or alter or impair the obligation of each Guarantor, which is absolute and unconditional, to pay pursuant to its Guarantee].

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by

 

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a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

The Securities of this series are issuable only in registered form without coupons in denominations of $2,000 and any integral multiple of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the Company, [if applicable, insert — any Guarantor,] the Trustee and any agent of the Company [if applicable, insert — any Guarantor] or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, [if applicable, insert — any Guarantor,] the Trustee nor any such agent shall be affected by notice to the contrary.

 

[If this Security is a Global Security, insert — This Security is a Global Security and is subject to the provisions of the Indenture relating to Global Securities, including the limitations therein on transfers and exchanges of Global Securities.]

 

This Security and the Indenture [if applicable, insert — (and any Guarantee endorsed hereon or attached hereto)] shall be governed by and construed in accordance with the law of the State of New York.

 

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

Section 204.                       Form of Legend for Global Securities.  Unless otherwise specified as contemplated by Section 301 for the Securities evidenced thereby, every Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form:

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

Section 205.                       Form of Trustee’s Certificate of Authentication.  The Trustee’s certificates of authentication shall be in substantially the following form:

 

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This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.

 

	
Dated:
    	
WELLS   FARGO BANK, NATIONAL ASSOCIATION,
   As Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

ARTICLE III
 THE SECURITIES

 

Section 301.                       Amount Unlimited; Issuable in Series.  The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.

 

The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution, and, subject to Section 303, set forth, or determined in the manner provided, in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series,

 

(1)                                 the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series);

 

(2)                                 any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder);

 

(3)                                 the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest;

 

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

 

(5)                                 the rate or rates at which any Securities of the series shall bear interest, if any, the date or dates from which any such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any such interest payable on any Interest Payment Date;

 

(6)                                 the place or places where the principal of and any premium and interest on any Securities of the series shall be payable and the manner in which any payment may be made;

 

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(7)                                 the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series may be redeemed, in whole or in part, at the option of the Company and, if other than by a Board Resolution, the manner in which any election by the Company to redeem the Securities shall be evidenced;

 

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

 

(9)                                 if other than denominations of $2,000 and any integral multiple of $1,000 in excess thereof, the denominations in which any Securities of the series shall be issuable;

 

(10)                          if the amount of principal of or any premium or interest on any Securities of the series may be determined with reference to an index or pursuant to a formula, the manner in which such amounts shall be determined;

 

(11)                          if other than the currency of the United States of America, the currency, currencies, composite currency, composite currencies or currency units in which the principal of or any premium or interest on any Securities of the series shall be payable and the manner of determining the equivalent thereof in the currency of the United States of America for any purpose, including for the purposes of making payment in the currency of the United States of America and applying the definition of “Outstanding” in Section 101;

 

(12)                          if the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Company or the Holder thereof, in one or more currencies, composite currencies or currency units other than that or those in which such Securities are stated to be payable, the currency, currencies, composite currency, composite currencies or currency units in which the principal of or any premium or interest on such Securities as to which such election is made shall be payable, the periods within which and the terms and conditions upon which such election is to be made and the amount so payable (or the manner in which such amount shall be determined);

 

(13)                          if other than the entire principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502;

 

(14)                          if the principal amount payable at the Stated Maturity of any Securities of the series will not be determinable as of any one or more dates prior to the Stated Maturity, the amount which shall be deemed to be the principal amount of such Securities as of any such date for any purpose thereunder or hereunder, including the principal amount thereof which shall be due and payable upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date prior to the Stated

 

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Maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined);

 

(15)                          if applicable, that the Securities of the series, in whole or any specified part, shall not be defeasible pursuant to Section 1302 or Section 1303 or both such Sections, and, if such Securities may be defeased, in whole or in part, pursuant to either or both such Sections, any provisions to permit a pledge of obligations other than U.S. Government Obligations (or the establishment of other arrangements) to satisfy the requirements of Section 1304(1) for defeasance of such Securities and, if other than by a Board Resolution, the manner in which any election by the Company to defease such Securities shall be evidenced;

 

(16)                          if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any such Global Security in addition to or in lieu of that set forth in Section 204, any addition to, elimination of or other change in the circumstances set forth in Clause (2) of the penultimate paragraph of Section 305 in which any such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof and any other provisions governing exchanges or transfers of any such Global Security;

 

(17)                          any addition to, elimination of or other change in the Events of Default which applies to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 502;

 

(18)                          any addition to, elimination of or other change in the covenants set forth in Article X which applies to Securities of the series;

 

(19)                          any provisions necessary to permit or facilitate the issuance, payment or conversion of any Securities of the series that may be converted into securities or other property other than Securities of the same series and of like tenor, whether in addition to, or in lieu of, any payment of principal or other amount and whether at the option of the Company or otherwise;

 

(20)                          if applicable, that Persons other than those specified in Section 111 shall have such benefits, rights, remedies and claims with respect to any Securities of the series or under this Indenture with respect to such Securities, as and to the extent provided for such Securities;

 

(21)                          any change in the actions permitted or required under this Indenture to be taken by or on behalf of the Holders of the Securities of the series, including any such change that permits or requires any or all such actions to be taken by or on behalf of the Holders of any specific Securities of the series rather than or in addition to the Holders of all Securities of the series;

 

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(22)                          if the Securities of the series are to be guaranteed by any Guarantors, the names of the Guarantors of the Securities of the series (which may, but need not, include any or all of the Initial Guarantors) and the terms of the Guarantees of the Securities of the series, if such terms differ from those set forth in Section 1401, and any deletions from, or modifications or additions to, the provisions of Article XIV or any other provisions of this Indenture in connection with the Guarantees of the Securities of the series;

 

(23)                          any provisions for subordination of any Securities of the series to other indebtedness of the Company (including Securities of other series); and

 

(24)                          any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 901(5)).

 

If the Securities of the series are to be guaranteed by any Guarantor pursuant to Article XIV, there shall be established in or pursuant to a Guarantor’s Board Resolution of such Guarantor and, subject to Section 303, set forth, or determined in the manner provided, in a Guarantor’s Officers’ Certificate of such Guarantor, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of the series, the terms of the Guarantees by such Guarantor with respect to the Securities of the series, if such terms differ from those set forth in Section 1401.

 

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 303) set forth, or determined in the manner provided, in the Officers’ Certificate referred to above or in any such indenture supplemental hereto.  All Securities of any one series need not be issued at the same time and, unless otherwise provided pursuant to this Section 301 for any series, after issuance of Securities of such series, such series may be reopened for issuances of additional Securities of that series.

 

The terms of any Security of a series may differ from the terms of other Securities of the same series, if and to the extent provided pursuant to this Section 301. The matters referenced in any or all of Clauses (1) through (24) above may be established and set forth or determined as aforesaid with respect to all or any specific Securities of a series (in each case to the extent permitted by the Trust Indenture Act).

 

If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate setting forth the terms of the series.

 

If any of the terms of the Guarantees by any Guarantor of the Securities of the series are established by action taken pursuant to a Guarantor’s Board Resolution of such Guarantor, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of such Guarantor and delivered to the Trustee at or prior to the delivery of the Guarantor’s Officers’ Certificate of such Guarantor setting forth the terms of such Guarantees.

 

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Section 302.                       Denominations.  The Securities of each series shall be issuable only in registered form without coupons and only in such denominations as shall be specified as contemplated by Section 301. In the absence of any such specified denomination with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $2,000 and any integral multiple of $1,000 in excess thereof.

 

Section 303.                       Execution, Authentication, Delivery and Dating.  The Securities shall be executed on behalf of the Company by its Chairman of the Board, Chief Executive Officer, President or any Vice President of the Company (or any other officer of the Company designated in writing by or pursuant to authority of the Board of Directors and delivered to the Trustee from time to time). The signature of any of these officers on the Securities may be manual or facsimile.  If the terms of the Securities of any series provide that any Guarantee by any Guarantor is to be endorsed on or otherwise attached to, or made part of, Securities of any series, and if the terms of such Securities provide for the execution of such Guarantee by such Guarantor (it being understood and agreed that the terms of Securities of any series may, but need not, provide for the execution of any Guarantee by any Guarantor), such Guarantee shall be executed on behalf of such Guarantor by the Chairman of the Board, Chief Executive Officer, President or any Vice President of such Guarantor (or any other officer of such Guarantor designated in writing by or pursuant to authority of the Guarantor’s Board of Directors and delivered to the Trustee from time to time).  The signature of any of these officers on any Guarantee may be manual or facsimile.

 

Securities and any Guarantees by any Guarantor endorsed thereon bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company or such Guarantor, as the case may be, shall bind the Company or such Guarantor, as the case may be, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

 

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company, together with, if the terms of such Securities provide for the endorsement thereon of any Guarantees by any Guarantor, such Guarantees endorsed hereon and, if such terms so provide, executed by such Guarantor, to the Trustee for authentication, together with a Company Order and, if any Guarantee by a Guarantor is to be endorsed on such Securities, a Guarantor Order of such Guarantor, for the authentication and delivery of such Securities with any such Guarantees endorsed thereon, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities with any such Guarantees endorsed thereon. If the form or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions or the form or terms of any Guarantees thereof by any Guarantor have been established by or pursuant to one or more Guarantor’s Board Resolutions of such Guarantor as permitted by Sections 201 and 301, in authenticating such Securities with any such Guarantees endorsed thereon, and accepting the additional responsibilities under this Indenture in relation to such Securities and such Guarantees, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating,

 

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(1)                                 if the form of such Securities or any Guarantee by any Guarantor endorsed thereon has been established by or pursuant to Board Resolution or Guarantor’s Board Resolution of such Guarantor, as permitted by Section 201, that such form has been established in conformity with the provisions of this Indenture;

 

(2)                                 if the terms of such Securities or any Guarantee thereof by a Guarantor have been established by or pursuant to Board Resolution or Guarantor’s Board Resolution of such Guarantor as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and

 

(3)                                 that when such Securities with any Guarantees endorsed thereon have been 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, such Securities and such Guarantee will constitute valid and legally binding obligations of the Company or such Guarantor, respectively, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles and subject to any limitation with respect to payments in currency other than U.S. dollars.

 

If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities with any Guarantees endorsed thereon if the issue of such Securities with any Guarantees endorsed thereon pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.

 

Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers’ Certificate or Guarantor’s Officers’ Certificate otherwise required pursuant to Section 301 or the Company Order, any Guarantor Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued.

 

Each Security shall be dated the date of its authentication.

 

No Security, nor any Guarantee endorsed thereon, shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security with any Guarantees endorsed thereon has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.

 

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Wherever herein it shall provide for the Company to execute, and the Trustee to authenticate and deliver, Securities of any series, if the terms of such Securities provide for the endorsement thereon of the Guarantees by any Guarantor, the Company shall cause such Securities so executed by the Company and authenticated and delivered by the Trustee to have such Guarantees endorsed thereon, and, if such terms require such Guarantees to be executed by such Guarantor, such Guarantees to be executed by such Guarantor.

 

Section 304.                       Temporary Securities.  Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order and, if any Guarantees by a Guarantor are so to be endorsed on such Securities, a Guarantor Order of such Guarantor, the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities or Guarantees, respectively, may determine, as evidenced by their execution of such Securities or Guarantees, respectively.

 

If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the Company, and if applicable, the Guarantors shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and tenor.

 

Section 305.                       Registration, Registration of Transfer and Exchange.  The Company shall cause to be kept at each office or agency of the Company designated as a Place of Payment pursuant to the first paragraph of Section 1002 a register (the register, maintained in each such office or agency of the Company designated as a Place of Payment, being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided.

 

Upon surrender for registration of transfer of any Security of a series at the office or agency of the Company in a Place of Payment for that series, the Company and, if applicable, the Guarantors shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount.

 

At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency.

 

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Whenever any Securities are so surrendered for exchange, the Company, and, if applicable, the Guarantors shall execute, and the Trustee shall authenticate and deliver, the Securities, which the Holder making the exchange is entitled to receive.

 

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

 

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

 

No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.

 

If the Securities of any series (or of any series and specified tenor) are to be redeemed in whole or in part, the Company shall not be required (A) to issue, register the transfer of or exchange any Securities of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before the day of selection of any such Securities for redemption under Section 1103 and ending at the close of business on the day of such selection (or during such period as otherwise specified pursuant to Section 301 for such Securities), or (B) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

 

The provisions of Clauses (1), (2), (3) and (4) below shall apply only to Global Securities:

 

(1)                                 Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture.

 

(2)                                 Notwithstanding any other provision in this Indenture, and subject to such applicable provisions, if any, as may be specified as contemplated by Section 301, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (A) such Depositary has notified the Company that it (i) is unwilling or unable to continue as Depositary for such Global Security or (ii) has ceased to be a clearing agency registered under the Exchange Act, or (B) the Company has executed and delivered to the Trustee a Company Order stating that such Global Security shall be exchanged in whole for Securities that are not Global Securities (in which case such exchange shall promptly

 

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be effected by the Trustee). If the Company receives a notice of the kind specified in Clause (A) above or has delivered a Company Order of the kind specified in Clause (B) above, it may, in its sole discretion, designate a successor Depositary for such Global Security within 90 days after receiving such notice or delivery of such order, as the case may be. If the Company designates a successor Depositary as aforesaid, such Global Security shall promptly be exchanged in whole for one or more other Global Securities registered in the name of the successor Depositary, whereupon such designated successor shall be the Depositary for such successor Global Security or Global Securities and the provisions of Clauses (1), (2), (3) and (4) of this provision shall continue to apply thereto.

 

(3)                                 Subject to Clause (2) above and to such applicable provisions, if any, as may be specified as contemplated by Section 301, any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security shall direct.

 

(4)                                 Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Section, Section 304, 306, 906 or 1107 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.

 

Every Person who takes or holds any beneficial interest in a Global Security agrees that:

 

(1)                                 the Company and the Trustee may deal with the Depositary as sole owner of the Global Security and as the authorized representative of such Person;

 

(2)                                 such Person’s rights in the Global Security shall be exercised only through the Depositary and shall be limited to those established by law and agreement between such Person and the Depositary and/or direct and indirect participants of the Depositary;

 

(3)                                 the Depositary and its participants make book-entry transfers of beneficial ownership among, and receive and transmit distributions of principal and interest on the Global Securities to, such Persons in accordance with the Applicable Procedures of the Depositary; and

 

(4)                                 none of the Company, the Trustee nor any agent of the Company or the Trustee will 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 Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

 

Section 306.                       Mutilated, Destroyed, Lost and Wrongfully Taken Securities.  If (a) any mutilated Security is surrendered to the Trustee or (b) both (i) there shall be delivered to the Company and the Trustee (A) a claim by a Holder as to the destruction, loss or wrongful taking of any Security of such Holder and a request thereby for a new replacement Security of the same series, and (B) such indemnity bond as may be required by them to save each of them and any

 

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agent of either of them harmless and (ii) such other reasonable requirements as may be imposed by the Company as permitted by Section 8-405 of the Uniform Commercial Code have been satisfied, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a “protected purchaser” within the meaning of Section 8-405 of the Uniform Commercial Code, the Company, and, if applicable, the Guarantors, shall execute and upon its request the Trustee shall authenticate and deliver, in lieu of any such mutilated, destroyed, lost or wrongfully taken Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously Outstanding.

 

In case any such mutilated, destroyed, lost or wrongfully taken Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.

 

Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

 

Every new Security of any series issued pursuant to this Section in lieu of any destroyed, lost or wrongfully taken Security shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or wrongfully taken Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder.

 

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or wrongfully taken Securities.

 

Section 307.                       Payment of Interest; Interest Rights Preserved.  Except as otherwise provided as contemplated by Section 301 with respect to any Securities of a series, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest (or, if no business is conducted by the Trustee at its Corporate Trust Office on such date, at 5:00 P.M. New York City time on such date).

 

Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below:

 

(1)                                 The Company may elect to make payment of any Defaulted Interest payable on any Securities of a series to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of

 

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Defaulted Interest proposed to be paid on each of such Securities and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given to each Holder of such Securities in the manner set forth in Section 106, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2).

 

(2)                                 The Company may make payment of any Defaulted Interest on any Securities of a series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.

 

Except as may otherwise be provided in this Section 307 or as contemplated in Section 301 with respect to any Securities of a series, the Person to whom interest shall be payable on any Security that first becomes payable on a day that is not an Interest Payment Date shall be the Holder of such Security on the day such interest is paid.

 

Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.

 

In the case of any Security which is converted after any Regular Record Date and on or prior to the next succeeding Interest Payment Date (other than any Security whose Maturity is prior to such Interest Payment Date), interest whose Stated Maturity is on such Interest Payment Date shall be payable on such Interest Payment Date notwithstanding such conversion, and such interest (whether or not punctually paid or duly provided for) shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on such Regular Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any Security which is converted, interest whose Stated Maturity is after the date of conversion of such Security shall not be payable.

 

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Notwithstanding the foregoing, the terms of any Security that may be converted may provide that the provisions of the immediately preceding paragraph do not apply, or apply with such additions, changes or omissions as may be provided thereby, to such Security.

 

Section 308.                       Persons Deemed Owners.  Prior to due presentment of a Security for registration of transfer, the Company, any Guarantor and the Trustee and any agent of the Company, any Guarantor or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Section 307) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, any Guarantor, the Trustee nor any agent of the Company , any Guarantor or the Trustee shall be affected by notice to the contrary.

 

Section 309.                       Cancellation.  All Securities surrendered for payment, redemption, registration of transfer or exchange or conversion or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of in accordance with its retention policy and shall provide the Company with a copy of the cancelled Security upon written request.

 

Section 310.                       Computation of Interest.  Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.

 

Section 311.                       CUSIP Numbers.  The Company, in issuing the Securities may use “CUSIP” and “ISIN” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” and “ISIN” numbers in notices of redemption as a convenience to 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 Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers.  The Company shall promptly notify the Trustee of any change in “CUSIP” or “ISIN” numbers.

 

ARTICLE IV
 SATISFACTION AND DISCHARGE

 

Section 401.                       Satisfaction and Discharge of Indenture.  This Indenture shall upon Company Request cease to be of further effect with respect to the Securities of any series and any Guarantees of such Securities (except as to any surviving rights of conversion, registration of transfer or exchange of any such Security expressly provided for herein or in the terms of such

 

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Security), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to such Securities, when

 

(1)                                 either

 

(A)                               all such Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or wrongfully taken and which have been replaced or paid as provided in Section 306 and (ii) Securities for the payment of which 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 1003) have been delivered to the Trustee for cancellation; or

 

(B)                               all such Securities not theretofore delivered to the Trustee for cancellation

 

(i)                                     have become due and payable, or

 

(ii)                                  will become due and payable at their Stated Maturity within one year, or

 

(iii)                               are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,

 

and the Company or, if applicable, a Guarantor, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for such purpose money in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;

 

(2)                                 the Company or Guarantor has paid or caused to be paid all other sums payable hereunder by the Company and the Guarantors with respect to such Securities;

 

(3)                                 no event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such Securities or any other Securities (other than such an event or Event of Default with respect to such Securities resulting solely from the incurrence of indebtedness or other borrowing of funds, or the grant of liens securing such indebtedness or other borrowing, all or a portion of which are to be applied to such deposit) shall have occurred and be continuing at the time of such deposit;

 

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

 

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(5)                                 the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture with respect to such Securities have been complied with.

 

Notwithstanding the satisfaction and discharge of this Indenture with respect to Securities of any series, the obligations of the Company to the Trustee under Section 607, the obligations of the Trustee to any Authenticating Agent under Section 614, and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section with respect to such Securities, the obligations of the Company of such series under Section 1002 and the obligations of the Trustee under Section 402, Section 606 and the last paragraph of Section 1003 with respect to such Securities shall survive such satisfaction and discharge.

 

Section 402.                       Application of Trust Money.  Subject to the provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 with respect to Securities of any series shall be held in trust and applied by it, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with the Trustee. All moneys deposited with the Trustee pursuant to Section 401 (and held by it or any Paying Agent) for the payment of Securities subsequently converted shall be returned to the Company upon Company Request, to the extent originally deposited by the Company. The Company may direct by a Company Order the investment of any money deposited with the Trustee pursuant to Section 401, without distinction between principal and income, in (1) United States Treasury Securities with a maturity of one year or less or (2) a money market fund that invests solely in short term United States Treasury Securities and from time to time the Company may direct the reinvestment of all or a portion of such money in other securities or funds meeting the criteria specified in Clause (1) or (2) of this sentence.

 

ARTICLE V
 REMEDIES

 

Section 501.                       Events of Default.

 

Except as may otherwise be provided pursuant to Section 301 for all or any specific Securities of any series, “Event of Default,” wherever used herein with respect to the Securities of that series, means any one of the following events (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):

 

(1)                                 default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or

 

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(2)                                 default in the payment of the principal of or any premium on any Security of that series at its Maturity; or

 

(3)                                 default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series and continuance of such default for a period of 60 days; or

 

(4)                                 default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or

 

(5)                                 the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days (provided that, if any Person becomes the successor to the Company pursuant to Article VIII and such Person is a corporation, partnership or trust organized and validly existing under the law of a jurisdiction outside the United States, each reference in this Clause (5) to an applicable Federal or State law of a particular kind shall be deemed to refer to such law or any applicable comparable law of such non-U.S. jurisdiction, for as long as such Person is the successor to the Company hereunder and is so organized and existing); or

 

(6)                                 the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its

 

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inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action (provided that, if any Person becomes the successor to the Company pursuant to Article VIII and such Person is a corporation, partnership or trust organized and validly existing under the law of a jurisdiction outside the United States, each reference in this Clause (6) to an applicable Federal or State law of a particular kind shall be deemed to refer to such law or any applicable comparable law of such non-U.S. jurisdiction, for as long as such Person is the successor to the Company hereunder and is so organized and existing); or

 

(7)                                 if Article XIV has been made applicable with respect to such Securities, the Guarantee of the Securities of such series by any Guarantor shall for any reason cease to be, or shall for any reason be asserted in writing by such Guarantor or the Company not to be, in full force and effect and enforceable in accordance with its terms, except to the extent contemplated or permitted by this Indenture or by the terms of the Securities of such series established pursuant to Section 301; or

 

(8)                                 any other Event of Default provided with respect to Securities of that series in accordance with Section 301.

 

Section 502.                       Acceleration of Maturity; Rescission and Annulment.  Except as may otherwise be provided pursuant to Section 301 for all or any specific Securities of any series, if an Event of Default (other than an Event of Default specified in Section 501(5) or 501(6)) with respect to Securities of that series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount of all the Securities of that series (or, in the case of any Security of that series which specifies an amount to be due and payable thereon upon acceleration of the Maturity thereof, such amount as may be specified by the terms thereof) to be due and payable immediately, by a notice in writing to the Company and any Guarantor of the Securities of that series (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount), together with any accrued and unpaid interest thereon, shall become immediately due and payable. Except as may otherwise be provided pursuant to Section 301 for all or any specific Securities of any series, if an Event of Default specified in Section 501(5) or Section 501(6) with respect to Securities of that series at the time Outstanding occurs, the principal amount of all the Securities of that series (or, in the case of any Security of that series which specifies an amount to be due and payable thereon upon acceleration of the Maturity thereof, such amount as may be specified by the terms thereof), together with any accrued and unpaid interest thereon, shall automatically, and without any declaration or other action on the part of the Trustee or any Holder, become immediately due and payable.

 

Except as may otherwise be provided pursuant to Section 301 for all or any specific Securities of any series, at any time after such a declaration of acceleration with respect to Securities of that series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company, any Guarantor of the Securities of that series and the Trustee, may rescind and annul such declaration and its consequences if

 

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(1)                                 the Company or any such Guarantor has paid or deposited with the Trustee a sum sufficient to pay

 

(A)                               all overdue interest on all Securities of that series,

 

(B)                               the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities,

 

(C)                               to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and

 

(D)                               all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

 

(2)                                 all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513.

 

No such rescission shall affect any subsequent default or impair any right consequent thereon.

 

Section 503.                       Collection of Indebtedness and Suits for Enforcement by Trustee.  The Company covenants that if

 

(1)                                 default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 60 days, or

 

(2)                                 default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof,

 

the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

 

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Section 504.                       Trustee May File Proofs of Claim.  In case of any judicial proceeding relative to the Company , any Guarantor or any other obligor upon the Securities, their property or their creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. The Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under the Indenture out of the estate in any such proceeding, 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, money, securities and other properties that the holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise.

 

No provision of this Indenture 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 the Securities or any Guarantee 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; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.

 

Section 505.                       Trustee May Enforce Claims Without Possession of Securities.  All rights of action and claims under this Indenture or the Securities or any Guarantee may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

 

Section 506.                       Application of Money Collected. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation thereon of 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 607;

 

SECOND:  To the payment of the amounts then due and unpaid for principal of and any premium and interest on the Securities in respect of which or for the benefit of which such

 

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money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any premium and interest, respectively; and

 

THIRD:  To the payment of the remainder, if any, to the Company, any Guarantor or to whomsoever may be lawfully entitled to receive the same as a court of competent jurisdiction may direct.

 

Section 507.                       Limitation on Suits.  No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless

 

(1)                                 such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series;

 

(2)                                 the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

 

(3)                                 such Holder or Holders have offered to the Trustee indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request;

 

(4)                                 the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

 

(5)                                 no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series;

 

it being understood and intended that no one or more of such 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 of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.

 

Section 508.                       Unconditional Right of Holders to Receive Principal, Premium and Interest and to Convert.  Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 307) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date), and, if the terms of such Security so provide, to convert such Security in accordance with its terms, and to institute suit for the enforcement of any such payment and, if applicable, any such right to convert, and such rights shall not be impaired without the consent of such Holder.

 

Section 509.                       Restoration of Rights and Remedies.  If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such

 

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proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, any Guarantors, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

 

Section 510.                       Rights and Remedies Cumulative.  Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or wrongfully taken Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 511.                       Delay or Omission Not Waiver.  No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

Section 512.                       Control by Holders.  The Holders of a majority in principal amount of the Outstanding Securities of any series 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 the Securities of such series, provided that

 

(1)                                 such direction shall not be in conflict with any rule of law or with this Indenture;

 

(2)                                 the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction; and

 

(3)                                 subject to the provisions of Section 601, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall determine that the proceeding so directed would involve the Trustee in personal liability.

 

Section 513.                       Waiver of Past Defaults.  Except as may otherwise be provided pursuant to Section 301 for all or any specific Securities of any series, the Holders of not less than a majority in principal amount (including waivers obtained in connection with a purchase of, or tender offer or exchange offer for, Securities) of the Outstanding Securities of any series to be affected under this Indenture may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default

 

(1)                                 in the payment of the principal of or any premium or interest on any Security of such series, or

 

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(2)                                 in respect of a covenant or provision hereof which under Article IX cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.

 

Upon any such waiver with respect to any series, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, with respect to such series for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. A waiver of any past default and its consequences given by or on behalf of any Holder of Securities in connection with a purchase of, or tender or exchange offer for, such Holder’s Securities will not be rendered invalid by such purchase, tender or exchange.

 

Section 514.                       Undertaking for Costs.  In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess costs, including reasonable attorneys’ fees and expenses, against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company, any Guarantor or the Trustee or, if applicable, in any suit for the enforcement of the right to convert any Security in accordance with its terms.

 

Section 515.                       Waiver of Usury, Stay or Extension Laws.  The Company and each Guarantor covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company and each Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

ARTICLE VI
 THE TRUSTEE

 

Section 601.                       Certain Duties and Responsibilities.

 

(a)  Except during the continuance of an Event of Default,

 

(1)                                 the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and as are provided by the Trust Indenture Act, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(2)                                 in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any

 

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provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture.

 

(b)  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.

 

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

 

(1)                                 this Subsection shall not be construed to limit the effect of the first paragraph of this Section;

 

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

 

(3)                                 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 a majority in principal amount of the Outstanding Securities of any series, determined as provided in Section 512, 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 with respect to the Securities of such series; and

 

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

 

(d)  Whether or not therein expressly so 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)                                  No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability.  The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.

 

(f)                                   Money held in trust by the Trustee need not be segregated from other funds and need not be held in an interest-bearing account, in each case except to the extent required by law or by any other provision of this Indenture.  The Trustee (acting in any capacity hereunder) shall

 

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not be liable for interest on any money received by it hereunder unless the Trustee otherwise agrees in writing with the Company.

 

Section 602.                       Notice of Defaults.  If an Event of Default occurs and is continuing hereunder with respect to Securities of any series, and if it is known to the Trustee, the Trustee shall mail to the Holders of Securities of such series notice of such Event of Default within 90 days after the Trustee gains knowledge of such Event of Default unless such Event of Default shall have been cured or waived before the giving of such notice. Except in the case of an Event of Default in payment of principal of, premium or interest on Securities of any series, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Securities of such series.

 

Section 603.                       Certain Rights of Trustee.  Subject to the provisions of Section 601:

 

(1)                                 the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

(2)                                 any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any request or direction of a Guarantor mentioned herein shall be sufficiently evidenced by a Guarantor Request or Guarantor Order of such Guarantor, and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution and any resolution of a Guarantor’s Board of Directors may be sufficiently evidenced by a Guarantor’s Board Resolution;

 

(3)                                 whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) shall be entitled to receive and may, in the absence of bad faith on its part, conclusively rely upon, and shall not be liable for any action it takes or omits to take in good faith in reliance upon, an Officers’ Certificate or, if such matter relates to a Guarantor, a Guarantor’s Officers’ Certificate of such Guarantor or an Opinion of Counsel;

 

(4)                                 the Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;

 

(5)                                 the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

 

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(6)                                 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, note, other evidence of indebtedness 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 and, if applicable, the Guarantors, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation;

 

(7)                                 the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder and shall not be responsible for the supervision of officers and employees of such agents or attorneys;

 

(8)                                 the Trustee may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded;

 

(9)                                 the Trustee shall not be liable for any action taken, suffered or omitted to be taken which it believes in good faith to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

 

(10)                          except with respect to an Event of Default under Sections 501(1) and 501(2), the Trustee shall not be deemed to have notice of any Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture; and

 

(11)                          the rights, privileges, protections, immunities and benefits given to the Trustee, including its rights to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder.

 

(12)                          in no event shall the Trustee be liable for special, punitive, indirect or consequential damages, including but not limited to lost profits, irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action arising in connection with the Indenture;

 

(13)                          any action taken, or omitted to be taken, by the Trustee in good faith pursuant to the documents upon the request or authority or consent of any person who, at the time of making such request or giving such authority or consent, is the holder of any

 

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Security shall be conclusive and binding upon all future holders of Securities and upon Securities executed and delivered in exchange therefore or in place thereof; and

 

(14)                          under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Securities.

 

Section 604.                       Not Responsible for Recitals or Issuance of Securities.  The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and the Trustee does not assume any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof.

 

Section 605.                       May Hold Securities.  The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company or any Guarantor, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company or any Guarantor with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent.

 

Section 606.                       Money Held in Trust.  Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Company or any Guarantor.

 

Section 607.                       Compensation and Reimbursement.

 

(a)                                 The Company shall pay to the Trustee (in its capacity as Trustee, and, to the extent it has been appointed as such, as Paying Agent and Security Registrar) from time to time reasonable compensation for its acceptance of this Indenture and services hereunder in accordance with a written schedule provided by the Trustee to the Company.  The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Company shall reimburse the Trustee promptly upon request for all reasonable and customary disbursements, advances and reasonable out-of-pocket expenses incurred or made by it in addition to the compensation for its services, except those resulting from its own negligent action, negligent failure to act or willful misconduct.  Such expenses shall include the reasonable and customary compensation, disbursements and expenses of the Trustee’s agents and counsel. The obligation of the Company to pay foregoing compensation and reimbursement shall survive the payment in full or defeasance of the Securities or the removal or resignation of the Trustee.

 

(b)                                 The Company shall indemnify the Trustee in its capacity against any and all losses, liabilities or reasonable out-of-pocket expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 607) and defending itself against any claim (whether asserted by either of the Company or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be

 

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attributable to its negligence or willful misconduct.  The Trustee shall notify the Company promptly of any claim for which it may seek indemnity.  Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder.  The Company shall defend the claim and the Trustee shall cooperate in the defense.  The Trustee may elect to have separate counsel defend the claim, but the Company shall be obligated to pay the reasonable fees and expenses of such separate counsel only if the Company fails to assume the Trustee’s defense or there is a conflict of interest between the Company, on the one hand, and the Trustee, on the other hand, with respect to the claim, as reasonably determined by the Trustee.  The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.  None of the Company nor the Guarantors need reimburse the Trustee for any expense or indemnity against liability or loss of the Trustee to the extent such expense, liability or loss is found by a court of competent jurisdiction in a non-appealable judgment to have resulted from the negligence or willful misconduct of the Trustee.

 

(c)                                  As security for the performance of the obligations of the Company under this Section the Trustee shall have a lien prior to the Securities of any series upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of (and premium, if any) or interest on Securities of such series. Such lien shall survive satisfaction and discharge of this Indenture.

 

(d)                                 Without limiting any rights available to the Trustee under applicable law, when the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 501(5) or Section 501(6), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable Federal or State bankruptcy, insolvency or other similar law.

 

(e)                                  The provisions of this Section shall survive the termination of this Indenture.

 

Section 608.                       Conflicting Interests.  If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. To the extent permitted by the Trust Indenture Act, the Trustee shall not be deemed to have a conflicting interest by virtue of being a trustee under this Indenture with respect to Securities of more than one series.

 

Section 609.                       Corporate Trustee Required; Eligibility.  There shall at all times be one (and only one) Trustee hereunder with respect to the Securities of each series, which may be Trustee hereunder for Securities of one or more other series. Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such, has a combined capital and surplus of at least $50,000,000 and has its Corporate Trust Office in the continental United States of America. If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, 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 with respect to the Securities of any series 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.

 

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Section 610.                       Resignation and Removal; Appointment of Successor.  No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611.

 

The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 60 days after the giving of such notice of resignation, the resigning Trustee may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of a notice of removal pursuant to this paragraph, the Trustee being removed may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

If at any time:

 

(1)                                 the Trustee shall fail to comply with Section 608 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or

 

(2)                                 the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request therefor by the Company or by any such Holder, or

 

(3)                                 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 any such case, (A) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (B) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.

 

If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611. If an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee

 

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within 30 days after the giving of such notice of removal, the Trustee being removed may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.

 

The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.

 

Section 611.                       Acceptance of Appointment by Successor.  In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company, any Guarantor and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder.

 

In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company , any Guarantor, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one

 

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Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

 

Upon request of any such successor Trustee, the Company and any Guarantor shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be.

 

No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.

 

Section 612.                       Merger, Conversion, Consolidation or Succession to Business.  Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

 

Section 613.                       Preferential Collection of Claims Against Company.  If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).

 

Section 614.                       Appointment of Authenticating Agent.  The Trustee may appoint an Authenticating Agent or Agents with respect to any series of Securities which shall be authorized to act on behalf of the Trustee to authenticate the Securities of such Series issued upon original issue and upon exchange, registration of transfer, partial conversion or partial redemption or pursuant to Section 306, and Securities of such series so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder.  Wherever reference is made in this Indenture to the authentication and delivery of Securities of such series by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by

 

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an Authenticating Agent so appointed with respect to such series and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent so appointed with respect to such series. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority.  If such Authenticating Agent publishes reports of condition at least annually pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent 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 an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section.

 

Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee, the Company, the Authenticating Agent or such successor corporation.

 

An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company.  The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof 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 such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent with respect to any series of Securities which shall be acceptable to the Company and shall give notice of such appointment to all Holders of Securities of such series in the manner provided in Section 106.  Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent.  No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section.

 

The Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section, and the Trustee shall be entitled to be reimbursed by the Company for such payments, subject to the provisions of Section 607.

 

If an appointment is made pursuant to this Section with respect to Securities of any series, the Securities of such series may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternate certificate of authentication in the following form:

 

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This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture.

 

	
 
    	
WELLS FARGO BANK, NATIONAL ASSOCIATION,
    
	
 
    	
 
    	
as   Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By   [NAME OF AUTHENTICATING AGENT],
    
	
 
    	
 
    	
as Authenticating Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized   Signatory
    

 

ARTICLE VII
 HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

 

Section 701.                       Company to Furnish Trustee Names and Addresses of Holders.  The Company and any Guarantor will furnish or cause to be furnished to the Trustee

 

(1)                                 semi-annually, not later than March 15 and September 15 in each year, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities of each series as of the immediately preceding March 1 and September 1 as the case may be, and

 

(2)                                 at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company or such Guarantor, respectively, of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;

 

excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar.

 

Section 702.                       Preservation of Information; Communications to Holders.  The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished.

 

The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.

 

Every Holder of Securities, by receiving and holding the same, agrees with the Company , any Guarantor and the Trustee that neither of the Company nor the Guarantors (if applicable) nor the Trustee nor any agent of any of them shall be held accountable by reason of any

 

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disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.

 

Section 703.                       Reports by Trustee.  The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto.

 

Reports so required to be transmitted at stated intervals of not more than 12 months shall be transmitted no later than April 15 and shall be dated as of April 1 in each calendar year, commencing in 2016.

 

A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company and any Guarantor. The Company and any Guarantor will notify the Trustee when any Securities are listed on any stock exchange and of any delisting thereof.

 

Section 704.                       Reports by Company and Guarantors.  The Company and any Guarantor shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act, if any, at the times and in the manner provided pursuant to such Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act need not be filed with the Trustee until the 15th day after the same are actually filed with the Commission. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the compliance by the Company or any Guarantor with any of their covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates or Guarantor’s Officers’ Certificates, as the case may be).

 

ARTICLE VIII
 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

Section 801.                       Company May Consolidate, Etc., Only on Certain Terms.  The Company shall not, in a single transaction or a series of related transactions, consolidate with or merge into any other Person or sell, convey, transfer or lease all or substantially all its properties and assets to any Person, and the Company shall not permit any Person to consolidate with or merge into the Company, unless:

 

(1)                                 in case the Company shall consolidate with or merge into another Person or sell, convey, transfer or lease all or substantially all its properties and assets to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by sale, conveyance or transfer, or which leases, all or substantially all the properties and assets of the Company shall be a corporation, partnership or trust, shall be organized and validly existing under the laws of the United States, any state thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form reasonably

 

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satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed and, for each Security that by its terms provides for conversion, shall have provided for the right to convert such Security in accordance with its terms;

 

(2)                                 immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or any Subsidiary as a result of such transaction as having been incurred by the Company or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and

 

(3)                                 the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, sale, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

 

Section 802.                       Successor Substituted.  Upon any consolidation of the Company with, or merger of the Company into, any other Person or any sale, conveyance, transfer or lease of all or substantially all the properties and assets of the Company in accordance with Section 801, the successor Person formed by such consolidation or into which the Company is merged or to which such sale, conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

ARTICLE IX
 SUPPLEMENTAL INDENTURES

 

Section 901.                       Supplemental Indentures Without Consent of Holders.  Except as may otherwise be provided pursuant to Section 301 for all or any specific Securities of any series, without the consent of any Holders, the Company, when authorized by a Board Resolution, each of the Guarantors, when authorized by a Guarantor’s Board Resolution of such Guarantor, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

 

(1)                                 to evidence the succession of another Person to the Company or a Guarantor and the assumption by any such successor of the covenants of the Company or such Guarantor herein and in the Securities or the Guarantees of such Guarantor, as the case may be; or

 

(2)                                 to add to the covenants of the Company or any Guarantor for the benefit of the Holders of all or any Securities of any series (and if such covenants are to be for the benefit of less than all Securities of such series, stating that such covenants are expressly

 

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being included solely for the benefit of such Securities within such series) or to surrender any right or power herein conferred upon the Company or any Guarantor with regard to all or any Securities of any series (and if any such surrender is to be made with regard to less than all Securities of such series, stating that such surrender is expressly being made solely with regard to such Securities within such series); or

 

(3)                                 to add any additional Events of Default for the benefit of the Holders of all or any Securities of any series (and if such additional Events of Default are to be for the benefit of less than all Securities of such series, stating that such additional Events of Default are expressly being included solely for the benefit of such Securities within such series); or

 

(4)                                 to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of Securities in uncertificated form; or

 

(5)                                 to add to, change or eliminate any of the provisions of this Indenture in respect of all or any Securities of any series or any Guarantees thereof (and if such addition, change or elimination is to apply with respect to less than all Securities of such series or Guarantees thereof, stating that it is expressly being made to apply solely with respect to such Securities within such series or Guarantees thereof), provided that any such addition, change or elimination (A) shall neither (i) apply to any Security of any series or Guarantee thereof created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of any such Security with respect to such provision or (B) shall become effective only when there is no such Security Outstanding; or

 

(6)                                 to secure the Securities or any Guarantees; or

 

(7)                                 to establish the form or terms of all or any Securities of any series and any Guarantees thereof as permitted by Sections 201 and 301; or

 

(8)                                 to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611; or

 

(9)                                 to add to or change any of the provisions of this Indenture with respect to any Securities that by their terms may be converted into securities or other property other than Securities of the same series and of like tenor, in order to permit or facilitate the issuance, payment or conversion of such Securities; or

 

(10)                          to add any Person as an additional Guarantor under this Indenture, to add additional Guarantees or additional Guarantors in respect of any Outstanding Securities under this Indenture, or to evidence the release and discharge of any Guarantor from its

 

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obligations under its Guarantees of any Securities and its obligations under this Indenture in respect of any Securities in accordance with the terms of this Indenture; or

 

(11)                          to conform the text of this Indenture or any Securities or any Guarantee endorsed thereon to any provision of the “Description of the Notes” (or comparable) section in any offering memorandum, prospectus or prospectus supplement of the Company prepared from time to time after the date of this Indenture with respect to the offer and sale of Securities of any series, to the extent that such provision was intended to be a verbatim recitation of a provision of this Indenture, the Securities or such Guarantee; or

 

(12)                          to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this Clause (12) shall not adversely affect the interests of the Holders of Securities of any series in any material respect.

 

The Trustee is hereby authorized to join with the Company and the Guarantors in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Section 902.                       Supplemental Indentures With Consent of Holders.  Except as may otherwise be provided pursuant to Section 301 for all or any specific Securities of any series or Guarantees thereof, with the consent of the Holders of a majority in principal amount (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities) of the Outstanding Securities of all series affected by such supplemental indenture (considered together as one class for this purpose and such affected Securities potentially being Securities of the same or different series and, with respect to any series, potentially comprising fewer than all the Securities of such series), by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, each of the Guarantors when authorized by a Guarantor’s Board Resolution of such Guarantor, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture or any Guarantees of such Securities; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, Securities),

 

(1)                                 change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security or any other Security which would be due and payable upon a declaration of acceleration of the Maturity

 

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thereof pursuant to Section 502, or permit the Company to redeem any Security if, absent such supplemental indenture, the Company would not be permitted to do so, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or

 

(2)                                 if any Security provides that the Holder may require the Company to repurchase or convert such Security, impair such Holder’s right to require repurchase or conversion of such Security on the terms provided therein, or

 

(3)                                 reduce the percentage in principal amount of the Outstanding Securities of any one or more series (considered separately or together as one class, as applicable, and whether comprising the same or different series or less than all the Securities of a series), the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or

 

(4)                                 if any Security is guaranteed by the Guarantee of any Guarantor, release such Guarantor from any of its obligations under such Guarantee except in accordance with the terms of this Indenture, or

 

(5)                                 modify any of the provisions of this Section, Section 513 or Section 1006, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; provided, however, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to “the Trustee” and concomitant changes in this Section and Section 1006, or the deletion of this proviso, in accordance with the requirements of Sections 611 and 901(8).

 

A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular Securities or series of Securities, or which modifies the rights of the Holders of such Securities or series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of any other Securities or of any other series, as applicable.

 

It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. A consent to any indenture supplemental hereto by or on behalf of any Holder of Securities given in connection with a purchase of, or tender or exchange offer for, such Holder’s Securities will not be rendered invalid by such purchase, tender or exchange.

 

Section 903.                       Execution of Supplemental Indentures.  In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to

 

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receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel and Officers’ Certificate and Guarantor’s Officers’ Certificate, as the case may be, stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Section 904.                       Effect of Supplemental Indentures.  Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

 

Section 905.                       Conformity with Trust Indenture Act.  Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.

 

Section 906.                       Reference in Securities to Supplemental Indentures.  Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and, if applicable, the Guarantors and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.

 

ARTICLE X
 COVENANTS

 

Section 1001.                Payment of Principal, Premium and Interest.  The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any premium and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture.

 

Section 1002.                Maintenance of Office or Agency.  The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange, where Securities may be surrendered for conversion and where notices and demands to or upon the Company or any Guarantor in respect of the Securities of that series 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 of the Trustee, and the Company and each Guarantor hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

 

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The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company 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.

 

With respect to any Global Security, and except as otherwise may be specified for such Global Security as contemplated by Section 301, the Corporate Trust Office of the Trustee shall be the Place of Payment where such Global Security may be presented or surrendered for payment or for registration of transfer or exchange, or where successor Securities may be delivered in exchange therefor, provided, however, that any such payment, presentation, surrender or delivery effected pursuant to the Applicable Procedures of the Depositary for such Global Security shall be deemed to have been effected at the Place of Payment for such Global Security in accordance with the provisions of this Indenture.

 

Section 1003.                Money for Securities Payments to Be Held in Trust.  If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.

 

Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, on or prior to 12:30 P.M., New York City time, on each due date of the principal of or any premium or interest on any Securities of that series, deposit (or, if the Company has deposited any trust funds with a trustee pursuant to Section 1304(1), cause such trustee to deposit) with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.

 

The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will (1) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2) during the continuance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series.

 

The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the

 

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Trustee, such Paying Agent shall be released from all further liability with respect to such money.

 

Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the Company on Company Request (or if deposited by a Guarantor, paid to such Guarantor on Guarantor Request), or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company or such Guarantor, as the case may be, for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, shall, at the expense of the Company, cause to be published once, in The New York Times or The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company, or the applicable Guarantor as the case may be.

 

Section 1004.     Corporate Existence. Subject to Article VIII, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights (charter and statutory), licenses and franchises; provided, however, that the Company will not be required to preserve any such right, license or franchise if it shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company.

 

Section 1005.     Statement by Officers as to Default.

 

(a)  The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers’ Certificate, stating that a review of the activities of the Company during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture with respect to the Securities of each series Outstanding and further stating, as to each such Officer signing such certificate, that to the best of such Officer’s actual knowledge, the Company has kept, observed, performed and fulfilled its obligations under this Indenture with respect to Securities of such series and is not in default in the performance and observance of any of the material terms, provisions and conditions of this Indenture with respect to Securities of such series, in each case, so as not to result in any default or Event of Default with respect to Securities of such series (or, if a default or Event of Default with respect to Securities of such series shall have occurred and be continuing, describing all such defaults or Events of Default of which such Officer may have knowledge and what action the Company is taking or propose to take with respect thereto).

 

(b)  So long as any Securities of a series to which Article XIV has been made applicable are Outstanding, each Guarantor with respect to Securities of such series Outstanding shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, a Guarantor’s Officers’ Certificate with respect to such Guarantor, stating

 

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that a review of the activities of such Guarantor during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether such Guarantor has kept, observed, performed and fulfilled its obligations under this Indenture with respect to the Securities of such series and further stating, as to each such Officer signing such certificate, that to the best of such Officer’s actual knowledge, such Guarantor has kept, observed, performed and fulfilled its obligations under this Indenture with respect to Securities of such series and is not in default in the performance and observance of any of the material terms, provisions and conditions of this Indenture with respect to Securities of such series, in each case, so as not to result in any default or Event of Default with respect to Securities of such series (or, if a default or Event of Default with respect to Securities of such series shall have occurred and be continuing, describing all such defaults or Events of Default of which such Officer may have knowledge and what action such Guarantor is taking or proposes to take with respect thereto).

 

Section 1006.     Waiver of Certain Covenants.  Except as otherwise provided pursuant to Section 301 for all or any Securities of any series, the Company may, with respect to all or any Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in Section 1004 or in any covenant provided pursuant to Section 301(18), 901(2), 901(6) or 901(7) for the benefit of the Holders of such series or in Article VIII if, before the time for such compliance, the Holders of a majority in principal amount (including waivers obtained in connection with a purchase of, or tender offer or exchange offer for, Securities) of all Outstanding Securities affected by such waiver (considered together as one class for this purpose and such affected Securities potentially being Securities of the same or different series and, with respect to any particular series, potentially comprising fewer than all the Securities of such series) shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. A waiver of compliance given by or on behalf of any Holder of Securities in connection with a purchase of, or tender or exchange offer for, such Holder’s Securities will not be rendered invalid by such purchase, tender or exchange.

 

ARTICLE XI
 REDEMPTION OF SECURITIES

 

Section 1101.     Applicability of Article.  Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for such Securities) in accordance with this Article.

 

Section 1102.     Election to Redeem; Notice to Trustee.  The election of the Company to redeem any Securities shall be established in or pursuant to a Board Resolution or in another manner specified as contemplated by Section 301 for such Securities. In case of any redemption at the election of the Company of less than all the Securities of any series (including any such redemption affecting only a single Security), the Company shall, at least 5 Business Days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of

 

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such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of Securities (1) prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, or (2) pursuant to an election of the Company that is subject to a condition specified in the terms of the Securities of the series to be redeemed, the Company shall furnish the Trustee with an Officers’ Certificate evidencing compliance with such restriction or condition. Redemptions may be conditioned upon the occurrence of conditions precedent with respect to the redemption.

 

Section 1103.     Selection by Trustee of Securities to Be Redeemed.  If less than all the Securities of any series are to be redeemed (unless all the Securities of such series and of a specified tenor are to be redeemed or unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 40 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Security of such series, provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. If less than all the Securities of such series and of a specified tenor are to be redeemed (unless such redemption affects only a single Security), the particular Securities to be redeemed shall be selected not more than 40 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not previously called for redemption in accordance with the preceding sentence.

 

If any Security selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as it may be) to be the portion selected for redemption. Securities which have been converted during a selection of Securities to be redeemed shall be treated by the Trustee as Outstanding for the purpose of such selection.

 

The Trustee shall promptly notify the Company and each Security Registrar in writing of the Securities selected for redemption as aforesaid and, in case of any Securities selected for partial redemption as aforesaid, the principal amount thereof to be redeemed.

 

The provisions of the two preceding paragraphs shall not apply with respect to any redemption affecting only a single Security, whether such Security is to be redeemed in whole or in part. In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.

 

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.

 

Section 1104.     Notice of Redemption.  Notice of redemption shall be given in the manner provided in Section 106 not less than 30 days nor more than 60 days prior to the Redemption Date (or within such period as otherwise specified as contemplated by Section 301 for the

 

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relevant Securities), to each Holder of Securities to be redeemed, at his address appearing in the Security Register.

 

All notices of redemption shall identify the Securities to be redeemed (including CUSIP numbers, if any) and shall state:

 

(1)           the Redemption Date,

 

(2)           the Redemption Price,

 

(3)           if less than all the Outstanding Securities of any series consisting of more than a single Security are to be redeemed, the identification (and, in the case of partial redemption of any such Securities, the principal amounts) of the particular Securities to be redeemed and, if less than all the Outstanding Securities of any series consisting of a single Security are to be redeemed, the principal amount of the particular Security to be redeemed,

 

(4)           that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date,

 

(5)           the place or places where each such Security is to be surrendered for payment of the Redemption Price,

 

(6)           any conditions precedent for the redemption, if any,

 

(7)           for any Securities that by their terms may be converted, the terms of conversion, the date on which the right to convert the Security to be redeemed will terminate and the place or places where such Securities may be surrendered for conversion, and

 

(8)           that the redemption is for a sinking fund, if such is the case.

 

Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company.

 

Section 1105.     Deposit of Redemption Price.  Prior to 11:00 A.M., New York City time, on any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date, other than any Securities called for redemption on that date which have been converted prior to the date of such deposit.

 

If any Security called for redemption is converted, any money deposited with the Trustee or with any Paying Agent or so segregated and held in trust for the redemption of such Security shall (subject to any right of the Holder of such Security or any Predecessor Security to receive

 

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interest as provided in the last paragraph of Section 307 or in the terms of such Security) be paid to the Company upon Company Request or, if then held by the Company, shall be discharged from such trust.

 

Section 1106.     Securities Payable on Redemption Date.  Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest or unless the conditions for the redemption have been satisfied) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together with accrued interest to the Redemption Date; provided, however, that, unless otherwise specified as contemplated by Section 301, installments of interest whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307.

 

If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.

 

Section 1107.     Securities Redeemed in Part.  Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company, and, if applicable, the Guarantors shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered.

 

Section 1108.     No Limit on Repurchases.  Nothing in this Indenture or the Securities shall prohibit or limit the right of the Company or any Affiliate of the Company to repurchase Securities from time to time at any price in open market purchases or private transactions at negotiated prices, by tender offer or otherwise, in each case without any notice to or consent by Holders.  Any Securities purchased by the Company or any Affiliate of the Company may, to the extent permitted by law and at the discretion of the Company, be held, resold or delivered to the Trustee for cancellation.  Any such Securities delivered to the Trustee for cancellation may not be resold and shall be disposed of as directed by Company Order.

 

ARTICLE XII
 SINKING FUNDS

 

Section 1201.     Applicability of Article.  The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified as contemplated by Section 301 for such Securities.

 

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The minimum amount of any sinking fund payment provided for by the terms of any Securities is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of such Securities is herein referred to as an “optional sinking fund payment.” If provided for by the terms of any Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities as provided for by the terms of such Securities.

 

Section 1202.     Satisfaction of Sinking Fund Payments with Securities.  The Company (1) may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been converted in accordance with their terms or which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to any Securities of such series required to be made pursuant to the terms of such Securities as and to the extent provided for by the terms of such Securities; provided that the Securities to be so credited have not been previously so credited. The Securities to be so credited shall be received and credited for such purpose by the Trustee at the Redemption Price, as specified in the Securities so to be redeemed (or at such other prices as may be specified for such Securities as contemplated in Section 301), for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

 

Section 1203.     Redemption of Securities for Sinking Fund.  Not less than 45 days (or such shorter period as shall be satisfactory to the Trustee) prior to each sinking fund payment date for any Securities, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered. Not less than 30 days prior to each such sinking fund payment date, the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1106 and 1107.

 

ARTICLE XIII
 DEFEASANCE AND COVENANT DEFEASANCE

 

Section 1301.     Company’s Option to Effect Defeasance or Covenant Defeasance.  Unless otherwise designated pursuant to Section 301(15), the Securities of any series of Securities shall be subject to defeasance or covenant defeasance pursuant to such Section 1302 or 1303, in accordance with any applicable requirements provided pursuant to Section 301 and upon compliance with the conditions set forth below in this Article. The Company may elect, at its option, at any time, to have Section 1302 or Section 1303 applied to any Securities or any series of Securities so subject to defeasance or covenant defeasance. Any such election shall be

 

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evidenced by a Board Resolution or in another manner specified as contemplated by Section 301 for such Securities.

 

Section 1302.     Defeasance and Discharge.  Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, the Company shall be deemed to have been discharged from its obligations with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 1304 are satisfied (hereinafter called “Defeasance”). For this purpose, such Defeasance means that the Company and the Guarantors of the Securities shall be deemed to have paid and discharged the entire indebtedness represented by such Securities and to have satisfied all their other respective obligations under such Securities and this Indenture insofar as such Securities or such Guarantees are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), subject to the following which shall survive until otherwise terminated or discharged hereunder: (1) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 1304(1) and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when payments are due, or, if applicable, to convert such Securities in accordance with their terms, (2) the obligations of the Company and the Guarantors of the Securities of such series with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, and, if applicable, their obligations with respect to the conversion of such Securities, (3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (4) this Article. Subject to compliance with this Article, the Company may exercise its option (if any) to have this Section applied to any Securities notwithstanding the prior exercise of its option (if any) to have Section 1303 applied to such Securities.  Upon the effectiveness of Defeasance with respect to any series of Securities, each Guarantor of the Securities of such series shall (except as provided in clause (2) of the next preceding sentence) be automatically and unconditionally released and discharged from all of its obligations under its Guarantee of the Securities of such series and all of its other obligations under this Indenture in respect of the Securities of such series, without any action by the Company, any Guarantor or the Trustee and without the consent of the Holders of any Securities.

 

Section 1303.     Covenant Defeasance.  Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, (1) the Company shall be released from its obligations under Section 1004 and any covenants provided pursuant to Section 301(18), 901(2), 901(6) or 901(7) for the benefit of the Holders of such Securities and (2) the occurrence of any event specified in Sections 501(4) (with respect to Section 1004 and any such covenants provided pursuant to Section 301(18), 901(2), 901(6) or 901(7)) and 501(8) shall be deemed not to be or result in an Event of Default, in each case with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 1304 are satisfied (hereinafter called “Covenant Defeasance”). For this purpose, such Covenant Defeasance means that, with respect to such Securities, the Company and any Guarantor may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section (to the extent so specified in the case of Section 501(4)), whether directly or indirectly by reason of any reference elsewhere herein to any such Section or by reason of any reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture and such Securities and any Guarantees thereof shall be unaffected thereby.

 

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Section 1304.     Conditions to Defeasance or Covenant Defeasance.  The following shall be the conditions to the application of Section 1302 or Section 1303 to any Securities or any series of Securities, as the case may be:

 

(1)           The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee which satisfies the requirements contemplated by Section 609 and agrees to comply with the provisions of this Article applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders of such Securities, (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, in the opinion of a nationally recognized firm of accountants or nationally recognized investment banking firm, not later than one day before the due date of any payment, money in an amount, or (C) such other obligations or arrangements as may be specified as contemplated by Section 301 with respect to such Securities, or (D) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants or nationally recognized investment banking firm expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of and any premium and interest on such Securities on the respective Stated Maturities, in accordance with the terms of this Indenture and such Securities. As used herein, “U.S. Government Obligation” means (x) any security which is (i) a direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation which is specified in Clause (x) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt.

 

(2)           In the event of an election to have Section 1302 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this instrument, there has been a change in the applicable Federal income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same

 

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manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur.

 

(3)           In the event of an election to have Section 1303 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur.

 

(4)           The Company shall have delivered to the Trustee an Officers’ Certificate to the effect that neither such Securities nor any other Securities of the same series, if then listed on any securities exchange, will be delisted as a result of such deposit.

 

(5)           No event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such Securities or any other Securities (other than such an event or Event of Default with respect to such Securities resulting solely from the incurrence of indebtedness or other borrowing of funds, or the grant of liens securing such indebtedness or other borrowing, all or a portion of which are to be applied to such deposit) shall have occurred and be continuing at the time of such deposit.

 

(6)           Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument (other than this Indenture insofar as such Securities are concerned) to which the Company is a party or by which it is bound.

 

(7)           The Company shall have delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of such Securities over the other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company.

 

(8)           The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with.

 

Section 1305.     Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions.  Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee (solely for purposes of this Section and Section 1306, the Trustee and any such other trustee are referred to collectively as the “Trustee”) pursuant to Section 1304 in respect of any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any such Paying Agent (including the Company acting as its own Paying Agent or any Guarantor of the Securities of the applicable series or any Subsidiary or Affiliate of the Company or any such Guarantor acting as Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal

 

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and any premium and interest, but money and U.S. Government Obligations so held in trust need not be segregated from other funds except to the extent required by law.

 

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 1304 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities.

 

Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 1304 with respect to any Securities which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such Securities.

 

Section 1306.     Reinstatement.  If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article with respect to any Securities by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the respective obligations under this Indenture and such Securities and, if applicable, Guarantees of such Securities from which the Company and the applicable Guarantors have been discharged or released pursuant to Section 1302 or 1303 shall be revived and reinstated as though no deposit had occurred pursuant to this Article with respect to such Securities, until such time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 1305 with respect to such Securities in accordance with this Article; provided, however, that if the Company or any Guarantor makes any payment of principal of or any premium or interest on any such Security following such reinstatement of its obligations, the Company or such Guarantor, as the case may be, shall be subrogated to the rights (if any) of the Holders of such Securities to receive such payment from the money so held in trust.

 

ARTICLE XIV
  GUARANTEES

 

Section 1401.     Guarantees.  Securities of any series that are to be guaranteed by the Guarantees of any Guarantors shall be guaranteed by such Guarantors as shall be established pursuant to Section 301 with respect to the Securities of such series.  The Persons who shall initially be the Guarantors of the Securities of any such series may, but need not, include any or all of the Initial Guarantors and may include any and all such other Persons as the Company may determine; provided that, prior to the authentication and delivery upon original issuance of Securities that are to be guaranteed by a Person that is not an Initial Guarantor, the Company, the Trustee and such Person shall enter into a supplemental indenture pursuant to Section 901 hereof whereby such Person shall become a Guarantor under this Indenture.

 

Securities of any series that are to be guaranteed by the Guarantees of any Guarantors shall be guaranteed in accordance with the terms of such Guarantees as established pursuant to Section 301 with respect to such Securities and such Guarantees thereof and (except as otherwise

 

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specified as contemplated by Section 301 for such Securities and such Guarantees thereof) in accordance with this Article.

 

Each Guarantor of any Security hereby fully and unconditionally guarantees to each Holder of such Security, and to the Trustee on behalf of such Holder, the due and punctual payment of the principal of, and premium, if any, and interest, if any, on such Security when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, in accordance with the terms of such Security and of this Indenture. In case of the failure of the Company punctually to make any such payment, such Guarantor hereby agrees to cause such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Company.

 

The Guarantor of any Security hereby agrees that its obligations hereunder shall be absolute and unconditional irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of such Security or this Indenture, any failure to enforce the provisions of such Security or this Indenture, or any waiver, modification or indulgence granted to the Company with respect thereto, by the Holder of such Security or the Trustee or any other circumstance which may otherwise constitute a legal or equitable discharge or defense of a surety or guarantor; provided, however, that, notwithstanding the foregoing, no such waiver, modification or indulgence shall, without the consent of any Guarantor, increase the principal amount of such Security, or increase the interest rate thereon, change any redemption provisions thereof (including any change to increase any premium payable upon redemption thereof) or change the Stated Maturity of any payment thereon, or increase the principal amount of any Original Issue Discount Security that would be due and payable upon a declaration of acceleration or the maturity thereof pursuant to Section 502 of this Indenture.

 

The Guarantor of any Security hereby waives the benefits of diligence, presentment, demand for payment, any requirement that the Trustee or any of the Holders exhaust any right or take any action against the Company or any other Person, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to any Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that its obligations hereunder will not be discharged in respect of such Security except by complete performance of the obligations of such Guarantor contained in such Security and in this Indenture. Any Guarantee of any Guarantor hereunder shall constitute a guaranty of payment and not of collection. The Guarantor of any Security hereby agrees that, in the event of a default in payment of principal, or premium, if any, or interest, if any, on such Security, whether at its Stated Maturity, by declaration of acceleration, call for redemption or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Security, subject to the terms and conditions set forth in this Indenture, directly against such Guarantor to enforce the obligation of such Guarantor hereunder without first proceeding against the Company.

 

The obligations of the Guarantor of any Security hereunder with respect to such Security shall be continuing and irrevocable until the date upon which the entire principal of, premium, if

 

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any, and interest, if any, on such Security has been, or has been deemed pursuant to the provisions of Article Four of this Indenture to have been, paid in full or otherwise discharged.

 

The Guarantor of any Security shall be subrogated to all rights of the Holders of such Security against the Company in respect of any amounts paid by the Guarantor on account of such Security pursuant to the provisions of this Indenture; provided, however, that such Guarantor shall not be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until the principal of, and premium, if any, and interest, if any, on all Securities issued hereunder that are due and payable shall have been paid in full.

 

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

 

No Guarantor shall consolidate with or merge into any other Person or sell, convey or transfer all or substantially all its properties and assets to any Person, and no Guarantor shall permit any Person to consolidate with or merge into such Guarantor, in each case in a transaction in which the successor Person formed by such consolidation or merger or to which such sale, conveyance or transfer is made is an Affiliate of the Company, and no Guarantor shall lease all or substantially all its properties and assets to any Person (whether or not such an Affiliate), unless, in any such case:

 

(1)           in case such Guarantor shall consolidate with or merge into another Person or sell, convey, transfer or lease all or substantially all its properties and assets to any Person, the Person formed by such consolidation or into which such Guarantor is merged or the Person which acquires by sale, conveyance or transfer, or which leases, all or substantially all the properties and assets of such Guarantor shall be a corporation, partnership or trust, shall be organized and validly existing under the laws of the United States, any state thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, the performance or observance of every covenant of this Indenture and any Guarantees on the part of such Guarantor to be performed or observed;

 

(2)           immediately after giving effect to such transaction no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and

 

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(3)           such Guarantor has delivered to the Trustee a Guarantor’s Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, sale, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.

 

Upon any consolidation of any Guarantor with, or merger of such Guarantor into, any other Person or any sale, conveyance, transfer or lease of all or substantially all the properties and assets of such Guarantor in accordance with this paragraph, the successor Person formed by such consolidation or into which such Guarantor is merged or to which such sale, conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, such Guarantor under this Indenture with the same effect as if such successor Person had been named as such Guarantor herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and any Guarantees of such Guarantor.

 

Upon (i) a consolidation or merger of any Guarantor with or into, or a sale, conveyance or transfer of all or substantially all the properties and assets of any Guarantor to, any other Person or any consolidation or merger of any Person with or into any Guarantor, in each case in a transaction in which the successor Person formed by such consolidation or merger or to which such sale, conveyance or transfer is made is not an Affiliate of the Company or (ii) any sale, conveyance or transfer (including by way of merger) by the Company or any Subsidiary thereof of all or substantially all the capital stock of any Guarantor to any Person that is not an Affiliate of the Company, such Guarantor shall be deemed to be automatically and unconditionally released and discharged from all its obligations under its Guarantees and under this Article XIV with respect to Securities of all series without any further action required on the part of the Trustee or any Holder. The Trustee shall deliver an appropriate instrument evidencing such release and discharge upon receipt of a Company Request accompanied by an Officers’ Certificate certifying as to the compliance with this paragraph of Section 1401. The Company may, at its option, at any time and from time to time, cause any Guarantor  to be automatically and unconditionally released and discharged from all its obligations under its Guarantees with respect to Securities of any series guaranteed by Guarantees of such Guarantor and under this Article XIV upon (i) any conditions for such release provided with respect to Securities of such series in accordance with Section 301 having been satisfied and (ii) delivery by the Company to the Trustee of a Company Order relating to such release and discharge. The Trustee shall deliver an appropriate instrument evidencing such release and discharge upon receipt of a Company Request accompanied by an Officers’ Certificate certifying as to the compliance with this paragraph of Section 1401.

 

Anything in this Indenture, the Securities or any Guarantee to the contrary notwithstanding, the obligations of any Guarantor under its Guarantees and this Indenture shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor, result in the obligations of such Guarantor under its Guarantees and this Indenture not constituting a fraudulent advance or fraudulent transfer under any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal, state or other law affecting the rights of creditors generally.

 

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No Guarantee by any Guarantor of any Security, whether or not such Guarantee is or is to be endorsed thereon, shall be valid and obligatory for any purpose with respect to such Security until the certificate of authentication on such Security shall have been signed by or on behalf of the Trustee.

 

This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Delivery of an executed counterpart of this Indenture by facsimile or electronic transmission shall be equally as effective as delivery of an original executed counterpart of this Indenture. Any party delivering an executed counterpart of this Indenture by facsimile or electronic transmission also shall deliver an original executed counterpart of this Indenture, but failure to deliver an original executed counterpart shall not affect the validity, enforceability and binding effect of this Indenture.

 

The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. 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 opens an account with the Trustee. The parties agree that they provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. PATRIOT Act.

 

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

 

	
 
    	
LAREDO   PETROLEUM, INC.,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Richard C. Buterbaugh
    
	
 
    	
 
    	
Name:
    	
Richard   C. Buterbaugh
    
	
 
    	
 
    	
Title:
    	
Executive   Vice President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LAREDO   MIDSTREAM SERVICES, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Richard C. Buterbaugh
    
	
 
    	
 
    	
Name:
    	
Richard   C. Buterbaugh
    
	
 
    	
 
    	
Title:
    	
Executive   Vice President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GARDEN   CITY MINERALS, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Richard C. Buterbaugh
    
	
 
    	
 
    	
Name:
    	
Richard   C. Buterbaugh
    
	
 
    	
 
    	
Title:
    	
Executive   Vice President and Chief Financial Officer
    

 

Signature Page to Base Indenture

 

 

	
 
    	
WELLS   FARGO BANK, NATIONAL

ASSOCIATION,   as trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Patrick T. Giordano
    
	
 
    	
 
    	
Name:
    	
Patrick   T. Giordano
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

Signature Page to Base Indenture

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