LITE 8-K
Lumentum Holdings Inc. (LITE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CURRENT REPORT
Pursuant to Section 13 or 15(d)
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading |
Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01. | Entry into a Material Definitive Agreement. |
Purchase Agreement
On June 13, 2023, Lumentum Holdings Inc. (the “Company”) entered into a purchase agreement (the “Purchase Agreement”) with Goldman Sachs & Co. LLC, as representative of the Initial Purchasers named in Schedule I thereto (the “Initial Purchasers”), to issue and sell to the Initial Purchasers $525 million aggregate principal amount of 1.50% Convertible Senior Notes due 2029 (the “Notes”), in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The Notes will be issued to the Initial Purchasers pursuant to an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act. In addition, the Company granted the Initial Purchasers a 13-day option to purchase up to an additional $78.75 million aggregate principal amount of the Notes on the same terms and conditions, which was exercised in full on June 14, 2023. A total of $603.75 million aggregate principal amount of Notes were issued on June 16, 2023. The aggregate principal amount of the offering was increased from the previously announced offering size of $500 million (or $575 million if the Initial Purchasers exercised their option to purchase additional Notes in full).
The net proceeds from the sale of the Notes were approximately $598.2 million, after deducting the Initial Purchasers’ discount and the estimated offering expenses payable by the Company. The Company has used a portion of the net proceeds of the offering to (i) repurchase approximately $125 million aggregate principal amount of its 0.250% Convertible Senior Notes due 2024 using approximately $132.8 million of the net proceeds of the offering, and (ii) purchase approximately $125 million of its common stock, in each case, concurrently with the pricing of the offering in privately negotiated transactions effected through one of the Initial Purchasers or its affiliate, as its agent. The Company intends to use the remaining net proceeds of the offering for general corporate purposes, which may include the repayment or repurchase of its indebtedness, including any of its existing convertible notes, capital expenditures, working capital and potential acquisitions.
The Purchase Agreement includes customary representations, warranties and covenants by the Company and customary closing conditions. Under the terms of the Purchase Agreement, the Company has agreed to indemnify the Initial Purchasers against certain liabilities, including liabilities under the Securities Act.
The description of the Purchase Agreement contained herein is qualified in its entirety by reference to the Purchase Agreement that is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Indenture
On June 16, 2023, the Company entered into an indenture relating to the issuance of the Notes (the “Indenture”), by and between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The Notes will bear interest at a rate of 1.50% per year, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2023. The Notes will mature on December 15, 2029, unless earlier redeemed, repurchased by the Company or converted pursuant to their terms.
The initial conversion rate is 14.3808 shares of common stock per $1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately $69.54 per share). The conversion rate will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (as defined in the Indenture) or the Company’s issuance of a notice of redemption, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Notes in connection with such make-whole fundamental change or notice of redemption.
Prior to the close of business on the business day immediately preceding September 15, 2029, the Notes will be convertible at the option of the holder thereof only under the following circumstances: (1) during any fiscal quarter commencing after September 30, 2023 (and only during such fiscal quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the applicable conversion price on each applicable trading day; (2) during the five consecutive
business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Notes for each trading day of such measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on each such trading day; (3) if the Company calls any or all of the Notes for redemption, at any time prior to the close of business on the second business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after September 15, 2029 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time. Upon conversion, the Company will satisfy its conversion obligation in cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election.
The Company may redeem for cash all or any portion of the Notes, at its option (subject to the partial redemption limitation set forth below), on or after June 22, 2026, if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Notes. If the Company elects to redeem fewer than all of the outstanding Notes, at least $100.0 million aggregate principal amount of the Notes must be outstanding and not subject to redemption as of the redemption notice date. Upon the occurrence of a fundamental change (as defined in the Indenture), holders may require the Company to repurchase all or a portion of their Notes for cash at a price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
The Notes are the Company’s senior unsecured obligations, will rank equally with all of the Company’s existing and future senior unsecured indebtedness, including the Company’s outstanding 0.250% Convertible Senior Notes due 2024, the Company’s outstanding 0.50% Convertible Senior Notes due 2026, and the Company’s outstanding 0.50% Convertible Senior Notes due 2028, and will rank senior in right of payment to any indebtedness that is expressly subordinated to the Notes. The Notes will also be effectively subordinated to all of the Company’s existing and future secured indebtedness (to the extent of the value of the assets securing such indebtedness) and structurally subordinated to all existing and future liabilities (including trade payables) of the Company’s subsidiaries.
The following events are considered “events of default” under the Indenture, which may result in the acceleration of the maturity of the Notes:
| (1) | default by the Company in any payment of interest on any Note when due and payable and the default continues for a period of 30 days; |
| (2) | default by the Company in the payment of principal of any Note (including the fundamental change repurchase price or redemption price, if applicable) when due and payable on the maturity date, upon redemption, upon any required repurchase, upon declaration of acceleration or otherwise; |
| (3) | failure by the Company to comply with its obligation to convert the Notes in accordance with the Indenture upon exercise of a holder’s conversion right and such failure continues for a period of five business days; |
| (4) | failure by the Company to give (i) a fundamental change notice (as described in the Indenture) when due, and such failure continues for five business days or (ii) a notice of a specified corporate transaction (described in the Indenture) when due with respect to the Notes and such failure continues for a period of two business days; |
| (5) | failure by the Company to comply with its obligations under the Indenture with respect to a consolidation, merger or sale of assets of the Company; |
| (6) | failure by the Company to comply with any of its other agreements contained in the Notes or Indenture for a period of 60 days after written notice from the Trustee or the holders of at least 25% in principal amount of the Notes then outstanding; |
| (7) | default by the Company or any of its significant subsidiaries (as defined in the Indenture) with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of $75,000,000 (or its foreign currency equivalent at the time) in the aggregate of the Company and/or any such subsidiary (i) resulting in such indebtedness becoming or being declared due and payable or (ii) constituting a failure to pay the principal (or any unpaid interest that is due in connection with any failure to pay any such principal in excess of $75,000,000) of any such indebtedness when due and payable at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise, and, in the case of clauses (i) and (ii), such acceleration shall not, after the expiration of any applicable grace period, have been rescinded or annulled or such failure to pay or default shall not have been cured or waived, or such indebtedness is not paid or discharged, as the case may be, within 30 calendar days after written notice to the Company by the Trustee or to the Company and the Trustee by holders of at least 25% in aggregate principal amount of Notes then outstanding in accordance with the Indenture; or |
| (8) | certain events of bankruptcy, insolvency, or reorganization of the Company or any of its significant subsidiaries. |
If such an event of default occurs and is continuing (other than an event of default described in clause (8) above), the Trustee by notice to the Company, or the holders of at least 25% in principal amount of the then-outstanding Notes by notice to the Company and the Trustee, may declare 100% of the principal of, and accrued and unpaid interest, if any, on all the Notes to be due and payable. In the event that an event of default of a type described in clause (8) shall occur and be continuing, 100% of the principal of, and accrued and unpaid interest on the Notes will automatically become due and payable.
The summary of the foregoing transactions is qualified in its entirety by reference to the Indenture and the Form of 1.50% Convertible Senior Notes due 2029, that are attached as Exhibits 4.1 and 4.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
The Initial Purchasers or their affiliates, have engaged in, and may in the future engage in, other commercial dealings with the Company or its affiliates in the ordinary course of business. They have received, or may in the future receive, customary fees and commissions for those transactions.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.
| Item 3.02. | Unregistered Sales of Equity Securities. |
The information set forth in Item 1.01 above is incorporated by reference into this Item 3.02.
| Item 8.01. | Other Events. |
Launch Press Release
On June 12, 2023, the Company issued a press release announcing its intention to offer $500 million aggregate principal amount of the Notes in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Pricing Press Release
On June 13, 2023, the Company issued a press release announcing the upsize and pricing of its offering of $525 million aggregate principal amount of the Notes in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act. A copy of the press release is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit Number |
Description of Exhibit | |
| 4.1 | Indenture, dated June 16, 2023, between Lumentum Holdings Inc. and U.S. Bank Trust Company, National Association. | |
| 4.2 | Form of 1.50% Convertible Senior Note due 2029 (included in Exhibit 4.1). | |
| 10.1 | Purchase Agreement, dated as of June 13, 2023, between Lumentum Holdings Inc. and Goldman Sachs & Co. LLC, as representative of the Initial Purchasers named in Schedule I thereto. | |
| 99.1 | Launch Press Release, dated June 12, 2023. | |
| 99.2 | Pricing Press Release, dated June 13, 2023. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL). | |
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LUMENTUM HOLDINGS INC. | ||
| By: | /s/ Wajid Ali | |
| Name: | Wajid Ali | |
| Title: | Chief Financial Officer | |
June 16, 2023
Exhibit 4.1
Execution Version
LUMENTUM HOLDINGS INC.
(Company)
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION
(Trustee)
1.50% Convertible Senior Notes due 2029
INDENTURE
Dated as of June 16, 2023
| ARTICLE 1. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION |
1 | |||||
| Section 1.01 |
Definitions | 1 | ||||
| Section 1.02 |
References to Interest | 13 | ||||
| Section 1.03 |
Acts of Holders | 13 | ||||
| ARTICLE 2. THE NOTES |
15 | |||||
| Section 2.01 |
Title and Terms; Payments | 15 | ||||
| Section 2.02 |
Ranking | 16 | ||||
| Section 2.03 |
Denominations | 16 | ||||
| Section 2.04 |
Execution, Authentication, Delivery and Dating | 16 | ||||
| Section 2.05 |
Temporary Notes | 17 | ||||
| Section 2.06 |
Registration; Registration of Transfer and Exchange | 17 | ||||
| Section 2.07 |
Transfer Restrictions | 19 | ||||
| Section 2.08 |
Expiration of Restrictions | 20 | ||||
| Section 2.09 |
Mutilated, Destroyed, Lost and Stolen Notes | 22 | ||||
| Section 2.10 |
Persons Deemed Owners | 22 | ||||
| Section 2.11 |
Transfer and Exchange | 23 | ||||
| Section 2.12 |
Cancellation | 26 | ||||
| Section 2.13 |
CUSIP Numbers | 27 | ||||
| Section 2.14 |
Payment and Computation of Interest | 27 | ||||
| Section 2.15 |
Business Day | 28 | ||||
| ARTICLE 3. REPURCHASE AT THE OPTION OF THE HOLDERS |
28 | |||||
| Section 3.01 |
Repurchase at Option of Holders upon a Fundamental Change | 28 | ||||
| Section 3.02 |
Fundamental Change Company Notice | 28 | ||||
| Section 3.03 |
Repurchase Procedures | 30 | ||||
| Section 3.04 |
Effect of Fundamental Change Repurchase Notice | 31 | ||||
| Section 3.05 |
Withdrawal of Fundamental Change Repurchase Notice | 31 | ||||
| Section 3.06 |
Deposit of Fundamental Change Repurchase Price | 31 | ||||
| Section 3.07 |
Notes Repurchased in Whole or in Part | 32 | ||||
| Section 3.08 |
Covenant To Comply with Applicable Laws upon Repurchase of Notes | 32 | ||||
| Section 3.09 |
Repayment to the Company | 32 | ||||
| Section 3.10 |
Satisfaction of the Company’s Fundamental Change Repurchase Obligations | 32 | ||||
| ARTICLE 4. CONVERSION |
33 | |||||
| Section 4.01 |
Right to Convert | 33 | ||||
| Section 4.02 |
Conversion Procedures | 36 | ||||
| Section 4.03 |
Settlement Upon Conversion | 38 | ||||
| Section 4.04 |
Adjustment of Conversion Rate | 42 | ||||
| Section 4.05 |
Discretionary and Voluntary Adjustments | 52 | ||||
i
| Section 4.06 | Adjustment to Conversion Rate Upon Conversion in Connection with a Make-Whole Fundamental Change or Notice of Optional Redemption | 52 | ||||
| Section 4.07 | Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale |
54 | ||||
| Section 4.08 | Certain Covenants |
56 | ||||
| Section 4.09 | Responsibility of Trustee |
57 | ||||
| Section 4.10 | Notice of Adjustment to the Trustee |
57 | ||||
| Section 4.11 | Notice to Holders |
57 | ||||
| Section 4.12 | Exchange in Lieu of Conversion |
59 | ||||
| ARTICLE 5. COVENANTS | 60 | |||||
| Section 5.01 | Payment of Principal, Interest, Redemption Price and Fundamental Change Repurchase Price |
60 | ||||
| Section 5.02 | Maintenance of Office or Agency |
60 | ||||
| Section 5.03 | Provisions as to Paying Agent |
61 | ||||
| Section 5.04 | Reports |
62 | ||||
| Section 5.05 | Statements as to Defaults |
63 | ||||
| Section 5.06 | Additional Interest Notice |
63 | ||||
| Section 5.07 | Compliance Certificate and Opinions of Counsel |
64 | ||||
| Section 5.08 | Additional Interest |
64 | ||||
| Section 5.09 | Corporate Existence |
65 | ||||
| Section 5.10 | Restriction on Resales |
65 | ||||
| Section 5.11 | Company to Furnish Trustee Names and Addresses of Holders |
66 | ||||
| ARTICLE 6. REMEDIES | 66 | |||||
| Section 6.01 | Events of Default |
66 | ||||
| Section 6.02 | Acceleration; Waiver |
67 | ||||
| Section 6.03 | Additional Interest |
68 | ||||
| Section 6.04 | Control by Majority |
69 | ||||
| Section 6.05 | Limitation on Suits |
69 | ||||
| Section 6.06 | Rights of Holders to Bring Suit |
70 | ||||
| Section 6.07 | Collection of Indebtedness; Suit for Enforcement by Trustee |
70 | ||||
| Section 6.08 | Trustee May Enforce Claims Without Possession of Notes |
70 | ||||
| Section 6.09 | Trustee May File Proofs of Claim |
70 | ||||
| Section 6.10 | Restoration of Rights and Remedies |
71 | ||||
| Section 6.11 | Rights and Remedies Cumulative |
71 | ||||
| Section 6.12 | Delay or Omission Not a Waiver |
71 | ||||
| Section 6.13 | Priorities |
71 | ||||
| Section 6.14 | Undertaking for Costs |
72 | ||||
| Section 6.15 | Waiver of Stay, Extension and Usury Laws |
72 | ||||
| ARTICLE 7. SATISFACTION AND DISCHARGE | 72 | |||||
| Section 7.01 | Discharge of Liability on Notes |
72 | ||||
| Section 7.02 | Deposited Monies to Be Held in Trust by Trustee |
73 | ||||
| Section 7.03 | Paying Agent to Repay Monies Held |
73 | ||||
ii
| Section 7.04 |
Return of Unclaimed Monies | 73 | ||||
| Section 7.05 |
Reinstatement | 74 | ||||
| ARTICLE 8. SUPPLEMENTAL INDENTURES |
74 | |||||
| Section 8.01 |
Supplemental Indentures Without Consent of Holders | 74 | ||||
| Section 8.02 |
Supplemental Indentures With Consent of Holders | 75 | ||||
| Section 8.03 |
Notice of Amendment or Supplement | 76 | ||||
| Section 8.04 |
Trustee to Sign Amendments, Etc. | 76 | ||||
| ARTICLE 9. SUCCESSOR COMPANY |
77 | |||||
| Section 9.01 |
Company May Consolidate, Etc. on Certain Terms | 77 | ||||
| Section 9.02 |
Successor Corporation to Be Substituted | 77 | ||||
| Section 9.03 |
Opinion of Counsel to Be Given to Trustee | 78 | ||||
| ARTICLE 10. THE TRUSTEE |
78 | |||||
| Section 10.01 |
Duties and Responsibilities of Trustee | 78 | ||||
| Section 10.02 |
Notice of Defaults | 80 | ||||
| Section 10.03 |
Reliance on Documents, Opinions, Etc. | 80 | ||||
| Section 10.04 |
No Responsibility for Recitals, Etc. | 81 | ||||
| Section 10.05 |
Trustee, Paying Agents, Exchange Agents or Registrar May Own Notes | 82 | ||||
| Section 10.06 |
Monies to be Held in Trust | 82 | ||||
| Section 10.07 |
Compensation and Expenses of Trustee | 82 | ||||
| Section 10.08 |
Officer’s Certificate as Evidence | 83 | ||||
| Section 10.09 |
Eligibility of Trustee | 83 | ||||
| Section 10.10 |
Resignation or Removal of Trustee | 83 | ||||
| Section 10.11 |
Acceptance by Successor Trustee | 84 | ||||
| Section 10.12 |
Succession by Merger, Etc. | 85 | ||||
| Section 10.13 |
Trustee’s Application for Instructions from the Company | 85 | ||||
| ARTICLE 11. OPTIONAL REDEMPTION |
86 | |||||
| Section 11.01 |
Right to Redeem | 86 | ||||
| Section 11.02 |
Redemption Price | 86 | ||||
| Section 11.03 |
Redemption Notice | 86 | ||||
| Section 11.04 |
Payment of Notes Called for Redemption | 88 | ||||
| Section 11.05 |
Redemption in Part | 88 | ||||
| Section 11.06 |
Restrictions on Redemption | 88 | ||||
| Section 11.07 |
Special Provisions for Partial Calls | 89 | ||||
| ARTICLE 12. MISCELLANEOUS |
89 | |||||
| Section 12.01 |
Effect on Successors and Assigns | 89 | ||||
| Section 12.02 |
Governing Law | 89 | ||||
| Section 12.03 |
No Note Interest Created | 89 | ||||
| Section 12.04 |
Voting | 90 | ||||
iii
| Section 12.05 |
Benefits of Indenture | 90 | ||||
| Section 12.06 |
Calculations | 90 | ||||
| Section 12.07 |
Execution in Counterparts | 90 | ||||
| Section 12.08 |
Notices, Etc. to Trustee and Company | 91 | ||||
| Section 12.09 |
No Recourse Against Others | 92 | ||||
| Section 12.10 |
Tax Withholding | 92 | ||||
| Section 12.11 |
Waiver of Jury Trial | 92 | ||||
| Section 12.12 |
U.S.A. Patriot Act | 92 | ||||
| Section 12.13 |
Force Majeure | 92 |
iv
INDENTURE, dated as June 16, 2023, between Lumentum Holdings Inc., a Delaware corporation, as issuer (the “Company”), and U.S. Bank Trust Company, National Association, a national banking association, as trustee (the “Trustee”).
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the creation of an issue of the Company’s 1.50% Convertible Senior Notes due 2029 (the “Notes”), having the terms, tenor, amount and other provisions hereinafter set forth, and, to provide therefor, has duly authorized the execution and delivery of this Indenture; and
WHEREAS, all things necessary to make the Notes, when duly executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the legal, valid and binding obligations of the Company, in accordance with the terms of the Notes and this Indenture, have been done and performed, and the execution of this Indenture and the issue hereunder of the Notes have in all respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, for and in consideration of the premises and the purchases of the Notes by the Holders thereof, it is mutually agreed, for the benefit of the Company, the Trustee and the equal and proportionate benefit of all Holders, as follows:
ARTICLE 1.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01 Definitions. The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. The words “herein”, “hereof”, “hereunder” and words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other Subdivision. The word “or” is not exclusive and the word “including” means including without limitation. The terms defined in this Article include the plural as well as the singular.
“Act” has the meaning specified in Section 1.03.
“Additional Interest” means all amounts, if any, payable pursuant to Section 5.08 and Section 6.03 hereof.
“Additional Notes” means any Notes (other than the Initial Notes) issued under this Indenture in accordance with Section 2.01 hereof, with the same terms as the Initial Notes.
“Additional Shares” has the meaning specified in Section 4.06(a) hereof.
“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.
1
“Agent Members” has the meaning specified in Section 2.06(b) hereof.
“Applicable Procedures” means, with respect to any matter at any time, the policies and procedures of a Depositary, if any, that are applicable to such matter at such time.
“Authenticating Agent” means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Notes.
“Authorized Officer” means any Person (whether designated by name or office) appointed by or pursuant to a Board Resolution for the purpose, or a particular purpose, of this Indenture; provided that written notice of such appointment shall have been given to the Trustee.
“Bid Solicitation Agent” means the Person appointed by the Company, from time to time, to solicit secondary market bid quotations for the Trading Price of the Notes in accordance with Section 4.01(b)(2) hereof. The Company will be the initial Bid Solicitation Agent. The Company may appoint another Person as the Bid Solicitation Agent without prior notice to Holders and the Company may act as the Bid Solicitation Agent.
“Board of Directors” means either the board of directors of the Company or any duly authorized committee of that board.
“Board Resolution” when used with reference to the Company 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.
“Business Day” means any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or to be closed.
“Capital Stock” means, for any Person, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) the equity of such Person, but excluding any debt securities convertible into such equity.
“Cash Settlement” has the meaning specified in Section 4.03(a) hereof.
“Close of Business” means 5:00 p.m., New York City time.
“Combination Settlement” has the meaning specified in Section 4.03(a) hereof.
“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act.
2
“Common Equity” of any Person means the Capital Stock of such Person that is generally entitled (a) to vote in the election of directors of such Person or (b) if such Person is not a corporation, to vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.
“Common Stock” means, subject to Section 4.07, the shares of common stock, par value $0.001 per share, of the Company authorized at the date of this instrument as originally executed or shares of any class or classes of common stock resulting from any reclassification or reclassifications thereof; provided, however, that if at any time there shall be more than one such resulting class, the shares so issuable on conversion of Notes shall include shares of all such classes, and the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.
“common stock” includes any stock of any class of Capital Stock which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the issuer thereof and which is not subject to redemption by the issuer thereof.
“Company” has the meaning specified in the first paragraph of this Indenture, and subject to the provisions of Article 9, shall include its successors and assigns.
“Company Order” means a written request or order signed in the name of the Company by an Officer thereof.
“Conversion Agent” has the meaning specified in Section 5.02 hereof.
“Conversion Date” has the meaning specified in Section 4.02(b) hereof.
“Conversion Notice” has the meaning specified in Section 4.02(b) hereof.
“Conversion Price” means, in respect of each Note, as of any date, $1,000 divided by the Conversion Rate in effect on such date.
“Conversion Rate” means initially 14.3808 shares of Common Stock per $1,000 principal amount of Notes, subject to adjustment as set forth herein.
“Corporate Trust Office” means, with respect to the office of the Trustee, the designated corporate trust office of the Trustee, which office at the date hereof is located at U.S. Bank Trust Company, National Association, 1 California Street, Suite 1000, San Francisco, CA 94111, Attention: David A. Jason (Lumentum Holdings Convertible Senior Notes due 2029), or 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 of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).
“corporation” means a corporation, association, joint stock company, limited liability company or business trust.
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“Custodian” means the Trustee, as custodian with respect to the Notes (so long as the Notes constitute Global Notes), or any successor entity.
“Daily Conversion Value” means, for each of the 25 consecutive VWAP Trading Days during any Observation Period, one-twenty-fifth (1/25th) of the product of (i) the Conversion Rate in effect on such VWAP Trading Day and (ii) the Daily VWAP on such VWAP Trading Day.
“Daily Measurement Value” means the Specified Dollar Amount divided by 25.
“Daily Settlement Amount” shall consist of, for each $1,000 principal amount of Notes for each of the 25 consecutive VWAP Trading Days during the Observation Period for any conversion of Notes, (i) cash equal to the lesser of (A) the Daily Measurement Value and (B) the Daily Conversion Value for the relevant VWAP Trading Day; and (ii) if such Daily Conversion Value exceeds the Daily Measurement Value, a number of shares of Common Stock equal to (A) the difference between such Daily Conversion Value and the Daily Measurement Value, divided by (B) the Daily VWAP for such VWAP Trading Day.
“Daily VWAP” means, for each of the 25 consecutive VWAP Trading Days during the applicable Observation Period (or, if applicable, the VWAP Trading Day referred to in Section 4.03(b)(i)), the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “LITE <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such VWAP Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of the Common Stock on such VWAP Trading Day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company). The “Daily VWAP” will be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
“De-Legending Deadline Date” means, with respect to any Note, the 15th day after the Free Trade Date of such Note; provided, however, that if such 15th day is after a Regular Record Date and on or before the next Interest Payment Date, then the De-Legending Deadline Date for such Note will instead be the Business Day immediately after such Interest Payment Date.
“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.
“Default Settlement Method” means Combination Settlement with a Specified Dollar Amount of $1,000 per $1,000 principal amount of Notes; provided, however, that (x) subject to Section 4.03(a)(iv), the Company may, from time to time, change the Default Settlement Method by sending notice of the new Default Settlement Method to the Holders, the Trustee and the Conversion Agent; and (y) the Default Settlement Method will be subject to Section 4.03.
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“Depositary” means, with respect to the Notes issuable or issued in the form of a Global Note, The Depository Trust Company (“DTC”) or the Person designated as Depositary by the Company pursuant to the applicable provisions of this Indenture until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Depositary” shall mean or include each Person who is then a Depositary hereunder, and if at any time there is more than one such Person, “Depositary” as used with respect to the Notes of any such series shall mean the Depositary with respect to the Notes of that series.
“Distributed Property” has the meaning specified in Section 4.04(c) hereof.
“Dollar” or “$” means a dollar or other equivalent unit in such coin or currency of the United States of America that is legal tender for the payment of public and private debts at the time of payment.
“Effective Date” means (i) with respect to a Fundamental Change or a Make-Whole Fundamental Change, as applicable, the date such Fundamental Change or Make-Whole Fundamental Change, as applicable, occurs or becomes effective and (ii) with respect to any Optional Redemption, the date of the Redemption Notice, as applicable.
“Event of Default” has the meaning specified in Section 6.01 hereof.
“Ex-Dividend Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Form of Assignment and Transfer” means the “Form of Assignment and Transfer” attached as Attachment 3 to the Form of Note attached hereto as Exhibit A.
“Form of Fundamental Change Repurchase Notice” means the “Form of Fundamental Change Repurchase Notice” attached as Attachment 2 to the Form of Note attached hereto as Exhibit A.
“Form of Notice of Conversion” means the “Form of Notice of Conversion” attached as Attachment 1 to the Form of Note attached hereto as Exhibit A.
“Free Trade Date” means the date that is one year after the last date of original issuance of the Notes.
“Free Transferability Certificate” means a certificate substantially in the form attached hereto as Exhibit B.
“Freely Tradable” means, with respect to any Notes, that such Notes are eligible to be sold by a Person who is not an “affiliate” of the Company (within the meaning of Rule 144) and has not been an “affiliate” of the Company (within the meaning of Rule 144) during the immediately preceding three months without any volume or manner of sale restrictions under the Securities Act.
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“Fundamental Change” shall be deemed to have occurred at the time after the Notes are originally issued if any of the following occurs prior to the Maturity Date:
(1) any “person” or “group” (within the meaning of Section 13(d) of the Exchange Act), other than the Company or its direct or indirect wholly-owned Subsidiaries, files a Schedule TO (or any successor schedule, form or report) or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s Common Equity representing more than 50.0% of the voting power of the Company’s Common Equity; provided, that no person or group shall be deemed to be the beneficial owner of any securities tendered pursuant to a tender or exchange offer made by or on behalf of such “person” or “group” until such tendered securities are accepted for purchase or exchange under such offer;
(2) the consummation of (A) any recapitalization, reclassification or change of Common Stock (other than changes resulting from a subdivision or combination) pursuant to which the Common Stock would be converted into, or exchanged for, stock, other securities or other property or assets, (B) any share exchange, consolidation or merger involving the Company pursuant to which Common Stock will be converted into or exchanged for, cash, securities or other property or (C) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one or more of the Company’s direct or indirect wholly owned Subsidiaries; provided that a transaction described in clause (A) or (B) in which the holders of all classes the Company’s Common Equity immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of Common Equity of the continuing or surviving Person or transferee or the parent thereof immediately after transaction in substantially the same proportions relative to each other as such ownership immediately prior to such transaction will not constitute a Fundamental Change under such clause (A) or (B);
(3) the Company’s stockholders approve any plan or proposal for the liquidation or dissolution of the Company; or
(4) the Common Stock or other common stock or Common Equity interests into which the Notes are then convertible ceases to be listed on any of The New York Stock Exchange, The Nasdaq Global Market or The Nasdaq Global Select Market (or their respective successors);
provided, however, that in the case of a transaction or event described in clauses (1) and (2) above, if at least 90% of the consideration received or to be received by holders of the Common Stock (excluding cash payments for fractional shares and cash payments in respect of dissenters’ appraisal rights) in the transaction or transactions that would otherwise constitute a “Fundamental Change” consists of shares of common stock or Common Equity interests that are traded on any of The New York Stock Exchange, The Nasdaq Global Market or The Nasdaq Global Select Market (or their respective successors) or that will be so traded when issued or exchanged in connection with the transaction that would otherwise constitute a “Fundamental
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Change,” and as a result of such transaction or transactions, the Notes become convertible into such consideration, excluding cash payments for fractional shares and cash payments in respect of dissenters’ appraisal rights (subject to settlement in accordance with the provisions of Sections 4.03, 4.04 and 4.06 hereof), such event shall not be a “Fundamental Change”. For purposes of this paragraph, any transaction that constitutes a Fundamental Change pursuant to both clause (1) and clause (2) above (without giving effect to the proviso to clause (2)) shall be deemed a Fundamental Change solely under clause (2) above (subject to the proviso to clause (2)). If any transaction occurs in which shares of Common Stock are replaced by the securities of another entity, following completion of any related Make-Whole Fundamental Change Period (or, in the case of a transaction that would have been a Fundamental Change or a Make-Whole Fundamental Change but for the immediately preceding paragraph, following the Effective Date of such transaction), references to the Company in this definition of “Fundamental Change” shall instead be references to such other entity. For the avoidance of doubt, the preceding sentence will not limit the Company’s or any applicable successor’s applicable obligations under this Indenture in respect of any Fundamental Change or Make-Whole Fundamental Change.
“Fundamental Change Company Notice” has the meaning specified in Section 3.02(a) hereof.
“Fundamental Change Expiration Time” has the meaning specified in Section 3.03(a) hereof.
“Fundamental Change Repurchase Date” has the meaning specified in Section 3.01(a) hereof.
“Fundamental Change Repurchase Notice” has the meaning specified in Section 3.03(a) hereof.
“Fundamental Change Repurchase Price” has the meaning specified in Section 3.01(a) hereof.
“Global Note” means a Note evidencing all or part of a series of Notes, issued to the Depositary for such series or its nominee, and registered in the name of such Depositary or nominee.
“Holder” means the Person in whose name a Note is registered in the Register.
“Indenture” means this Indenture as amended or supplemented from time to time.
“Initial Notes” has the meaning specified in Section 2.01 hereof.
“Initial Purchasers” means the “Purchasers” listed in Schedule I to the Purchase Agreement.
“Interest Payment Date” means, with respect to the payment of interest on the Notes, each June 15 and December 15 of each year, beginning on December 15, 2023 or if any such day is not a Business Day, the immediately following Business Day.
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“Issue Date” means, with respect to any Note, the first date of original issuance of such Note (and not, for the avoidance of doubt, the date of issuance of any Note issued in whole or in part upon registration or transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.05, 2.06, 2.07, 2.08, 2.09, 2.11 or 3.07).
“Last Original Issuance Date” means (A) with respect to any Notes issued pursuant to the Purchase Agreement, and any Notes issued in exchange therefor or in substitution thereof, June 16, 2023; and (B) with respect to any Additional Notes issued pursuant to Section 2.01, and any Notes issued in exchange therefor or in substitution thereof, either (i) the later of (x) the date such Notes are originally issued and (y) the last date any Notes are originally issued as part of the same offering pursuant to the exercise of an option granted to the initial purchaser(s) of such Notes to purchase additional Notes; or (ii) such other date as is specified in an Officer’s Certificate delivered to the Trustee before the original issuance of such Notes.
“Last Reported Sale Price” of the Common Stock for any Trading Day (or other security for which a closing sale price must be determined) means the closing sale price per share (or, if no closing sale price is reported, the average of the last bid and last ask prices or, if more than one in either case, the average of the average last bid and the average last ask prices) on that Trading Day as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock (or other such security) is traded. If the Common Stock (or other such security) is not listed for trading on a U.S. national or regional securities exchange on the relevant Trading Day, the “Last Reported Sale Price” will be the last quoted bid price per share of the Common Stock (or other such security) in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization. If the Common Stock (or other such security) is not so quoted, the “Last Reported Sale Price” will be the mid-point of the last bid and last ask prices per share of the Common Stock (or other such security) on the relevant Trading Day from a nationally recognized independent investment banking firm selected by the Company for this purpose, which may be one of the Initial Purchasers. Any such determination will be conclusive absent manifest error.
“Make-Whole Fundamental Change” means any event that (i) is a Fundamental Change (subject to any exceptions or exclusions to the definition thereof) or (ii) would be a Fundamental Change, but for the proviso in clause (2) of the definition of “Fundamental Change.”
“Make-Whole Fundamental Change Period” has the meaning specified in Section 4.06(a) hereof.
“Market Disruption Event” means, if the Common Stock is listed for trading on The Nasdaq Global Select Market or listed on another U.S. national or regional securities exchange, the occurrence or existence during the one-half hour period ending on the scheduled close of trading on any Scheduled Trading Day of any material suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in the Common Stock or in any options contracts or futures contracts traded on any U.S. exchange relating to the Common Stock.
“Maturity Date” means December 15, 2029.
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“Measurement Period” has the meaning specified in Section 4.01(b)(ii) hereof.
“Note” or “Notes” has the meaning specified in the first paragraph of the Recitals of this Indenture.
“Notice of Default” has the meaning specified in Section 6.01(f) hereof.
“Observation Period” means, with respect to any Note surrendered for conversion means: (i) subject to the immediately succeeding clause (ii), if the relevant Conversion Date occurs prior to September 15, 2029, the 25 consecutive VWAP Trading Days beginning on, and including, the second VWAP Trading Day immediately succeeding such Conversion Date; (ii) if the relevant Conversion Date occurs on or after the date of the Company’s issuance of a Redemption Notice with respect to the Notes as described in Article 11 and on or prior to the second Business Day immediately preceding the relevant Redemption Date, the 25 consecutive VWAP Trading Days beginning on, and including, the 26th Scheduled Trading Day immediately preceding the relevant Redemption Date; and (iii) if the relevant Conversion Date occurs on or after September 15, 2029, the 25 consecutive VWAP Trading Days beginning on, and including, the 26th Scheduled Trading Day immediately preceding the Maturity Date.
“Odd Lot Tender Offer” has the meaning specified in Section 4.04(k) hereof.
“Offer Expiration Date” has the meaning specified in Section 4.04(e) hereof.
“Officer” or “officer” shall mean, the Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the President, a Vice President (whether or not designated by a number or word or words added before or after the title “Vice President”), the Treasurer, an Assistant Treasurer, the Secretary or the Controller.
“Officer’s Certificate” means a certificate signed by an Officer or Authorized Officer and delivered to the Trustee.
“Open of Business” means 9:00 a.m., New York City time.
“Opinion of Counsel” means a written opinion of counsel, who may be an employee of, or counsel for, the Company or an Affiliate of the Company.
“Optional Redemption” has the meaning specified in Section 11.01(a) hereof.
“Outstanding” means, subject to Section 12.04, with respect to the Notes, any Notes authenticated by the Trustee except (i) Notes cancelled by it, (ii) Notes delivered to it for cancellation, (iii) Notes paid pursuant to Section 2.09 hereof and (iv)(A) Notes replaced pursuant to Section 2.09 hereof, on and after the time such Note is replaced (unless the Trustee and the Company receive proof satisfactory to them that such Note is held by a bona fide purchaser), (B) Notes converted pursuant to Article 4 hereof, on and after their Conversion Date, (C) any and all Notes, as of the Maturity Date, if the Paying Agent holds, in accordance with this Indenture, money sufficient to pay all of the Notes then payable, and (D) any and all Notes owned by the Company or any other obligor upon the Notes.
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“Paying Agent” means any Person authorized by the Company to pay the principal amount of, interest on, or the Fundamental Change Repurchase Price or Redemption Price on, any Notes on behalf of the Company.
“Person” means any individual, corporation, partnership, joint venture, trust, unincorporated organization, other entity, or government or any agency or political subdivision thereof.
“Physical Notes” means permanent certificated Notes in definitive, fully registered form issued in denominations of $1,000 principal amount and integral multiples of $1,000 in excess thereof.
“Physical Settlement” has the meaning set forth in Section 4.03(a) hereof.
“Preliminary Offering Circular” means the Preliminary Offering Circular dated June 12, 2023 related to the offering of the Initial Notes.
“Purchase Agreement” means that certain Purchase Agreement, dated June 13, 2023, among the Company and the Initial Purchasers.
“Redemption Date” has the meaning specified in Section 11.01(b) hereof.
“Redemption Notice” has the meaning specified in Section 11.01(b) hereof.
“Redemption Price” has the meaning specified in Section 11.02 hereof.
“Reference Property” has the meaning specified in Section 4.07(a) hereof.
“Reference Property Unit” has the meaning specified in Section 4.07(a) hereof.
“Register” and “Registrar” have the respective meanings specified in Section 2.06.
“Regular Record Date” means, with respect to any Interest Payment Date, June 1 (whether or not a Business Day) or December 1 (whether or not a Business Day), as the case may be, immediately preceding such Interest Payment Date.
“Reporting Event of Default” has the meaning specified in Section 6.03(a) hereof.
“Resale Restriction Termination Date” has the meaning specified in Section 2.08(b)(ii).
“Responsible Officer” when used with respect to the Trustee, means any officer within the corporate trust department or any other successor group of the Trustee, including any vice president, assistant vice president, assistant secretary or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers who at the time shall be such officers, respectively, or to whom any corporate trust matter relating to this Indenture is referred because of his or her knowledge of and familiarity with the particular subject and who in each case shall have direct responsibility for the administration of this Indenture.
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“Restricted Global Note” has the meaning specified in Section 2.08(b)(i).
“Restricted Note” has the meaning specified in Section 2.07(a)(i).
“Restricted Notes Legend” has the meaning specified in the Form of Note attached hereto as Exhibit A.
“Restricted Stock” has the meaning specified in Section 2.07(b)(i).
“Restricted Stock Legend” means a legend substantially in the form set forth in Exhibit C hereto.
“Rule 144” means Rule 144 under the Securities Act (including any successor rule thereto), as the same may be amended from time to time.
“Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading. If the Common Stock is not listed or admitted for trading, “Scheduled Trading Day” means a Business Day.
“Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Settlement Amount” has the meaning specified in Section 4.03(a)(ii) hereof.
“Settlement Election” has the meaning specified in Section 4.03(a)(i) hereof.
“Settlement Election Notice” has the meaning specified in Section 4.03(a)(ii) hereof.
“Settlement Method” means, with respect to any conversion of Notes, Physical Settlement, Cash Settlement or Combination Settlement, as elected (or deemed to be elected) by the Company in accordance with Section 4.03(a)(i) hereof.
“Share Exchange Event” has the meaning specified in Section 4.07(a) hereof.
“Significant Subsidiary” means, for the purposes of Section 6.01, a Subsidiary of the Company that has the meaning set forth in the definition of “significant subsidiary” in Article 1, Rule 1-02(w) of Regulation S-X, promulgated pursuant to the Securities Act (or any successor rule), as in effect on the original date of issuance of the Notes.
“Specified Dollar Amount” means the maximum cash amount per $1,000 principal amount of Notes to be received by the Holder upon conversion as specified in the Company’s Specified Dollar Amount Election Notice (which may be part of the Settlement Election Notice), or as otherwise deemed to have been elected for such conversion.
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“Specified Dollar Amount Election” has the meaning specified in Section 4.03(a)(i) hereof.
“Specified Dollar Amount Election Notice” has the meaning specified in Section 4.03(a)(i) hereof.
“Spin-Off” has the meaning specified in Section 4.04(c) hereof.
“Stock Price” has the meaning specified in Section 4.06(c) hereof.
“Subsidiary” of any Person means (a) any corporation, association or other business entity other than a partnership of which more than 50% of the outstanding total voting power ordinarily entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, trustees or other voting members of the governing body thereof is at the time owned or controlled, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries or (b) any partnership the sole general partner or the managing general partner of which is the Company or a Subsidiary of the Company or the only general partners of which are the Company or of one or more Subsidiaries of the Company (or any combination thereof).
“Successor Company” has the meaning specified in Section 9.01(a) hereof.
“Trading Day” means a Scheduled Trading Day on which (i) there is no Market Disruption Event, and (ii) trading in the Common Stock (or other security for which a closing sale price must be determined) generally occurs on The Nasdaq Global Select Market or, if the Common Stock (or such other security) is not then listed on The Nasdaq Global Select Market, on the principal other U.S. national or regional securities exchange on which the Common Stock (or such other security) is then listed or, if the Common Stock (or such other security) is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock (or such other security) is then traded. If the Common Stock (or such other security) is not so listed or traded, “Trading Day” means a “Business Day.”
“Trading Price” of the Notes on any Trading Day means the average of the secondary market bid quotations obtained by the Bid Solicitation Agent for $2,000,000 principal amount of the Notes at approximately 3:30 p.m., New York City time, on such Trading Day from three independent nationally recognized securities dealers selected by the Company, which may include one of the Initial Purchasers; provided that, if three such bids cannot reasonably be obtained by the Bid Solicitation Agent but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Bid Solicitation Agent that one bid shall be used. If the Bid Solicitation Agent cannot reasonably obtain at least one bid for $2,000,000 principal amount of the Notes (or such lesser principal amount of Notes as may then by outstanding) from a nationally recognized securities dealer on a Trading Day, then the Trading Price per $1,000 principal amount of Notes on such Trading Day will be deemed to be less than 98% of the product of (i) the Last Reported Sale Price of the Common Stock on such Trading Day and (ii) the Conversion Rate in effect on such Trading Day.
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Any such determination will be conclusive absent manifest error. If (x) the Company is not acting as Bid Solicitation Agent and the Company does not, when it is required to do so, instruct the Bid Solicitation Agent to obtain bids, or if the Company gives such instruction to the Bid Solicitation Agent and the Bid Solicitation Agent fails to solicit bids when required, or (y) the Company is acting as Bid Solicitation Agent and it fails to solicit bids, then, in either case, the Trading Price per $1,000 principal amount of the Notes will be deemed to be less than 98% of the product of (i) the Last Reported Sale Price of the Common Stock and (ii) the Conversion Rate, in each case, for each Trading Day on which the Company or the Bid Solicitation Agent fails to do so, as the case may be.
“Trustee” means the Person named as the “Trustee” in the first paragraph of this Indenture until a successor Trustee shall have become such pursuant to Section 10.11 hereof, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder.
“U.S.” means the United States of America.
“Valuation Period” has the meaning specified in Section 4.04(c) hereof.
“VWAP Market Disruption Event” means (i) a failure by the primary U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading to open for trading during its regular trading session or (ii) the occurrence or existence, prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for the Common Stock for more than a one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant securities exchange or otherwise) in the Common Stock or in any options contracts or futures contracts traded on any United States exchange relating to the Common Stock.
“VWAP Trading Day” means a Scheduled Trading Day on which (i) there is no VWAP Market Disruption Event and (ii) trading in the Common Stock generally occurs on The Nasdaq Global Select Market or, if the Common Stock is not then listed on The Nasdaq Global Select Market, on the principal other U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then listed or admitted for trading. If the Common Stock is not so listed or admitted for trading, “VWAP Trading Day” means a “Business Day.”
Section 1.02 References to Interest. Any reference to interest on, or in respect of, any Note in the Indenture shall be deemed to include Additional Interest, if, in such context, Additional Interest is, was or would be payable pursuant hereto. Any express mention of the payment of Additional Interest in any provision hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made.
Section 1.03 Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be made, given 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 duly appointed in writing; and,
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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. 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, or of the holding by any Person of Notes, shall be sufficient for any purpose of this Indenture and (subject to Section 10.01 hereof) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section 1.03.
(b) The fact and date of the execution by any Person of any such 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 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.
(c) The amount of Notes held by any Person executing any such instrument or writings as the Holder thereof, and the numbers of such Notes, and the date of his holding the same, may be proved by the production of such Notes or by a certificate executed, as Depositary, by any trust company, bank, banker or member of a national securities exchange (wherever situated), if such certificate is in form satisfactory to the Trustee, showing that at the date therein mentioned such Person had on deposit with such Depositary, or exhibited to it, the Notes therein described; or such facts may be proved by the certificate or affidavit of the Person executing such instrument or writing as the Holder thereof, if such certificate or affidavit is in form satisfactory to the Trustee. The Trustee and the Company may assume that such ownership of any Notes continues until (1) another certificate bearing a later date issued in respect of the same Notes is produced or (2) such Notes are produced by some other Person or (3) such Notes are no longer Outstanding.
(d) The fact and date of execution of any such instrument or writing and the amount and number of Notes held by the Person so executing such instrument or writing may also be proved in any other manner that the Trustee deems sufficient; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section 1.03.
(e) The principal amount and serial numbers of Notes held by any Person, and the date of holding the same, shall be proved by the Registrar.
(f) Any request, demand, authorization, direction, notice, consent, election, waiver or other Act of the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Note.
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(g) The Company may but shall not be obligated to set a record date for purposes of determining the identity of Holders of any Outstanding Notes of any series entitled to vote or consent to any action by vote or consent authorized or permitted by Section 6.02, 6.04, 6.05, 8.02 or 10.10. Such record date shall be not less than 10 nor more than 60 days prior to the first solicitation of such consent or the date of the most recent list of Holders of such Notes furnished to the Trustee pursuant to Section 5.11 prior to such solicitation.
(h) If the Company solicits from Holders any request, demand, authorization, direction, notice, consent, election, waiver or other Act, the Company may, at its option, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, election, waiver or other Act, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, election, waiver or other Act may be given before or after such record date, but only the Holders of record at the Close of Business on the record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of the Outstanding Notes have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, election, waiver or other Act, and for that purpose the Outstanding Notes shall be computed as of the record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date.
ARTICLE 2.
THE NOTES
Section 2.01 Title and Terms; Payments.
The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is initially limited to $603,750,000 aggregate principal amount (the “Initial Notes”) except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.05, 2.06, 2.07, 2.08, 2.09, 2.11, 3.07 or 4.02. The Company may, from time to time after the execution of this Indenture, without notice to or the consent of the Holders, reopen this Indenture and execute and deliver to the Trustee for authentication Additional Notes with the same CUSIP number as the Initial Notes in an unlimited aggregate principal amount, and the Trustee shall thereupon authenticate and deliver said Additional Notes to or upon receipt of a Company Order together with the other documents required pursuant to this Indenture; provided, however, that (1) if any such Additional Notes (and any Notes that have been resold after they have been purchased or otherwise acquired by the Company or any of its Subsidiaries) are not fungible with the Initial Notes for U.S. federal income tax purposes and securities laws purposes, any such Additional Notes will have one or more separate CUSIP numbers so long as they remain not fungible; (2) such Additional Notes must have the same terms as the Initial Notes (other than issue date, issue
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price and date from which interest shall accrue and, if applicable, restrictions on transfer in respect of such Additional Notes); and (3) the Trustee must receive an Officer’s Certificate to the effect that such issuance of Additional Notes complies with the provisions of this Indenture, including each provision of this paragraph.
The Notes shall be known and designated as the “1.50% Convertible Senior Notes due 2029” of the Company. The principal amount shall be payable on the Maturity Date.
The principal amount of any Physical Notes shall be payable at the Corporate Trust Office and at any other office or agency in the continental United States maintained by the Company for such purpose. Interest on Physical Notes will be payable (i) to Holders holding Physical Notes having an aggregate principal amount of $2,000,000 or less of Notes, by check mailed to such Holders at the address set forth in the Register and (ii) to Holders holding Physical Notes having an aggregate principal amount of more than $2,000,000 of Notes, upon application by such Holder to the Registrar not later than the relevant Regular Record Date, by wire transfer in immediately available funds to an account within the United States designated by such Holder if such Holder has provided the Trustee or the Paying Agent with an application containing the requisite information necessary to make such wire transfer, which application shall remain in effect until such Holder notifies the Trustee and Paying Agent to the contrary in writing. The Company will pay or cause the Paying Agent to pay principal of, and interest on, Global Notes by wire transfer in immediately available funds to The Depository Trust Company or its nominee, as the case may be, as the registered Holder of such Global Note, on each Interest Payment Date, Redemption Date, Fundamental Change Repurchase Date or other payment date, as the case may be.
Any Notes repurchased by the Company will be retired and no longer Outstanding hereunder.
Section 2.02 Ranking. The Notes constitute general senior unsecured obligations of the Company.
Section 2.03 Denominations. The Notes shall be issuable only in registered form without coupons and in denominations of $1,000 and any integral multiple of $1,000 in excess thereof.
Section 2.04 Execution, Authentication, Delivery and Dating. The Notes shall be executed by manual or facsimile signature on behalf of the Company by any Officer of the Company.
Notes bearing the manual, facsimile, or other electronically transmitted (including in .pdf format) signatures of individuals who were at any time an Officer of the Company shall bind the Company, notwithstanding that such individual has ceased to hold such office prior to the authentication and delivery of such Notes or did not hold such office at the date of such Notes.
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Notes. The Company Order shall specify the amount of Notes to be authenticated, and shall further specify the amount of such Notes to be issued as one or more Global Notes or as one or more Physical Notes. The Trustee in accordance with such Company Order shall authenticate and deliver such Notes as provided in this Indenture and not otherwise.
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Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by an authorized signatory of the Trustee by manual signature, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.
Section 2.05 Temporary Notes. Pending the preparation of Physical Notes, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Notes that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the Physical Notes in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the Officer executing such Notes may determine, as evidenced by such Officer’s execution of such Notes; provided, that any such temporary Notes shall bear legends on the face of such Notes as set forth in the Form of Note attached hereto as Exhibit A and/or Sections 2.07 and 2.11.
After the preparation of Physical Notes, the temporary Notes shall be exchangeable for Physical Notes upon surrender of the temporary Notes at any office or agency of the Company designated pursuant to Section 5.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes, the Company shall execute and the Trustee shall, upon Company Order, authenticate and deliver in exchange therefor a like principal amount of Physical Notes of authorized denominations. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Physical Notes.
Section 2.06 Registration; Registration of Transfer and Exchange.
(a) The Company shall cause to be kept at the applicable Corporate Trust Office of the Trustee a register in the continental United States (the register maintained in such office and in any other office or agency designated pursuant to Section 5.02 being herein sometimes collectively referred to as the “Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes and of transfers of Notes. The Trustee is hereby appointed “Registrar” (the “Registrar”) for the purpose of registering Notes and transfers of Notes as herein provided.
Upon surrender for registration of transfer of any Note at an office or agency of the Company designated pursuant to Section 5.02 for such purpose, the Company shall execute, and upon receipt of a Company Order the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denomination and of a like aggregate principal amount and tenor, each such Note bearing such restrictive legends as may be required by this Indenture (including the Form of Note attached hereto as Exhibit A and Sections 2.07 and 2.11).
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At the option of the Holder and subject to the other provisions of Sections 2.07 and 2.11, Notes may be exchanged for other Notes of any authorized denomination and of a like aggregate principal amount and tenor, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall, upon receipt of a Company Order, authenticate and deliver, the Notes which the Holder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Registrar) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. As a condition to the registration of transfer of any Restricted Notes, the Company or the Registrar may require evidence satisfactory to them as to the compliance with the restrictions set forth in the legend on such Notes.
No service charge shall be made for any registration of transfer or exchange of Notes, but the Company and the Registrar 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 Notes, other than exchanges pursuant to Section 2.11 not involving any transfer.
Neither the Company nor the Registrar shall be required to exchange or register a transfer of any Note in the circumstances set forth in Section 2.11(a)(iv).
(b) Neither any members of, or participants in, the Depositary (collectively, the “Agent Members”) nor any other Persons on whose behalf any Agent Member may act shall have any rights under this Indenture with respect to any Global Note registered in the name of the Depositary or any nominee thereof, or under any such Global Note, and the Depositary or such nominee, as the case may be, may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Note for all purposes whatsoever. The Trustee shall have no liability, responsibility or obligation to any Agent Members or any other Person on whose behalf Agent Members may act with respect to (i) any ownership interests in the Global Note, (ii) the accuracy of the records of the Depositary or its nominee, (iii) any notice required hereunder, (iv) any payments under or with respect to the Global Note (v) or actions taken or not taken by any Agent Members.
(c) Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written or electronic certification, proxy or other authorization furnished by the Depositary or such nominee, as the case may be, or impair, as between the Depositary, its Agent Members and any other Person on whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a Holder of any Note. The registered Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action that a Holder is entitled to take under this Indenture or the Notes.
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Section 2.07 Transfer Restrictions.
(a) Restricted Notes.
(i) Every Note (and all securities issued in exchange therefor or substitution thereof) that bears, or that is required under this Section 2.07(a) to bear, the Restricted Notes Legend will be deemed to be a “Restricted Note.” Each Restricted Note will be subject to the restrictions on transfer set forth in this Indenture (including in the Restricted Notes Legend) and will bear a restricted CUSIP number for the Notes unless such restrictions on transfer are eliminated or otherwise waived by written consent of the Company (including without limitation, by the Company’s delivery of the Free Transferability Certificate as provided herein), and each Holder of a Restricted Note, by such Holder’s acceptance of such Restricted Note, will be deemed to be bound by the applicable restrictions on transfer applicable to such Restricted Note.
(ii) Until the Resale Restriction Termination Date, any Note will bear the Restricted Notes Legend unless:
(A) such Note, was transferred (1) to the Company or a Subsidiary of the Company (within the meaning of Rule 144) or (2) pursuant to a registration statement that was effective under the Securities Act at the time of such transfer; or
(B) such Note was transferred pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act; or
(C) the Company delivers written notice to the Trustee and the Registrar (including, without limitation, by the Company’s delivery of the Free Transferability Certificate as provided herein) stating that the Restricted Notes Legend may be removed from such Note and all Applicable Procedures have been complied with;
(iii) In addition, until the Resale Restriction Termination Date:
(A) no transfer of any Note will be registered by the Registrar unless the transferring Holder delivers a notice substantially in the form of the Form of Assignment and Transfer, with the appropriate box checked, to the Trustee and the Company is reasonably satisfied that such transfer complies with the transfer restrictions set forth in the Restricted Notes Legend; and
(B) the Registrar will not register any transfer of any Note that is a Restricted Note to a Person that is an “affiliate” of the Company or has been an “affiliate” of the Company (within the meaning of Rule 144) within the three months immediately preceding the date of such proposed transfer, as certified in the relevant notice substantially in the form of the Form of Assignment and Transfer.
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(iv) On and after the Resale Restriction Termination Date, any Note will bear the Restricted Notes Legend at any time the Company determinates that, to comply with law, such Note must bear the Restricted Notes Legend.
(b) Restricted Stock.
(i) Every share of Common Stock that bears, or that is required under this Section 2.07(b) to bear, the Restricted Stock Legend will be deemed to be “Restricted Stock”. Each share of Restricted Stock will be subject to the restrictions on transfer set forth in this Indenture (including the Restricted Stock Legend) and will bear a restricted CUSIP number unless such restrictions on transfer are eliminated or otherwise waived by written consent (including, without limitation by the Company’s delivery of the Free Transferability Certificate as provided herein) of the Company, and each Holder of Restricted Stock, by such Holder’s acceptance of Restricted Stock, will be deemed to be bound by the restrictions on transfer applicable to such Restricted Stock.
(ii) Until the Resale Restriction Termination Date, any shares of Common Stock issued upon the conversion of a Restricted Note, will be issued in book-entry form and will bear the Restricted Stock Legend, unless the Company delivers written notice to the Trustee, the Registrar and the transfer agent for the Common Stock stating that such shares of Common Stock need not bear the Restricted Stock Legend.
(iii) On and after the Resale Restriction Termination Date, shares of Common Stock issued upon conversion of a Restricted Note will be issued in book-entry or certificated form (as determined by the Company) and will bear the Restricted Stock Legend at any time the Company reasonably determines that, to comply with law, such shares of Common Stock must bear the Restricted Stock Legend.
(c) As used in this Section 2.07, the term “transfer” means any sale, pledge, transfer, loan, hypothecation or other disposition whatsoever of any Restricted Note, any interest therein or any Restricted Stock.
Section 2.08 Expiration of Restrictions.
(a) Physical Notes. Any Physical Note (or any security issued in exchange or substitution therefor) that does not constitute a Restricted Note may be exchanged for a new Note or Notes of like tenor and aggregate principal amount that do not bear the Restricted Notes Legend. To exercise such right of exchange, the Holder of such Note must surrender such Note in accordance with the provisions of Section 2.11 and deliver any additional documentation reasonably required by the Company, the Trustee or the Registrar in connection with such exchange.
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(b) Restricted Global Notes; Resale Restriction Termination Date.
(i) If, on the Free Trade Date, or the next succeeding Business Day if the Free Trade Date is not a Business Day, any Notes are represented by a Global Note that is a Restricted Note (any such Global Note, a “Restricted Global Note”), the Company will use reasonable efforts to effect an exchange of every beneficial interest in each Restricted Global Note for beneficial interests in Global Notes that are not subject to the restrictions set forth in the Restricted Notes Legend and in Section 2.07 hereof on or prior to the De-Legending Deadline Date.
(ii) To effect such automatic exchange, the Company will (A) deliver to the Depositary an instruction letter for the Depositary’s mandatory exchange process within a period of time that is reasonably likely to result in such exchange occurring on or prior to the De-Legending Deadline Date and (B) deliver to each of the Trustee and the Registrar a duly completed Free Transferability Certificate promptly after the Free Trade Date. The first date on which both the Trustee and the Registrar have received the Free Transferability Certificate will be known as the “Resale Restriction Termination Date”.
(iii) Immediately upon receipt of the Free Transferability Certificate by each of the Trustee and the Registrar:
(A) the Restricted Notes Legend will be deemed removed from each of the Global Notes specified in such Free Transferability Certificate and the restricted CUSIP number will be deemed removed from each of such Global Notes and deemed replaced with an unrestricted CUSIP number specified in the relevant Free Transferability Certificate;
(B) the Restricted Stock Legend will be deemed removed from any shares of Common Stock previously issued upon conversion of the Notes; and
(C) thereafter, shares of Common Stock issued upon conversion of the Notes will be assigned an unrestricted CUSIP number and will not bear the Restricted Stock Legend (except as provided in Section 2.07(b)(iii)) or any similar legend.
(iv) [Reserved].
(v) Prior to the Company’s delivery of the Free Transferability Certificate and afterwards, the Company and the Trustee will comply with the Applicable Procedures and the Company will otherwise use reasonable efforts to cause each Global Note to be identified by an unrestricted CUSIP number in the facilities of the Depositary by the date the Free Transferability Certificate is delivered to the Trustee and the Registrar or as promptly as possible thereafter.
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(vi) Notwithstanding anything to the contrary in Sections 2.08(b)(i), (ii) or (iii), the Company will not be required to deliver the Free Transferability Certificate if it reasonably believes that removal of the Restricted Notes Legend or the changes to the CUSIP numbers for the Notes could result in or facilitate transfers of the Notes in violation of applicable law.
(vii) For the avoidance of doubt, a Global Note will not be “Freely Tradable” unless such Global Note is identified by an unrestricted CUSIP number in the facilities of the Depositary.
Section 2.09 Mutilated, Destroyed, Lost and Stolen Notes If any mutilated Note is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Note of like tenor and principal amount and bearing a number not contemporaneously Outstanding. If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Note and (ii) such security or indemnity as may be required by the Trustee (to protect the Trustee) and the Company to save each of them and any agent of either of them harmless and 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 Note has been acquired by a bona fide purchaser, the Company shall execute and the Trustee upon receipt of a Company Order shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a new Note of like tenor and principal amount and bearing a number not contemporaneously Outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section 2.09, the Company may require payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 2.09 in lieu of any destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note 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 Notes duly issued hereunder.
The provisions of this Section 2.09 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 stolen Notes.
Section 2.10 Persons Deemed Owners. Prior to due presentment of a Note for registration of transfer, the Company, the Trustee, the Registrar and any agent of the Company, the Trustee or the Registrar may treat the Person in whose name such Note is registered in the Register as the owner of such Note for the purpose of receiving payment of the principal of such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Company, the Trustee, the Registrar nor any agent of the Company, the Trustee or the Registrar shall be affected by notice to the contrary.
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Section 2.11 Transfer and Exchange.
(a) Provisions Applicable to All Transfers and Exchanges.
(i) Subject to the restrictions set forth in Section 2.07 and this Section 2.11, Physical Notes and beneficial interests in Global Notes may be transferred or exchanged from time to time as desired, and each such transfer or exchange will be noted by the Registrar in the Register.
(ii) All Notes issued upon any registration of transfer or exchange in accordance with this Indenture will be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.
(iii) No service charge will be imposed on any Holder of a Physical Note or any owner of a beneficial interest in a Global Note for any exchange or registration of transfer, but each of the Company, the Trustee or the Registrar may require such Holder or owner of a beneficial interest to pay a sum sufficient to cover any transfer tax, assessment or other governmental charge imposed in connection with such registration of transfer or exchange.
(iv) Unless the Company specifies otherwise, none of the Company, the Trustee, the Registrar or any co-Registrar will be required to exchange or register a transfer of any Note (i) selected for redemption, (ii) that has been surrendered for conversion or (iii) as to which a Fundamental Change Repurchase Notice has been delivered and not withdrawn, except to the extent any portion of such Note is not subject to the foregoing.
(v) The Trustee in each of its capacities will have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
(b) In General; Transfer and Exchange of Beneficial Interests in Global Notes. So long as the Notes are eligible for book-entry settlement with the Depositary, unless otherwise required by law, except to the extent required by Section 2.11(c):
(i) all Notes will be represented by one or more Global Notes;
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(ii) every transfer and exchange of a beneficial interest in a Global Note will be effected through the Depositary in accordance with the Applicable Procedures and the provisions of this Indenture (including the restrictions on transfer set forth in Section 2.07); and
(iii) each Global Note may be transferred only as a whole and only (A) by the Depositary to a nominee of the Depositary, (B) by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or (C) by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.
(c) Transfer and Exchange of Global Notes.
(i) Notwithstanding any other provision of this Indenture, each Global Note will be exchanged for Physical Notes if the Depositary delivers notice to the Company that:
(A) the Depositary is unwilling or unable to continue to act as Depositary; or
(B) the Depositary is no longer permitted under applicable law to continue as Depositary for such Global Note;
and, in each case, the Company promptly delivers a copy of such notice to the Trustee and the Company fails to appoint a successor Depositary within 90 days after receiving notice from the Depositary.
In each such case, each Global Note will be deemed surrendered to the Trustee for cancellation, and the Trustee will cause each Global Note to be cancelled in accordance with the Applicable Procedures, and the Company, in accordance with Section 2.04, will promptly execute, and, upon receipt of a Company Order, the Trustee will, in accordance with Section 2.04, will promptly authenticate and deliver, for each beneficial interest in each Global Note so exchanged, an aggregate principal amount of Physical Notes equal to the aggregate principal amount of such beneficial interest, registered in such names and in such authorized denominations as the Depositary specifies, and bearing any legends that such Physical Notes are required to bear under Section 2.07.
(ii) In addition, if (x) the Company, in its sole discretion, notifies the Trustee in writing that it wishes to terminate and exchange all or part of a Global Note for Physical Notes and the beneficial owners of the majority of the principal amount of such Global Note (or portion thereof) to be exchanged consent to such exchange, the Company may exchange all beneficial interests in such Global Note (or portion thereof) for Physical Notes by delivering a written request to the Registrar or (y) an Event of Default has occurred and is continuing with regard to the Notes represented by the relevant Global Note and such Event of Default has not been cured or waived, any owner of a beneficial interest in a Global Note may deliver a written request to the Registrar to exchange such beneficial interest for Physical Notes.
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In the case of subclause (y) above, (A) the Registrar will deliver notice of such request to the Company and the Trustee, which notice will identify the aggregate principal amount of such beneficial interest and the CUSIP number(s) of the relevant Global Note; (B) the Company will, in accordance with Section 2.04, promptly execute, and, upon receipt of a Company Order, the Trustee, in accordance with Section 2.04, will promptly authenticate and deliver, to such owner, for the beneficial interest so exchanged by such owner, Physical Notes registered in such owner’s name having an aggregate principal amount equal to the aggregate principal amount of such beneficial interest and bearing any legends that such Physical Notes are required to bear under Section 2.07(a), and (C) the Registrar, in accordance with the Applicable Procedures, will cause the principal amount of such Global Note to be decreased by the aggregate principal amount of the beneficial interest so exchanged. If all of the beneficial interests in a Global Note are so exchanged, such Global Note will be deemed surrendered to the Trustee for cancellation, and the Trustee will cause such Global Note to be cancelled in accordance with the Applicable Procedures.
(d) Transfer and Exchange of Physical Notes.
(i) If Physical Notes are issued, a Holder may transfer a Physical Note by: (A) surrendering such Physical Note for registration of transfer to the Registrar, together with any endorsements or instruments of transfer required by any of the Company, the Trustee or the Registrar; (B) if such Physical Note is a Restricted Note, delivering any documentation that the Company, the Trustee or the Registrar require to ensure that such transfer complies with Section 2.07 and, with respect to such documentation to be delivered to the Company, any applicable securities laws; and (C) satisfying all other requirements for such transfer set forth in this Section 2.11 and Section 2.07. Upon the satisfaction of conditions (A), (B) and (C), the Company, in accordance with Section 2.04, will promptly execute and deliver to the Trustee, and the Trustee, upon receipt of a Company Order, will, in accordance with Section 2.04, promptly authenticate and deliver, in the name of the designated transferee or transferees, one or more new Physical Notes, of any authorized denomination, having like aggregate principal amount and bearing any restrictive legends required by Section 2.07 and/or the Form of Note attached hereto as Exhibit A.
(ii) If Physical Notes are issued, a Holder may exchange a Physical Note for other Physical Notes of any authorized denominations and aggregate principal amount equal to the aggregate principal amount of the Notes to be exchanged by surrendering such Notes, together with any endorsements or instruments of transfer required by any of the Company, the Trustee or the Registrar, at any office or agency maintained by the Company for such purposes pursuant to Section 5.02. Whenever a Holder surrenders Notes for exchange, the Company, in accordance with Section 2.04, will promptly execute and deliver to the Trustee, and the Trustee, upon receipt of a Company Order, will, in accordance with Section 2.04, promptly authenticate and deliver the Notes that such Holder is entitled to receive, bearing registration numbers not contemporaneously outstanding and any restrictive legends that such Physical Notes are required to bear under Section 2.07.
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(iii) If Physical Notes are issued, a Holder may transfer or exchange a Physical Note for a beneficial interest in a Global Note by (A) surrendering such Physical Note for registration of transfer or exchange, together with any endorsements or instruments of transfer required by any of the Company, the Trustee or the Registrar, at any office or agency maintained by the Company for such purposes pursuant to Section 5.02; (B) if such Physical Note is a Restricted Note, delivering any documentation the Company, the Trustee or the Registrar reasonably require to ensure that such transfer complies with Section 2.07 and with respect to such documentation to be delivered to the Company any applicable securities laws; (C) satisfying all other requirements for such transfer set forth in this Section 2.11 and Section 2.07; and (D) providing written instructions to the Trustee to make, or to direct the Registrar to make, an adjustment in its books and records with respect to the applicable Global Note to reflect an increase in the aggregate principal amount of the Notes represented by such Global Note, which instructions will contain information regarding the Depositary account to be credited with such increase. Upon the satisfaction of conditions (A), (B), (C) and (D), the Trustee will cancel such Physical Note and cause, or direct the Registrar to cause, in accordance with the Applicable Procedures, the aggregate principal amount of Notes represented by such Global Note to be increased by the aggregate principal amount of such Physical Note, and will credit or cause to be credited the account of the Person specified in the instructions provided by the exchanging Holder in an amount equal to the aggregate principal amount of such Physical Note. If no Global Notes are then Outstanding, the Company, in accordance with Section 2.04, will promptly use reasonable efforts to execute and deliver to the Trustee, and the Trustee, upon receipt of a Company Order, will, in accordance with Section 2.04, authenticate, a new Global Note in the appropriate aggregate principal amount.
Section 2.12 Cancellation. The Company at any time may deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder that the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Notes previously authenticated hereunder which the Company has not issued and sold. The Notes acquired by the Company, while held by or on behalf of the Company or any of its Subsidiaries, shall not entitle the Holder thereof to convert the Notes.
The Registrar shall retain, in accordance with its customary procedures, copies of all letters, notices and other written communications received pursuant to this Section 2.12. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar.
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The Company will cause all Notes surrendered for payment at maturity, repurchase upon a Fundamental Change, Optional Redemption, registration of transfer or exchange or conversion, if surrendered to any person that the Company controls, to be delivered to the Trustee for cancellation and they will no longer be considered Outstanding under this Indenture upon their payment at maturity, repurchase upon a Fundamental Change, Optional Redemption, registration of transfer, or exchange or conversion. All Notes delivered to the Trustee shall be cancelled promptly by the Trustee. Except for Notes surrendered for registration of transfer or exchange, no Notes shall be authenticated in exchange for any Notes cancelled as provided in this Indenture.
The Company may, to the extent permitted by law and without the consent of Holders, directly or indirectly (regardless of whether such Notes are surrendered to the Company), repurchase Notes in the open market or otherwise, whether by the Company or any of its Subsidiaries or through a private or public tender or exchange offer or through counterparties to private agreements, including by cash-settled swaps or other derivatives. The Company may, at its option and to the extent permitted by applicable law, reissue, resell, or surrender to the Trustee for cancellation any Notes that it or they may repurchase, in the case of a reissuance or resale, so long as such Notes do not constitute Restricted Notes or “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act upon such reissuance or resale. Any Notes that Company may (or are required under this Indenture to) repurchase will be considered Outstanding for all purposes under this Indenture unless and until such time the Company surrenders them to the Trustee for cancellation and, upon receipt of a written order from the Company, the Trustee will cancel all Notes so surrendered. Notwithstanding the foregoing, Notes that the Company or any of its Affiliates own will be deemed not to be Outstanding for purposes of determining whether the Holders have concurred in any direction, waiver or consent under this Indenture; provided, however, that for purposes of determining whether the Trustee is protected in relying on any such direction, waiver or consent, only such Notes which a Responsible Officer of the Trustee actually knows to be so owned shall be disregarded.
Section 2.13 CUSIP Numbers. In issuing the Notes, the Company may use “CUSIP” numbers (if then generally in use); provided that the Trustee shall have no liability for any defect in the CUSIP numbers as they appear on any Notes, notice, or elsewhere and; provided further, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes and that reliance may be placed only on the other identification numbers printed on the Notes. The Company will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.
Section 2.14 Payment and Computation of Interest. The Notes will bear cash interest at a rate of 1.50% per year until the Maturity Date or the date of any earlier conversion, redemption or repurchase. Interest on the Notes will accrue from the most recent date on which interest has been paid or duly provided for or, if no interest has been paid or duly provided for (i) in the case of the Initial Notes, June 16, 2023 or (ii) in the case of the Additional Notes, the date provided under such Notes. Interest will be paid to the Person in whose name a Note is registered at the Close of Business on the Regular Record Date immediately preceding the relevant Interest Payment Date semiannually in arrears on each Interest Payment Date; provided, alternate record dates may be established by the Company and the Trustee with respect to any interest not paid on its originally scheduled due date. Interest on the Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month. For the avoidance of doubt, the payment, or lack of payment, of interest on Notes surrendered for conversion will be governed by Section 4.03(d).
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Section 2.15 Business Day. If any Interest Payment Date, the Maturity Date, any Redemption Date or any Fundamental Change Repurchase Date falls on a day that is not a Business Day, the required payment will be made on the next succeeding Business Day and no interest on such payment will accrue in respect of the delay.
ARTICLE 3.
REPURCHASE AT THE OPTION OF THE HOLDERS
Section 3.01 Repurchase at Option of Holders upon a Fundamental Change. If a Fundamental Change occurs at any time prior to the Maturity Date, then each Holder shall have the right, at such Holder’s option, to require the Company to repurchase for cash all or any portion of such Holder’s Notes such that the remaining principal amount of each Note that is not repurchased in full equals $1,000 or an integral multiple of $1,000 in excess thereof, on a date (the “Fundamental Change Repurchase Date”) specified by the Company that is not less than 20 Business Days or more than 35 Business Days following the date on which the Company delivers the Fundamental Change Company Notice, at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to, but excluding, the Fundamental Change Repurchase Date (the “Fundamental Change Repurchase Price”); provided, however, that if the Company repurchases a Note on a Fundamental Change Repurchase Date that is after a Regular Record Date and on or prior to the Interest Payment Date corresponding to such Regular Record Date, the Company shall instead pay the full amount of such accrued and unpaid interest on such Note on the Interest Payment Date to the Holder of record of such Note as of such Regular Record Date and the Fundamental Change Repurchase Price shall then be equal to 100% of the principal amount of the Note the Company repurchases on such Fundamental Change Repurchase Date; provided, further, that the Fundamental Change Repurchase Date may be postponed to allow the Company to comply with applicable law as a result of changes to such applicable law occurring after the date hereof. Notwithstanding the foregoing, there shall be no repurchase of any Notes pursuant to this Section 3.01 if the principal amount of the Notes has been accelerated, and such acceleration has not been rescinded, on or prior to the Fundamental Change Repurchase Date (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Repurchase Price with respect to such Notes). The Paying Agent will promptly return to the respective Holders thereof any Physical Notes held by it during the acceleration of the Notes (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Repurchase Price with respect to such Notes) and shall deem to be cancelled any instructions for book-entry transfer of the Notes in compliance with the Applicable Procedures, in which case, upon such return or cancellation, as the case may be, the Fundamental Change Repurchase Notice with respect thereto shall be deemed to have been withdrawn.
Section 3.02 Fundamental Change Company Notice.
General. Promptly (but in no event later than ten Business Days) after the occurrence of a Fundamental Change, the Company shall provide to all Holders of the Notes, the Trustee and the Paying Agent (in the case of any Paying Agent other than the Trustee) a written notice (the “Fundamental Change Company Notice”) of the occurrence of such Fundamental Change and of the repurchase right at the option of the Holders arising as a result thereof. Such notice shall be sent by first class mail or, in the case of any Global Notes, in accordance with the Applicable Procedures for providing notices. Simultaneously with providing such Fundamental Change Company Notice, the Company shall publish a press release or publish such information on the Company’s website. Each Fundamental Change Company Notice shall specify:
(i) the events causing the Fundamental Change;
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(ii) the Effective Date of the Fundamental Change;
(iii) the last date on which a Holder of Notes may exercise the repurchase right pursuant to Section 3.01;
(iv) the Fundamental Change Repurchase Price;
(v) the Fundamental Change Repurchase Date;
(vi) the name and address of the Paying Agent and the Conversion Agent, if applicable;
(vii) the applicable Conversion Rate and any adjustments to the applicable Conversion Rate resulting from the Fundamental Change;
(viii) whether such Fundamental Change also constitutes a Make-Whole Fundamental Change;
(ix) if applicable, that the Notes with respect to which a Fundamental Change Repurchase Notice has been delivered by a Holder may be converted only if the Holder withdraws the Fundamental Change Repurchase Notice in accordance with this Indenture;
(x) that the Holder must exercise the repurchase right prior to the Fundamental Change Expiration Time;
(xi) that the Holder shall have the right to withdraw any Notes surrendered for repurchase prior to the Fundamental Change Expiration Time; and
(xii) the procedures that Holders must follow to require the Company to repurchase their Notes.
(b) No failure of the Company to give the foregoing notices and no defect therein shall limit the Holders’ repurchase rights or affect the validity of the proceedings for the repurchase of the Notes pursuant to Section 3.01.
(c) At the Company’s written request, the Trustee shall give such notice in the Company’s name and at the Company’s expense; provided, however, that, in all cases, the text of such Fundamental Change Company Notice shall be prepared by the Company; provided, further that the Company shall have delivered to the Trustee, at least five (5) Business Days before the Fundamental Change Company Notice is required to be mailed (or such shorter period agreed to by the Trustee), an Officer’s Certificate
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requesting that the Trustee give such notice and setting forth the complete form of such notice and the information to be stated in such notice. Neither the Trustee nor the Paying Agent shall be responsible for determining if a Fundamental Change has occurred or for delivering a Fundamental Change Company Notice to Holders.
Section 3.03 Repurchase Procedures.
(a) Repurchases of Notes under Section 3.01 shall be made, at the option of the Holder thereof, upon:
(i) if the Notes to be repurchased are Physical Notes, delivery to the Paying Agent by the Holder of a duly completed notice (the “Fundamental Change Repurchase Notice”), in the form set forth in Attachment 2 to the Form of Note attached hereto as Exhibit A, together with the Notes duly endorsed for transfer, prior to Close of Business on the Business Day immediately preceding the Fundamental Change Repurchase Date, (the “Fundamental Change Expiration Time”); and
(ii) if the Notes to be repurchased are Global Notes, delivery of the Notes, by book-entry transfer, in compliance with the Applicable Procedures and the satisfaction of any other requirements of the Depositary in connection with delivering beneficial interests in a Global Note for repurchase, by the Fundamental Change Expiration Time.
The Fundamental Change repurchase Notice in respect of any Notes to be repurchased shall state:
(i) if certificated, the certificate numbers of such Notes;
(ii) the portion of the principal amount of such Notes to be repurchased, which must be such that the principal amount of each Note that is not to be repurchased in full equals $1,000 or an integral multiple of $1,000 in excess thereof; and
(iii) that such Notes are to be repurchased by the Company pursuant to the applicable provisions of the Notes and this Indenture.
Notwithstanding anything to the contrary contained in this Article 3, the Company will not be required to give the Fundamental Change Repurchase Notice or to repurchase the Notes as described in this Article 3 upon a Fundamental Change pursuant to clause (2) of the definition thereof (or a Fundamental Change pursuant to clause (2) which also results in a Fundamental Change pursuant to clause (1)) if (1) such Fundamental Change results in the Notes becoming convertible (pursuant to the provisions of Section 4.07) into an amount of cash per $1,000 principal amount of Notes (which is a fixed aggregate amount of cash that is required to be delivered upon conversion under the supplemental indenture for such Fundamental Change, excluding any cash payable as a result of any Settlement Method Election or cash paid in lieu of fractional shares) that is greater than the Fundamental Change Repurchase Price per $1,000 principal amount of Notes (assuming the maximum amount of accrued interest would be payable based on the latest possible Fundamental Change Repurchase Date) and (2) the Company provides timely notice of the Holders’ right to convert their Notes based on such Fundamental Change as described above under Section 4.01(b)(iv).
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(a) Notice to Company. The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Repurchase Notice or written notice of withdrawal thereof.
Section 3.04 Effect of Fundamental Change Repurchase Notice. Upon receipt by the Paying Agent of a Fundamental Change Repurchase Notice specified in Section 3.03, the Holder of the Note in respect of which such Fundamental Change Repurchase Notice was given shall (unless such Fundamental Change Repurchase Notice is withdrawn in accordance with Section 3.05) thereafter be entitled to receive solely the Fundamental Change Repurchase Price in cash with respect to such Note (and any previously accrued and unpaid interest on such Note). Such Fundamental Change Repurchase Price shall be paid to such Holder, subject to receipt of funds by the Paying Agent, on the later of (x) the applicable Fundamental Change Repurchase Date (provided the conditions in this Article 3 have been satisfied) and (y) the time of delivery or book-entry transfer of such Note to the Paying Agent by the Holder thereof in the manner required by Section 3.01.
Section 3.05 Withdrawal of Fundamental Change Repurchase Notice. A Fundamental Change Repurchase Notice may be withdrawn (in whole or in part) by means of a written notice of withdrawal delivered to the Paying Agent and the Trustee in accordance with the Fundamental Change Company Notice at any time prior to the Fundamental Change Expiration Time specifying:
(a) the principal amount of the Notes with respect to which such notice of withdrawal is being submitted;
(b) if certificated, the certificate numbers of the withdrawn Notes; and
(c) the principal amount, if any, of each Note that remains subject to the Fundamental Change Repurchase Notice which must be such that the principal amount not to be repurchased equals $1,000 or an integral multiple of $1,000 in excess thereof;
provided, however, that if the Notes are Global Notes, the notice must comply with the Applicable Procedures.
The Paying Agent will promptly return to the respective Holders thereof any Physical Notes with respect to which a Fundamental Change Repurchase Notice, has been withdrawn in compliance with the provisions of this Section 3.05.
Section 3.06 Deposit of Fundamental Change Repurchase Price. Prior to 11:00 a.m., New York City time, on the Fundamental Change Repurchase Date the Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of them is acting as the Paying Agent, shall segregate and hold in trust as provided herein) an amount of money (in immediately available funds if deposited on such Business Day) sufficient to pay the Fundamental Change Repurchase Price of all the Notes or portions thereof that are to be
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repurchased as of the Fundamental Change Repurchase Date. If the Paying Agent holds cash sufficient to pay the Fundamental Change Repurchase Price of the Notes for which a Fundamental Change Repurchase Notice has been delivered and not withdrawn in accordance with this Indenture on the Fundamental Change Repurchase Date then as of such Fundamental Change Repurchase Date, with respect to the Notes that have been property surrendered for repurchase and have not been fully withdrawn: (a) such Notes will cease to be Outstanding and interest will cease to accrue thereon (whether or not book-entry transfer of such Notes is made or such Notes have been delivered to the Paying Agent) and (b) all other rights of the Holders in respect thereof will terminate (other than the right to receive the Fundamental Change Repurchase Price and any previously accrued and unpaid interest on such Notes upon delivery or book-entry transfer of such Notes).
Section 3.07 Notes Repurchased in Whole or in Part. Any Note that is to be repurchased pursuant to this Article 3, whether in whole or in part, shall be surrendered at the office of the Paying Agent (with 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 such Holder’s attorney duly authorized in writing) and, to the extent that only a part of the Note so surrendered is to be repurchased, the Company shall execute and, upon receipt of a Company Order, the Trustee shall authenticate and deliver to the Holder of such Note, without service charge, a new Note or Notes, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Note so surrendered that is not repurchased.
Section 3.08 Covenant To Comply with Applicable Laws upon Repurchase of Notes. In connection with any offer to repurchase Notes under Section 3.01, the Company shall, in each case if required by law (i) comply with the provisions of the tender offer rules under the Exchange Act that may then be applicable, (ii) file a Schedule TO or any other required schedule under the Exchange Act and (iii) otherwise comply with all U.S. federal or state securities laws applicable to the Company in connection with such repurchase offer, in each case, so as to permit the rights and obligations under this Article 3 to be exercised in the time and in the manner specified under this Article 3.
Section 3.09 Repayment to the Company. To the extent that the aggregate amount of cash deposited by the Company pursuant to Section 3.06 exceeds the aggregate Fundamental Change Repurchase Price of the Notes or portions thereof that the Company is obligated to repurchase as of the Fundamental Change Repurchase Date then, following the Fundamental Change Repurchase Date the Paying Agent shall promptly return any such excess to the Company.
Section 3.10 Satisfaction of the Company’s Fundamental Change Repurchase Obligations. Notwithstanding anything to the contrary contained in this Article 3, in the case of a Fundamental Change pursuant to clauses (1) and/or (2) of the definition thereof, the Company will not be required to make an offer to repurchase Notes upon the occurrence of such Fundamental Change as would otherwise be required to the extent, and solely to the extent, that the other party to such Fundamental Change (or its Affiliate) (i) makes such an offer to purchase the Notes in the same manner, at the same time and otherwise in compliance with the requirements set forth herein that would be applicable to such an offer by the Company (including, without limitation, the requirement to comply with applicable securities laws) and (ii)
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purchases all Notes properly tendered and not validly withdrawn under such offer to repurchase all in compliance with the requirements set forth herein (including, without limitation, the requirement to pay the applicable Fundamental Change Repurchase Price on the later of the applicable Fundamental Change Repurchase Date and the time of book-entry transfer or delivery of the relevant Notes); provided that, the Company will continue to be obligated to (x) deliver the applicable Fundamental Change Company Notice to the Holders, the Trustee and the Paying Agent (which Fundamental Change Company Notice, in addition to the requirements set forth above, will state that such party will make such an offer to purchase the Notes) and to, simultaneously with such Fundamental Change Company Notice, issue a press release containing such information or make such information available on the Company’s website, in each case, in the event such party fails to give such notice or issue such press release or make such information available on its website, as applicable, (y) comply with applicable securities laws in connection with any such purchase and (z) pay the applicable Fundamental Change Repurchase Price on the later of the applicable Fundamental Change Repurchase Date and the time of book-entry transfer or delivery of the relevant Notes in the event such party fails to make such payment in such amount at such time. The provisions of this paragraph will be limited to the matters set forth above and shall not be deemed or otherwise construed to (a) limit any of the Company’s obligations under this Indenture or the Notes (except solely to the extent expressly set forth in this paragraph and subject to the conditions set forth above in this paragraph) or (b) prejudice any right, power or remedy which the Trustee or Holders of the Notes may then have or may have in the future under or in connection with this Indenture or the Notes.
ARTICLE 4.
CONVERSION
Section 4.01 Right to Convert(a) . (a) Subject to and upon compliance with the provisions of the Indenture, each Holder shall have the right, at such Holder’s option, to convert any or all of its Notes, or any portion thereof, such that the principal amount that remains Outstanding of each Note that is not converted in full equals $1,000 or an integral multiple of $1,000 in excess thereof, into the Settlement Amount determined in accordance with Section 4.03(a)(ii) hereof, (x) prior to the Close of Business on the Business Day immediately preceding September 15, 2029, only upon satisfaction of one or more of the conditions described in Section 4.01(b) hereof, and (y) on or after September 15, 2029, until the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date regardless of the conditions described in Section 4.01(b) hereof.
(b) (i) Prior to the Close of Business on the Business Day immediately preceding September 15, 2029, a Holder may surrender all or a portion of its Notes for conversion during any fiscal quarter commencing after September 30, 2023 (and only during such fiscal quarter) if the Last Reported Sale Price of the Common Stock for at least 20 Trading Days (whether or not consecutive) during the period of 30 consecutive Trading Days ending on the last Trading Day of the immediately preceding fiscal quarter is greater than or equal to 130% of the applicable Conversion Price for the Notes in effect on each applicable Trading Day.
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(ii) Prior to the Close of Business on the Business Day immediately preceding September 15, 2029, a Holder may surrender all or a portion of its Notes for conversion at any time during the five consecutive Business Day period after any five consecutive Trading Day period (the “Measurement Period”) in which the Trading Price per $1,000 principal amount of Notes, as determined following a request by a Holder of such Notes in accordance with the procedures set forth in this Section 4.01(b)(ii), for each Trading Day of such Measurement Period was less than 98% of the product of (x) the Last Reported Sale Price of the Common Stock on each such Trading Day and (y) the Conversion Rate for the Notes in effect on each such Trading Day. The Trading Price shall be determined by the Company or the Bid Solicitation Agent, as applicable, pursuant to this Section 4.01(b)(ii) and the definition of “Trading Price” set forth in Section 1.01 hereof. The Company shall provide written notice to the Bid Solicitation Agent of the three independent nationally recognized securities dealers selected by the Company in accordance with the definition of Trading Price, along with the appropriate contact information for each, and shall direct those securities dealers to provide bids to the Bid Solicitation Agent. The Bid Solicitation Agent (if other than the Company) shall have no obligation to solicit bids in respect of the Notes unless the Company has requested that it do so; and the Company shall have no obligation to make such request (or, if the Company is acting as Bid Solicitation Agent, the Company shall have no obligation to solicit bids in respect of the Notes) unless a Holder of at least $2,000,000 principal amount of Notes (or such lesser principal amount of notes as may then be outstanding) provides it with reasonable evidence that the Trading Price per $1,000 principal amount of Notes would be less than 98% of the product of (x) the Last Reported Sale Price of the Common Stock on such Trading Day and (y) the Conversion Rate in effect on such Trading Day and such Holder, if the Company is not acting as the Bid Solicitation Agent, requests that the Company request that the Bid Solicitation Agent determine, or, if the Company is acting as the Bid Solicitation Agent, requests that the Company determine, the Trading Price of the Notes. At such time, the Company shall instruct the Bid Solicitation Agent (if other than the Company) to solicit such bids and the Company shall determine the Trading Price per $1,000 principal amount of the Notes (or, if the Company is acting as Bid Solicitation Agent, it shall determine the Trading Price per $1,000 principal amount of the Notes) beginning on the next Trading Day and on each successive Trading Day until the Trading Price per $1,000 principal amount of Notes for a Trading Day is greater than or equal to 98% of the product of (x) the Last Reported Sale Price of the Common Stock on such Trading Day and (y) the Conversion Rate in effect on such Trading Day. Whenever the condition to conversion set forth in this Section 4.01(b)(ii) has been met, the Company shall so notify in writing the Holders, the Trustee and the Conversion Agent (if other than the Trustee). If, at any time after the condition to conversion set forth in this Section 4.01(b)(ii) has been met, the condition to conversion set forth in this Section 4.01(b) (ii) ceases to be met, the Company will so notify in writing the Holders, the Trustee and the Conversion Agent (if other than the Trustee). The Trustee shall have no obligation to determine the Trading Price of the Notes.
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(iii) If the Company (x) issues to all or substantially all holders of the Common Stock any rights, options or warrants (other than any issuance of any rights, options or warrants issued under a stockholder rights plan that are (A) transferable with shares of Common Stock, including shares of Common Stock delivered upon conversion, and (B) not exercisable until the occurrence of a triggering event; provided that such rights, options or warrants will be deemed issued under this subclause (x) upon the separation of such rights, options or warrants from the Common Stock, or upon the occurrence of such triggering event) entitling them for a period of not more than 60 calendar days after the date of such issuance to subscribe for or purchase shares of the Common Stock, at a price per share less that is than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance; or (y) distributes to all or substantially all holders of the Common Stock the Company’s assets, debt securities or rights to purchase the Company’s securities (other than (A) rights described in the immediately preceding subclause (x) or (B) any issuance of any rights, options or warrants issued under a stockholder rights plan that are (1) transferable with shares of Common Stock, including shares of Common Stock delivered upon conversion, and (2) not exercisable until the occurrence of a triggering event), which distribution has a per share value, as reasonably determined by the Company in good faith and in a commercially reasonable manner, exceeding 10% of the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the date of announcement of such distribution, then, in either case, the Company must deliver notice in writing of such issuance or distribution, and of the Ex-Dividend Date for such issuance or distribution, to the Holders, the Trustee and the Conversion Agent at least 32 Scheduled Trading Days prior to the Ex-Dividend Date for such issuance or distribution. After the Company has delivered such notice, Holders may surrender all or any portion of their Notes to the Conversion Agent for conversion at any time until the earlier of (a) Close of Business on the Business Day immediately preceding such Ex-Dividend Date and (b) the Company’s announcement that such issuance or distribution will not take place, even if the Notes are not otherwise convertible at such time. Holders may not exercise this right if they participate (other than in the case of a share split or share combination), at the same time and upon the same terms as holders of Common Stock and solely as a result of holding the Notes, in any of the transactions described above without having to convert their Notes as if they held a number of shares of Common Stock equal to the applicable Conversion Rate multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.
(iv) If (A) a transaction or event constituting a Fundamental Change or a Make-Whole Fundamental Change occurs (regardless of whether the Holders would have the right to require the Company to purchase their Notes pursuant to Article 3), or (B) the Company is a party to a consolidation, merger, binding share exchange, or transfer or lease of all or substantially all of its assets (other than a merger effected solely to change the Company’s jurisdiction of incorporation solely within the United States) that (I) does not otherwise constitute a
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Fundamental Change or a Make-Whole Fundamental Change and (II) results in a reclassification, conversion or exchange of outstanding shares of the Company’s Common Stock solely into common stock of the surviving entity, which shares are listed on the New York Stock Exchange, The Nasdaq Global Market or The Nasdaq Global Select Market (or any of their respective successors), and such successor entity is a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, that occurs prior to the Close of Business on the Business Day immediately preceding September 15, 2029, and pursuant to which the Common Stock would be converted to cash, securities or other assets, then, in each case, all or any portion of a Holder’s Notes may be surrendered for conversion at any time from or after the effective date of the transaction until the 35th Trading Day after such effective date or, if such transaction also constitutes a Fundamental Change, until the related Fundamental Change Repurchase Date. The Company will notify in writing Holders, the Trustee and the Conversion Agent (if other than the Trustee) no later than the actual Effective Date of such transaction. The Trustee shall have no duty to determine whether any of the conditions to conversion have occurred.
(v) If the Company calls any Note for redemption pursuant to Article 11, then a Holder of such Note may surrender such Note for conversion at any time prior to the Close of Business on the second Business Day immediately preceding the Redemption Date, even if such Note is not otherwise convertible at such time. After that time, the right to convert such Note on account of the Company’s delivery of the Redemption Notice shall expire, unless the Company defaults in the payment of the Redemption Price, in which case a Holder of such Note may convert such Note until the Close of Business on the Business Day immediately preceding the date on which the Redemption Price has been paid or duly provided for.
Section 4.02 Conversion Procedures.
(a) Each Note shall be convertible at the office of the Conversion Agent and, if applicable, in accordance with the Applicable Procedures.
(b) To exercise the conversion privilege with respect to a beneficial interest in a Global Note, the Holder must comply with the Applicable Procedures for converting a beneficial interest on a Global Note and pay the funds, if any, required by Section 4.02(f) and any taxes or duties if required pursuant to Section 4.02(g), and the Conversion Agent must be informed of the conversion in accordance with the customary practice of the Depositary.
To exercise the conversion privilege with respect to any Physical Notes, the Holder of such Physical Notes shall:
(i) complete and manually sign a conversion notice in the form set forth in the Form of Notice of Conversion (the “Conversion Notice”) or a facsimile of the Conversion Notice;
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(ii) deliver the Conversion Notice, which is irrevocable, and the Physical Note to the Conversion Agent;
(iii) if required, furnish appropriate endorsements and transfer documents;
(iv) if required, pay all transfer or similar governmental charges or duties as set forth in Section 4.02(g); and
(v) if required, make any payment required under Section 4.02(f).
If a Note has been submitted for repurchase pursuant to a Fundamental Change Repurchase Notice such Note may not be converted except to the extent such Note has been withdrawn by the Holder and is no longer submitted for repurchase pursuant to a Fundamental Change Repurchase Notice or unless such Fundamental Change Repurchase Notice is withdrawn in accordance with Section 3.05 hereof prior to the relevant Fundamental Change Expiration Time. If a Holder submits its Notes for required repurchase, the Holder’s right to withdraw the Fundamental Change Repurchase Notice and convert the Notes that are subject to repurchase will terminate at the Close of Business on the Business Day immediately preceding the relevant Fundamental Change Repurchase Date.
For any Note, the date on which the Holder of such Note satisfies all of the applicable requirements set forth above with respect to such Note shall be the “Conversion Date” with respect to such Note.
Each conversion shall be deemed to have been effected as to any such Notes (or portion thereof) surrendered for conversion at the Close of Business on the applicable Conversion Date; provided, however, that except to the extent required by Section 4.04 hereof, the Person in whose name any shares of Common Stock shall be issuable upon conversion, if any, shall be treated as a stockholder of record (i) as of the Close of Business on the last VWAP Trading Day of the applicable Observation Period in the case of Combination Settlement and (ii) as of the Close of Business on the Conversion Date in the case of Physical Settlement. For the avoidance of doubt, until a Holder is deemed to become the holder of record of shares of Common Stock issuable upon conversion of such Holder’s Notes as contemplated in the immediately preceding sentence, such Holder shall not have any rights as a holder of the Common Stock with respect to the shares of Common Stock issuable upon conversion of such Notes. At the Close of Business on the Conversion Date for a Note, the converting Holder shall no longer be the Holder of such Note.
(c) Endorsement. Any Notes surrendered for conversion shall, unless shares of Common Stock issuable on conversion are to be issued in the same name as the registration of such Notes, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the Holder or its duly authorized attorney.
(d) Physical Notes. If any Physical Notes in a denomination greater than $1,000 shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of the Physical Notes so surrendered, without charge, new Physical Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Physical Notes.
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(e) Global Notes. Upon the conversion of a beneficial interest in Global Notes, the Conversion Agent shall make a notation in its records as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in writing of any conversions of Notes effected through any Conversion Agent other than the Trustee.
(f) Interest Due Upon Conversion. If a Holder converts a Note after the Close of Business on a Regular Record Date but prior to the Open of Business on the Interest Payment Date corresponding to such Regular Record Date, such Holder must accompany such Note with an amount of cash equal to the amount of interest that will be payable on such Note on the corresponding Interest Payment Date; provided, however, that a Holder need not make such payment (1) if the Conversion Date occurs after the Close of Business on the Regular Record Date immediately preceding the Maturity Date; (2) if the Company has specified a Redemption Date that is after a Regular Record Date and on or prior to the second Business Day immediately following the corresponding Interest Payment Date; (3) if the Company has specified a Fundamental Change Repurchase Date that is after a Regular Record Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date; or (4) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such Notes.
(g) Taxes Due upon Conversion. If a Holder converts a Note, the Company will pay any documentary, stamp or similar issue or transfer tax due on the issue of any shares of the Common Stock upon the conversion, unless the tax is due because the Holder requests that any shares be issued in a name other than the Holder’s name, in which case the Holder will be required to pay that tax.
Section 4.03 Settlement Upon Conversion.
(a) Settlement. Subject to this Section 4.03 and Sections 4.04 and 4.06 hereof, upon conversion of any Note, the Company shall pay or deliver, as the case may be, to Holders, in full satisfaction of its conversion obligation under Section 4.01 hereof, in respect of each $1,000 principal amount of Notes being converted, a Settlement Amount consisting of, at the election of the Company, solely cash (“Cash Settlement”), solely shares of Common Stock (together with cash in lieu of delivering any fractional share of Common Stock pursuant to Section 4.03(b)) (“Physical Settlement”) or a combination of cash and shares of Common Stock (“Combination Settlement”).
(i) Settlement Election. All conversions for which the relevant Conversion Date occurs on or after September 15, 2029, and all conversions for which the relevant Conversion Date occurs after the Company’s issuance of a Redemption Notice and on or prior to the second Business Day before the related Redemption Date, shall be settled using the same Settlement Method; provided that if such related Redemption Date is on or after September 15, 2029, then such
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Settlement Method must be the same Settlement Method that applies to all conversions with a Conversion Date that occurs on or after September 15, 2029. Except for any conversions for which the relevant Conversion Date occurs after the Company’s issuance of a Redemption Notice but on or prior to the second Business Day before the related Redemption Date, and any conversions for which the relevant Conversion Date occurs on or after September 15, 2029, the Company shall use the same Settlement Method for all conversions occurring on the same Conversion Date, but the Company shall not have any obligation to use the same Settlement Method with respect to conversions that occur on different Conversion Dates. If the Company elects a Settlement Method (a “Settlement Election”) and a Specified Dollar Amount, if applicable (a “Specified Dollar Amount Election”), the Company shall provide to the Holders so converting, the Conversion Agent and the Trustee a notice of such Settlement Method (each such notice, a “Settlement Election Notice”) or such Specified Dollar Amount (each such notice, a “Specified Dollar Amount Election Notice”) no later than the Close of Business on the Business Day immediately following the related Conversion Date (or (x) in the Redemption Notice, if applicable or (y) in the case of any conversions occurring on or after September 15, 2029, no later than the Close of Business on the Business Day immediately preceding September 15, 2029. If the Company does not timely elect a Settlement Method, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement with respect to any conversions on such Conversion Date or during such period, as the case may be, and the Company shall be deemed to have elected the Default Settlement Method. If the Company elects Combination Settlement but does not timely notify converting Holders of the Specified Dollar Amount per $1,000 principal amount of Notes, such Specified Dollar Amount will be deemed to be $1,000.
(ii) Settlement Amount. The cash, shares of Common Stock or combination of cash and shares of Common Stock in respect of any conversion of Notes (the “Settlement Amount”) shall be computed as follows:
(A) if the Company elects Physical Settlement, the Company shall deliver to the converting Holder, in respect of each $1,000 principal amount of its Notes being converted, a number of shares of Common Stock equal to the applicable Conversion Rate in effect on the relevant Conversion Date, together with cash in lieu of delivering any fractional shares of Common Stock pursuant to Section 4.03(b);
(B) if the Company elects (or is deemed to have elected) Cash Settlement, the Company shall pay to the converting Holder, in respect of each $1,000 principal amount of its Notes being converted, cash in an amount equal to the sum of the Daily Conversion Values for each of the 25 consecutive VWAP Trading Days during the related Observation Period; and
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(C) if the Company elects (or is deemed to have elected) Combination Settlement, the Company shall pay or deliver, as the case may be, to the converting Holder, in respect of each $1,000 principal amount of its Notes being converted, an amount of cash and number of shares of Common Stock, if any, equal to the sum of the Daily Settlement Amounts for each of the 25 consecutive VWAP Trading Days during the related Observation Period.
(iii) Delivery Obligation. The Company shall pay or deliver, as the case may be, the Settlement Amount due in respect of its conversion obligation under this Section 4.03, (x) on the second Business Day immediately following the relevant Conversion Date, if the Company elects Physical Settlement and (y) on the second Business Day immediately following the last VWAP Trading Day of the related Observation Period, if the Company elects Cash Settlement or Combination Settlement.
(iv) The Company’s Right to Irrevocably Fix the Settlement Method. The Company will have the right, exercisable at its election by sending notice of such exercise to the Holders (with a copy to the Trustee and the Conversion Agent), to (1) irrevocably fix the Settlement Method that will apply to all conversions of Notes with a Conversion Date that occurs on or after the date such notice is sent to Holders; or (2) irrevocably eliminate any one or more (but not all) Settlement Methods (including eliminating Combination Settlement with a particular Specified Dollar Amount or range of Specified Dollar Amounts) with respect to all conversions of Notes with a Conversion Date that occurs on or after the date such notice is sent to Holders, provided, in each case, that (w) the Settlement Method so elected pursuant to clause (1)above, or the Settlement Method(s) remaining after any elimination pursuant to clause (2) above, as applicable, must be a Settlement Method or Settlement Method(s), as applicable, that the Company is then permitted to elect (for the avoidance of doubt, including pursuant to, and subject to, the other provisions of this Section 4.03(a)); (x) no such irrevocable election will affect any Settlement Method theretofore elected (or deemed to be elected) with respect to any Note pursuant to this Indenture (including pursuant to Section 8.01(l) or this Section 4.03(a)); (y) upon any such irrevocable election pursuant to clause (1) above, the Default Settlement Method will automatically be deemed to be set to the Settlement Method so fixed; and (z) upon any such irrevocable election pursuant to clause (2) above, the Company will, if needed, simultaneously change the Default Settlement Method to a Settlement Method that is consistent with such irrevocable election. Such notice, if sent, must set forth the applicable Settlement Method(s) so elected or eliminated, as applicable, and the Default Settlement Method applicable immediately after such election, and expressly state that such election is irrevocable and applicable to all conversions of Notes with a Conversion Date that occurs on or after the date such notice is sent to Holders. For the avoidance of doubt, such an irrevocable election, if made, will be effective without the need to amend this Indenture or the Notes, including pursuant to Section 8.01(l) (it being understood, however, that the Company may nonetheless choose to execute such an amendment at its option).
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(v) Requirement to Publicly Disclose the Fixed or Default Settlement Method. If the Company changes the Default Settlement Method pursuant to clause (x) of the proviso to the definition of such term or irrevocably fixes the Settlement Method(s) pursuant to Section 4.03(a)(iv), then the Company will either post the Default Settlement Method or fixed Settlement Method(s), as applicable, on its website or disclose the same in a Current Report on Form 8-K (or any successor form) that is filed with, or furnished to, the SEC.
(b) Fractional Shares. Notwithstanding the foregoing, the Company will not issue fractional shares of Common Stock as part of the Settlement Amount due with respect to any converted Note. Instead, if any Settlement Amount includes a fraction of a share of the Common Stock, the Company will, in lieu of delivering such fraction of a share of Common Stock, pay an amount of cash equal to the product of such fraction of a share and (i) in a Physical Settlement, the Daily VWAP on the relevant Conversion Date, or if such Conversion Date is not a VWAP Trading Day, the immediately preceding VWAP Trading Day or (ii) in a Combination Settlement, the Daily VWAP on the last VWAP Trading Day of the relevant Observation Period (subject to Section 4.03(c) immediately below).
(c) Conversion of Multiple Notes by a Single Holder. If a Holder surrenders more than one Note for conversion on a single Conversion Date or with respect to which a single Observation Period (including, for the avoidance of doubt, the same VWAP Trading Days therein) would apply, the Company will calculate the amount of cash and the number of shares of Common Stock due with respect to such Notes as if such Holder had surrendered for conversion one Note having an aggregate principal amount equal to the sum of the principal amounts of each of the Notes surrendered for conversion by such Holder on the same Conversion Date.
(d) Settlement of Accrued Interest and Deemed Payment of Principal. If a Holder converts a Note, the Company will not adjust the Conversion Rate to account for any accrued and unpaid interest on such Note, and the Company’s delivery or payment, as the case may be, of cash, shares of Common Stock or a combination of cash and shares of Common Stock into which a Note is convertible will be deemed to satisfy and discharge in full the Company’s obligation to pay the principal of, and accrued and unpaid interest, if any, on, such Note to, but excluding, the Conversion Date; provided, however, that subject to Section 4.02(f), if a Holder converts a Note after the Close of Business on a Regular Record Date and prior to the Open of Business on the corresponding Interest Payment Date, the Company will still be obligated to pay the interest due on such Interest Payment Date to the Holder of such Note on such Regular Record Date.
As a result, except as otherwise provided in the proviso to the immediately preceding sentence, any accrued and unpaid interest with respect to a converted Note will be deemed to be paid in full rather than cancelled, extinguished or forfeited. In addition, if the Settlement Amount for any Note includes both cash and shares of the Common Stock, accrued and unpaid interest will be deemed to be paid first out of the amount of cash delivered upon such conversion.
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(e) Notices. Whenever a Conversion Date occurs with respect to a Note, the Conversion Agent will, as promptly as possible, and in no event later than the Open of Business on the Business Day immediately following such Conversion Date, deliver to the Company and the Trustee, if it is not then the Conversion Agent, notice that a Conversion Date has occurred, which notice will state such Conversion Date, the principal amount of Notes converted on such Conversion Date and the names of the Holders that converted Notes on such Conversion Date.
On the first Business Day immediately following the last VWAP Trading Day of the Observation Period applicable to any Note surrendered for conversion in a Cash Settlement or a Combination Settlement, the Company will deliver a written notice to the Conversion Agent and the Trustee (if not also the Conversion Agent) stating the amount of cash and the number of shares of Common Stock, if any, that the Company is obligated to pay or deliver, as the case may be, to satisfy its conversion obligation with respect to each Note converted on such Conversion Date.
Section 4.04 Adjustment of Conversion Rate. The Conversion Rate will be adjusted as described in this Section 4.04, except that the Company shall not make any adjustment to the Conversion Rate if Holders participate (other than in the case of a share split or share combination) at the same time and upon the same terms as holders of the Common Stock and as a result of holding the Notes, in any of the transactions described below without having to convert their Notes, as if they held a number of shares of Common Stock equal to the applicable Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.
(a) If the Company exclusively issues shares of Common Stock as a dividend or distribution on shares of the Common Stock, or if the Company effects a share split or share combination, the Conversion Rate will be adjusted based on the following formula:
| CR1 = | CR0 x | OS1 | ||||
| OS0 |
| where, | ||
| CR0 = | the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date of such dividend or distribution, or immediately prior to the Open of Business on the effective date of such share split or combination, as applicable; | |
| CR1 = | the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date or such effective date, as applicable; | |
| OS0 = | the number of shares of Common Stock outstanding immediately prior to the Open of Business on such Ex-Dividend Date or such effective date, as applicable (before giving effect to any such dividend or distribution); and | |
| OS1 = | the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination, as applicable. | |
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Any adjustment made under this Section 4.04(a) shall become effective immediately after the Open of Business on the Ex-Dividend Date for such dividend or distribution, or immediately after the Open of Business on the effective date for such share split or share combination, as applicable. If any dividend or distribution of the type described in this Section 4.04(a) is declared but not so paid or made, or any share split or combination of the type described in this Section 4.04(a) is announced but the outstanding shares of Common Stock are not so split or combined, as applicable, the Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution, or not to split or combine the outstanding shares of Common Stock, as applicable, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared or such share split or combination had not been announced.
(b) If the Company issues to all or substantially all holders of the Common Stock any rights, options or warrants (other than pursuant to a stockholders rights plan) entitling them, for a period of not more than 60 calendar days after the date of such issuance, to subscribe for or purchase shares of the Common Stock, at a price per share less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, the Conversion Rate will be increased based on the following formula:
| CR1 = | CR0 x | OS0 + X | ||||
| OS0 + Y |
| CR0 = | the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such issuance; | |
| CR1 = | the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date; | |
| OS0 = | the number of shares of Common Stock outstanding immediately prior to the Open of Business on such Ex-Dividend Date; | |
| X= | the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and | |
| Y= | the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants divided by the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants. | |
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Any increase made under this Section 4.04(b) will be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the Open of Business on the Ex-Dividend Date for such issuance. To the extent that such rights, options or warrants are not exercised prior to their expiration or shares of Common Stock are not delivered upon the expiration of such rights, options or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights, options or warrants are not so issued, or if such rights, options or warrants are not exercised prior to their expiration, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such issuance had not occurred.
For purposes of this Section 4.04(b) and Section 4.01(b)(iii)(x) hereof, in determining whether any rights, options or warrants entitle the holders of the Common Stock to subscribe for or purchase shares of the Common Stock at a price per share less than such average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, and in determining the aggregate offering price of such shares of the Common Stock, there shall be taken into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise thereof, the value of such consideration, if other than cash, to be determined by the Company in good faith and in a commercially reasonable manner.
(c) If the Company distributes shares of its Capital Stock, evidences of its indebtedness, other assets or property of the Company or rights, options or warrants to acquire its Capital Stock or other securities, to all or substantially all holders of the Common Stock, excluding:
(i) dividends or distributions, rights options or warrants described in Section 4.04(a) hereof or Section 4.04(b) hereof;
(ii) dividends or distributions paid exclusively in cash as to which the provisions set forth in Section 4.04(d) below shall apply;
(iii) except as otherwise described below, rights issued pursuant to a stockholder rights plan of the Company;
(iv) Spin-Offs as to which the provisions set forth below in this Section 4.04(c) shall apply; and
(v) dividends or distributions of Reference Property upon conversion of, or exchange for, Common Stock pursuant to any Share Exchange Event (as defined below under Section 4.07);
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(any of such shares of Capital Stock, evidences of indebtedness, other assets or property or rights, options or warrants to acquire Capital Stock or other securities of the Company, the “Distributed Property”), then the Conversion Rate shall be increased based on the following formula:
| CR1 = | CR0 x | SP0 | ||||
| SP0 - FMV |
| where, | ||
| CR0 = | the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such distribution; | |
| CR1 = | the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date; | |
| SP0 = | the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and | |
| FMV = | the fair market value (as determined by the Company in good faith and in a commercially reasonable manner) of Distributed Property with respect to each outstanding share of the Common Stock as of the Open of Business on the Ex-Dividend Date for such distribution. | |
If “FMV” (as defined above) is equal to or greater than the “SP0” (as defined above), in lieu of the foregoing increase, each Holder of Notes shall receive, in respect of each $1,000 principal amount of Notes it holds, at the same time and upon the same terms as holders of the Common Stock, the amount and kind of Distributed Property that such Holder would have received as if such Holder owned a number of shares of Common Stock equal to the Conversion Rate in effect immediately prior to the record date for the distribution.
Any increase made pursuant to the formula above will become effective immediately after the Open of Business on the Ex-Dividend Date for such distribution. If such distribution (including a Spin-Off) is not so paid or made, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.
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With respect to an adjustment pursuant to this Section 4.04(c) where there has been a payment of a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to any Subsidiaries of the Company or business units of the Company, and such Capital Stock or similar equity interest is listed or quoted (or will be listed or quoted upon the consummation of the distribution) on a U.S. national securities exchange (a “Spin-Off”), the Conversion Rate will be increased based on the following formula:
| CR1 = | CR0 x | FMV0 + MP0 | ||||
| MP0 |
| where, | ||
| CR0 = | the Conversion Rate in effect immediately prior to the end of the Valuation Period; | |
| CR1 = | the Conversion Rate in effect immediately after the end of the Valuation Period; | |
| FMV0 = | the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock (determined by reference to the definitions of “Last Reported Sale Price,” “Trading Day” and “Market Disruption Event” as if references therein to the Common Stock were to such Capital Stock or similar equity interest) over the first ten consecutive Trading Day period after, and including, the Ex-Dividend Date of the Spin-Off (the “Valuation Period”); provided that if there is no Last Reported Sale Price of the Capital Stock or similar equity interest distributed to holders of the Common Stock on such Ex-Dividend Date, the “Valuation Period” shall be the first ten consecutive Trading Day period after, and including, the first date such Last Reported Sale Price is available; and | |
| MP0 = | the average of the Last Reported Sale Prices of Common Stock over the Valuation Period. | |
The increase to the Conversion Rate under the preceding paragraph will occur at the Close of Business on the last Trading Day of the Valuation Period; provided that (x) in respect of any conversion of Notes for which Physical Settlement is applicable, if the relevant Conversion Date occurs during the Valuation Period, the reference to “ten” in the preceding paragraph shall be deemed replaced with such lesser number of Trading Days as have elapsed between the Ex-Dividend Date for such Spin-Off and such Conversion Date in determining the Conversion Rate and (y) in respect of any conversion of Notes for which Cash Settlement or Combination Settlement is applicable, for any VWAP Trading Day that falls within the relevant Observation Period for such conversion and within the Valuation Period, the reference to “ten” in the preceding paragraph shall be deemed replaced with such lesser number of Trading Days as have elapsed between the Ex-Dividend Date for such Spin-Off and such VWAP Trading Day in determining the Conversion Rate as of such VWAP Trading Day. In addition, if the Ex-Dividend date for such Spin-Off is after the tenth Trading Day immediately preceding, and including, the end of any Observation Period in respect of a conversion of Notes, references to “ten” or “tenth” in the preceding paragraph and this paragraph shall be deemed to be replaced, solely in respect of that conversion, with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date for such Spin-Off to, and including, the last VWAP Trading Day of such Observation Period. If the distribution constituting the Spin-Off is not so paid or made, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such distribution had not been declared.
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For purposes of the second adjustment formula set forth in this Section 4.04(c), (i) the Last Reported Sale Price of any Capital Stock or similar equity interest shall be calculated in a manner analogous to that used to calculate the Last Reported Sale Price of the Common Stock in the definition of “Last Reported Sale Price” set forth in Section 1.01 hereof, (ii) whether a day is a Trading Day (and whether a day is a Scheduled Trading Day and whether a Market Disruption Event has occurred) for such Capital Stock or similar equity interest shall be determined in a manner analogous to that used to determine whether a day is a Trading Day (or whether a day is a Scheduled Trading Day and whether a Market Disruption Event has occurred) for the Common Stock, and (iii) whether a day is a Trading Day to be included in a Valuation Period will be determined based on whether a day is a Trading Day for both the Common Stock and such Capital Stock or similar equity interest.
(d) If any cash dividend or distribution is made to all holders of the Common Stock, excluding any consideration payable in connection with a Tender Offer or exchange offer made by the Company or any of its Subsidiaries, the Conversion Rate shall be adjusted based on the following formula:
| CR1 = | CR0 x | SP0 | ||||
| SP0 - C |
| where, | ||
| CR0 = | the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such dividend or distribution; | |
| CR1 = | the Conversion Rate in effect immediately after the Open of Business on the Ex-Dividend Date for such dividend or distribution; | |
| SP0 = | the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and | |
| C= | the amount in cash per share of Common Stock that the Company distributes to holders of the Common Stock. | |
Any increases made under this Section 4.04(d) shall become effective immediately after the Open of Business on the Ex-Dividend Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Rate shall be decreased, effective as of the date the Company’s Board of Directors determines not to make or pay such dividend or distribution, to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each Holder shall receive, for each $1,000 principal amount of Notes
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it holds, at the same time and upon the same terms as holders of shares of the Common Stock, the amount of cash that such Holder would have received if such Holder had owned a number of shares of Common Stock equal to the Conversion Rate in effect immediately prior to the record date for such cash dividend or distribution.
(e) If the Company or any of its Subsidiaries make a payment in respect of a tender offer or exchange offer for the Common Stock (other than Odd Lot Tender Offers), to the extent that the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the Last Reported Sale Price of the Common Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Offer Expiration Date”), the Conversion Rate shall be increased based on the following formula:
| CR1 = | CR0 x | AC + (SP1 x OS1) | ||||
| OS0 x SP1 |
| where, | ||
| CR0 = | the Conversion Rate in effect immediately prior to the Close of Business on the Offer Expiration Date; | |
| CR1 = | the Conversion Rate in effect immediately after the Close of Business on the Offer Expiration Date; | |
| AC = | the aggregate value of all cash and any other consideration (as determined by the Company in good faith and in a commercially reasonable manner) paid or payable for shares of Common Stock purchased in such tender or exchange offer; | |
| OS0 = | the number of shares of Common Stock outstanding immediately prior to the expiration time of the tender or exchange offer on the Offer Expiration Date (prior to giving effect to the purchase of all shares accepted for purchase or exchange in such tender or exchange offer); | |
| OS1 = | the number of shares of Common Stock outstanding immediately after the expiration time of the tender or exchange offer on the Offer Expiration Date (after giving effect to the purchase of all shares accepted for purchase or exchange in such tender or exchange offer); and | |
| SP1 = | the Last Reported Sale Price of the Common Stock on the Trading Day next succeeding the Offer Expiration Date. | |
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(f) Special Settlement Provisions.
In addition, notwithstanding anything to the contrary herein, if a Conversion Rate adjustment for any event becomes effective on any Ex-Dividend Date as described in Sections 4.04(a) through (e) hereof, and a Holder that has converted its Notes with a Conversion Date occurring on or after such Ex-Dividend Date and on or prior to the related record date would be treated as the record holder of shares of Common Stock as of the related Conversion Date as described under Section 4.02 hereof based on an adjusted Conversion Rate for such Ex-Dividend Date, then, notwithstanding the foregoing Conversion Rate adjustment provisions, the Conversion Rate adjustment relating to such Ex-Dividend Date will not be made for such converting Holder. Instead, such Holder shall be treated as if such Holder were the registered owner of the shares of Common Stock on an unadjusted basis and participated in the related dividend, distribution or other event giving rise to such adjustment.
In addition, notwithstanding anything to the contrary herein, if, in the case of any conversion of a Note to which Combination Settlement applies, on any VWAP Trading Day during the Observation Period corresponding to the Conversion Date for such Note, shares of Common Stock are deliverable as part of the Daily Settlement Amount for such VWAP Trading Day, and
(i) the record date for any issuance, dividend or distribution, the effective date for any share split or combination or the Offer Expiration Date for any tender or exchange offer by the Company or its Subsidiaries that, in each case, would require an adjustment to the Conversion Rate pursuant to any of Section 4.04(a) through (e) occurs prior to the Company’s delivery of such shares of Common Stock to the converting Holder;
(ii) the applicable Conversion Rate for such VWAP Trading Day will not reflect such adjustment; and
(iii) the shares of Common Stock that the Company shall deliver to the converting Holder with respect to such VWAP Trading Day are not entitled to participate in the relevant event (because such shares were not held by such Holder on the related record date, effective date, Offer Expiration Date or otherwise),
then the Company will (i) in the case of any such issuance, dividend or distribution, deliver to the Holder of such Note, on the date on which such issuance, dividend or distribution is paid or made, the consideration that a Holder of a number of shares equal to the number of shares included in the Daily Settlement Amount for such VWAP Trading Day would be entitled to receive in respect of such issuance, dividend or distribution or (ii) in the case of any such share split or combination, tender offer or exchange offer, adjust the number of shares that the Company delivers to such Holder as part of the Daily Settlement Amount for such VWAP Trading Day in a manner that appropriately (as determined by the Company in consultation with a nationally recognized independent investment banking firm, which may be one of the Initial Purchasers, retained for this purpose) reflects the relevant transaction or event.
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(g) Poison Pill. If a Holder converts a Note, to the extent that the Company has a rights plan in effect at such time, if Physical Settlement applies to such Note, on the Conversion Date applicable to such Note, and if Combination Settlement applies to such Note on any VWAP Trading Day in the Observation Period applicable to such Note, the Holder converting such Note will receive, in addition to any shares of Common Stock otherwise received in connection with such conversion on such Conversion Date or such VWAP Trading Day, as the case may be, the rights under the rights plan, unless prior to such Conversion Date or such VWAP Trading Day, as the case may be, the rights have separated from the Common Stock, in which case, and only in such case, the Conversion Rate will be adjusted at the time of separation as if the Company distributed to all holders of the Common Stock, Distributed Property as described in Section 4.04(c) hereof, subject to readjustment in the event of the expiration, termination or redemption of such rights.
(h) Deferral of Adjustments. No adjustment to the Conversion Rate will be required unless the adjustment would require an increase or decrease of at least 1% of the Conversion Rate and such adjustment would otherwise have been made prior to the Effective Date of any Share Exchange event in respect of which the Common Stock is replaced by Reference Property consisting solely of cash; provided, however, that if an adjustment is not made because the adjustment does not change the Conversion Rate by at least 1%, then such adjustment will be carried forward, except that all such adjustments must be given effect immediately upon the earliest to occur of the following: (i) when all such deferred adjustments would result in an aggregate change of at least 1% to the Conversion Rate, (ii) in the case of any Note to which Physical Settlement applies prior to the Close of Business on the Conversion Date, (iii) in the case of the replacement of the Common Stock by Reference Property consisting solely of cash, on the Effective Date of the Share Exchange Event relating to such replacement, (iv) in the case of any Note to which Cash Settlement or Combination Settlement applies (other than as described in the immediately preceding clause (iii)), prior to the Open of Business on the first VWAP Trading Day of the applicable Observation Period and each subsequent VWAP Trading Day of the Observation Period; (v) prior to the Close of Business on any other date on which the Conversion Rate is referred to for purpose of determining the consideration deliverable upon settlement of a Note; (vi) on the Effective Date of any Fundamental Change or Make-Whole Fundamental Change; (vii) the Redemption Date; and (vii) September 15, 2029. In addition, the Company shall not account for such deferrals when determining whether any of the conditions to conversion have been satisfied or what number of shares of Common Stock a Holder would have held on a given day had it converted its Notes.
(i) Limitation on Adjustments. Except as stated in this Section 4.04, the Company will not adjust the Conversion Rate for the issuance of shares of Common Stock or any securities convertible into or exchangeable for shares of Common Stock or the right to purchase shares of Common Stock or such convertible or exchangeable securities. If, however, the application of the formulas in Sections 4.04(a) through (e) hereof would result in a decrease in the Conversion Rate, then, except to the extent of any readjustment to the Conversion Rate, no adjustment to the Conversion Rate will be made (other than as a result of a reverse share split or share combination).
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(j) For purposes of this Section 4.04, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company so long as the Company does not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company, but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.
(k) Except as provided for in this Section 4.04 and in Section 4.06 below, the Conversion Rate will not be required to be adjusted for any transaction or event. Without limiting the foregoing, the Conversion Rate will not be required to be adjusted:
(i) except as described in this Section 4.04, upon the issuance of Common Stock for cash at a price below the Conversion Price or otherwise;
(ii) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in the Common Stock under any plan;
(iii) upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of its subsidiaries;
(iv) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in the preceding subclause (iii) and outstanding as of the date of the initial issuance of the Notes;
(v) upon the repurchase of any shares of Common Stock pursuant to an open-market share repurchase program or other buy-back transaction (including, without limitation, through any structured or derivative transaction such as accelerated share repurchase derivative or similar forward derivative) that is not a tender offer or exchange offer of the nature described under Subsection 4.04(e) above;
(vi) as a result of a Tender Offer solely to holders of fewer than 100 shares of Common Stock (an “Odd Lot Tender Offer”);
(vii) for a third-party Tender Offer by any party other than a Tender Offer by one or more of the Company’s Subsidiaries as described in Subsection 4.04(e) above;
(viii) solely for a change in the par value of the Common Stock; or
(ix) for accrued and unpaid Interest, if any.
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Section 4.05 Discretionary and Voluntary Adjustments.
(a) Discretionary Adjustments. Whenever any provision of this Indenture requires the Company to calculate the Trading Prices, the Last Reported Sale Prices, the Daily VWAPs, the Daily Conversion Values or the Daily Settlement Amounts or any function thereof over a span of multiple days, Trading Days or VWAP Trading Days (including during an Observation Period), the Company will make appropriate adjustments to each such calculation to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the effective date, Ex-Dividend Date or Offer Expiration Date of the event occurs, at any time during the period when such Trading Price, Last Reported Sale Price, Daily VWAP, Daily Conversion Value or Daily Settlement Amount or function thereof is to be calculated. For the avoidance of doubt, the adjustments made pursuant to this paragraph will be made without duplication of any adjustment made pursuant to the provisions set forth under Section 4.04.
(b) Voluntary Adjustments. To the extent permitted by applicable law and applicable requirements of The Nasdaq Global Select Market, the Company is permitted (but not required) to increase the Conversion Rate of the Notes (i) by any amount for a period of at least 20 Business Days if the Board of Directors determines that such increase would be in the Company’s best interest or (ii) to avoid or diminish income tax to holders of Common Stock or rights to purchase shares of Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event.
Section 4.06 Adjustment to Conversion Rate Upon Conversion in Connection with a Make-Whole Fundamental Change or Notice of Optional Redemption.
(a) Increase in the Conversion Rate. If (i) the Effective Date of a Make-Whole Fundamental Change occurs prior to the Maturity Date or (ii) the Company issues a Redemption Notice and, in each case, a Holder elects to convert its Notes in connection with such Make-Whole Fundamental Change or Redemption Notice, as applicable, then the Company shall, to the extent provided herein, increase the Conversion Rate for the Notes so surrendered for conversion by a number of additional shares of Common Stock (the “Additional Shares”), as described in this Section 4.06. A conversion of Notes shall be deemed for these purposes to be “in connection with” (x) a Make-Whole Fundamental Change if the relevant Conversion Notice is received by the Conversion Agent during the period from, and including, the Effective Date of the Make-Whole Fundamental Change up to, and including, the Close of Business on the Business Day immediately prior to the related Fundamental Change Repurchase Date or, if such Make-Whole Fundamental Change is not also a Fundamental Change, the 35th Business Day immediately following the Effective Date for such Make-Whole Fundamental Change (such period, the “Make-Whole Fundamental Change Period”) or (y) a Redemption Notice if the applicable Conversion Date occurs during the period from, and including, the date of the Redemption Notice until the Close of Business on the second Business Day immediately preceding the related Redemption Date and, in the case of any partial redemption, such Notes have been called for Optional Redemption (or deemed to be called pursuant to Section 11.07). Notwithstanding anything to the contrary in this Section 4.06(a), if the Conversion Date for the conversion of a Note occurs “in connection with” both a Make-Whole Fundamental Change and a Redemption Notice, then, solely for purposes of such conversion, (x) such Conversion Date will be deemed to occur solely “in connection with” the earlier of the Effective Date of such Make-Whole Fundamental Change and the date of such Redemption Notice; and (y) such later date will be deemed not to have occurred.
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(b) Cash Mergers. Upon surrender of Notes for conversion in connection with a Make-Whole Fundamental Change or Redemption Notice, the Company will, at its option, satisfy its conversion obligation by Physical Settlement, Cash Settlement or Combination Settlement, based on the Conversion Rate as increased to reflect the Additional Shares pursuant to the table attached as Schedule A hereto, as described in Section 4.03. However, if the if the consideration paid to holders of the Common Stock in any Make-Whole Fundamental Change described in clause (2) of the definition of “Fundamental Change” is comprised entirely of cash, then, for any conversion of Notes following the Effective Date of such Make-Whole Fundamental Change, the payment and delivery obligations upon the conversion of each $1,000 principal amount of Notes shall be calculated based solely on the Stock Price (determined in the manner described in Section 4.06(c)) for such Make-Whole Fundamental Change and shall be deemed to be an amount of cash per $1,000 principal amount of converted Notes equal to the applicable Conversion Rate (including any adjustment as described in this Section 4.06) multiplied by such Stock Price. In such event, the Company’s conversion obligation will be determined and paid to Holders in cash on the second Business Day following the applicable Conversion Date. Otherwise, the Company will settle any conversion of the Notes following the Effective Date for a Make-Whole Fundamental Change in accordance with Section 4.03 hereof (but subject to Section 4.04 hereof).
(c) Determining the Number of Additional Shares. The number of Additional Shares, if any, by which the Conversion Rate will be increased for a Holder that converts its Notes in connection with a Make-Whole Fundamental Change or Redemption Notice, as applicable, shall be determined by reference to the table attached as Schedule A hereto, based on the Effective Date of the Make-Whole Fundamental Change or the date of the Redemption Notice, as applicable, and the price paid (or deemed to be paid) per share of the Common Stock in the Make-Whole Fundamental Change or with respect to the Redemption Notice, as the case may be (the “Stock Price”). If the holders of the Common Stock receive only cash in a Make-Whole Fundamental Change described in clause (2) of the definition of “Fundamental Change,” the Stock Price shall be the cash amount paid per share of Common Stock. Otherwise, the Stock Price shall be the average of the Last Reported Sale Prices of the Common Stock over the five consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Effective Date of the Make-Whole Fundamental Change or the date of the Redemption Notice, as applicable. For the avoidance of doubt, if the Company elects to redeem less than all of the Outstanding Notes, then Holders of the Notes not called for redemption will not be entitled to an increased Conversion Rate for such Notes as described in this Section 4.06 on account of such redemption, except to the limited extent described in Section 11.07.
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(d) Interpolation and Limits. The exact Stock Price and Effective Date may not be set forth in the table in Schedule A in which case:
(i) If the Stock Price is between two Stock Prices in the table or the Effective Date is between two effective dates in the table, the number of Additional Shares by which the Conversion Rate will be increased shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Prices and the earlier and later effective dates, as applicable, based on a 365 year.
(ii) If the Stock Price is greater than $600.00 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table in Schedule A hereof), no Additional Shares will be added to the Conversion Rate.
(iii) If the Stock Price is less than $53.49 per share (subject to adjustments in the same manner as the Stock Prices set forth in the column headings of the table in Schedule A hereof), no Additional Shares will be added to the Conversion Rate.
Notwithstanding the foregoing, in no event will the Conversion Rate be increased on account of a Make-Whole Fundamental Change or a Redemption Notice to exceed 18.6950 shares of Common Stock per $1,000 principal amount of Notes, subject to adjustments in the same manner as the Conversion Rate is required to be adjusted as set forth in Section 4.04 hereof.
(iv) The Stock Prices set forth in the column headings of the table in Schedule A hereto shall be adjusted as of any date on which the Conversion Rate of the Notes is otherwise required to be adjusted. The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to such adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of Additional Shares set forth in such table shall be adjusted in the same manner and at the same time as the Conversion Rate is required to be adjusted as set forth in Section 4.04.
(e) Notices. The Company shall notify in writing the Holders, the Trustee and the Conversion Agent (if other than the Trustee) of the Effective Date of any Make-Whole Fundamental Change in accordance Section 4.01(b)(iv) (or, if such Effective Date is on or after September 15, 2029, no later than such actual Effective Date) or in accordance with Article 11, as applicable.
Section 4.07 Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale.
(a) Share Exchange Events. In the case of:
(i) any recapitalization, reclassification or change of Common Stock (other than a change to par value or from par value to no par value or other than changes resulting from a subdivision or combination);
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(ii) any consolidation, merger, combination or similar transaction involving the Company;
(iii) any sale, lease or other transfer to a third party of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole; or
(iv) any statutory share exchange,
in each case, as a result of which the Common Stock would be converted into, or exchanged for, or represent solely the right to receive, stock, other securities or other property or assets (including cash or any combination thereof) (any such event, a “Share Exchange Event” and any such stock, other securities or other property or assets, “Reference Property,” and the amount of Reference Property that a holder of one share of Common Stock immediately prior to such Share Exchange Event would have been entitled to receive upon the occurrence of such Share Exchange Event, a “Reference Property Unit”), then the Company or the successor or purchasing company, as the case may be, shall execute with the Trustee a supplemental indenture providing that, at and after the effective time of such Share Exchange Event, the consideration due upon conversion of any Notes, and the conditions to any such conversion, will be determined in the same manner as if each reference to any number of shares of Common Stock in this Article 4 were instead a reference to the same number of Reference Property Units.
If a Share Exchange Event causes the Common Stock to be converted into, or exchanged for, or represent solely the right to receive, more than a single type of consideration (determined based in part upon any form of stockholder election), then (i) the Reference Property shall be deemed to be the weighted average of the types and amounts of consideration actually received by holders of Common Stock), and (ii) the Reference Property Unit for purposes of the immediately preceding paragraph shall refer to the consideration referred to in clause (i) attributable to one share of Common Stock. The Company shall notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) of such weighted average as soon as practicable after such determination is made. Notwithstanding anything to the contrary herein, if the Reference Property Unit consists entirely of cash, then the Company will be deemed to elect Cash Settlement in respect of all conversions whose Conversion Date occurs after the effective date of the Share Exchange Event described above, and the Company will pay the cash due upon such conversions no later than the second Business Day after the Conversion Date. For these purposes, the Daily VWAP or Last Reported Sale Price of any Reference Property Unit or portion thereof that does not consist of a class of securities will be the fair value of such Reference Property unit or portion thereof, as applicable, determined in good faith by the Company (or, in the case of cash denominated in U.S. dollars, the face amount thereof).
Such supplemental indenture described in the second immediately preceding paragraph shall provide, to the extent the Reference Property is comprised, in whole or in part, of Common Equity, for anti-dilution and other adjustments that are as nearly equivalent as possible to the adjustments provided for in this Article 4. If the Reference
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Property in respect of any Share Exchange Event includes shares of stock, securities or other property or assets of a Person other than the Company or, in the case of a transaction described in Article 9, the Successor Company, then such supplemental indenture shall also be executed by such other Person and shall contain such additional provisions to protect the interests of the Holders of Notes, including the right of Holders to require the Company to repurchase their Notes upon a Fundamental Change pursuant to Article 3, as the Company shall reasonably consider necessary by reason of the foregoing.
(b) If the Company executes a supplemental indenture pursuant to this Section 4.07, as promptly as practicable, the Company shall file with the Trustee an Officer’s Certificate briefly describing such Share Exchange Event, the composition of a Reference Property Unit for such Share Exchange Event, any adjustment to be made with respect thereto and that all conditions precedent to such Share Exchange Event under this Indenture have been complied with. Any failure to deliver such Officer’s Certificate shall not affect the legality or validity of such supplemental indenture. The Company shall also issue a press release containing such information or shall make such information available on its website.
(c) The Company shall not become a party to any Share Exchange Event unless its terms are consistent with this Section 4.07. None of the foregoing provisions shall affect the right of a Holder of Notes to convert its Notes as set forth in Section 4.01 and Section 4.02 prior to the effective date of such Share Exchange Event.
(d) The provisions of this Section 4.07 shall apply successively to successive Share Exchange Events.
Section 4.08 Certain Covenants.
(a) Reservation of Shares. To the extent necessary to satisfy its obligations under this Indenture, prior to issuing any shares of Common Stock, the Company will reserve out of its authorized but unissued shares of Common Stock a sufficient number of shares of Common Stock to permit the conversion of the Notes, assuming Physical Settlement applies to all Notes.
(b) Certain other Covenants. The Company covenants that all shares of Common Stock issued upon conversion of Notes shall be issued in book-entry format if and to the extent that the Common Stock is eligible to trade in book-entry format through the facilities of the DTC, shall be newly issued shares or treasury shares, shall be duly authorized, validly issued, fully paid and non-assessable and shall be free from preemptive rights and free from any tax, lien or charge (other than those created by the Holder or due to a change in registered owner). The Company shall list or cause to have quoted any shares of Common Stock to be issued upon conversion of Notes on the Nasdaq Global Select Market to the extent that the Common Stock is then listed or quoted on the Nasdaq Global Select Market (or, if the Common Stock is not then listed on The Nasdaq Global Select Market, the Company shall use its commercially reasonable efforts to list or cause to have quoted any shares of Common Stock to be issued upon conversion of Notes on each national securities exchange or over-the-counter or other domestic market (each, an “Exchange”) on which the Common Stock is then listed or quoted), in each case if permitted and required by the rules of the Nasdaq Global Select Market or such Exchange.
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Section 4.09 Responsibility of Trustee. The Trustee and any Conversion Agent shall not at any time be under any duty or responsibility to any Holder of Notes to determine or calculate the Conversion Rate, to determine whether any facts exist which may require any adjustment of the Conversion Rate, or to confirm the accuracy of any such adjustment when made or the appropriateness of the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock or of any other securities or property that may at any time be issued or delivered upon the conversion of any Notes; and the Trustee and the Conversion Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Notes for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article 4. The rights, privileges, protections, immunities and benefits given to the Trustee, including without limitation its right to be compensated, reimbursed and indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, including its capacity as Conversion Agent and as Bid Solicitation Agent (if applicable).
Section 4.10 Notice of Adjustment to the Trustee. Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly (i) file with the Trustee and any Conversion Agent (if other than the Trustee) an Officer’s Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment; provided that unless and until a Responsible Officer of the Trustee shall have received such Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume that the last Conversion Rate of which it has knowledge is still in effect and (ii) deliver written notice to the Holders, at his or her last address appearing on the Register provided for in Section 2.06 of this Indenture, stating that such adjustment has become effective and the Conversion Rate or conversion privilege as adjusted. Failure to deliver such notice shall not affect the legality, effectiveness or validity of any such adjustment and shall not be an Event of Default under this Indenture.
Section 4.11 Notice to Holders.
(a) Notice to Holders Prior to Certain Actions. The Company shall deliver written notices of the events specified below at the times specified below and containing the information specified below unless, in each case (i) pursuant to this Indenture, the Company is already required to deliver notice of such event containing at least the information specified below at an earlier time or (ii) the Company, at the time it is required to deliver a notice, does not have knowledge of all of the information required to be included in such notice, in which case, the Company shall (A) deliver notice at such time containing only the information that it has knowledge of at such time (if it has
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knowledge of any such information at such time), and (B) promptly upon obtaining knowledge of any such information not already included in a notice delivered by the Company, deliver notice to each Holder containing such information. In each case, the failure by the Company to give such notice, or any defect therein, shall not affect the legality or validity of such event.
(i) Issuances, Distributions, and Dividends and Distributions. If the Company (A) announces any issuance of any rights, options or warrants that would require an adjustment in the Conversion Rate pursuant to Section 4.04(b) hereof; (B) authorizes any distribution that would require an adjustment in the Conversion Rate pursuant to Section 4.04(c) hereof (including any separation of rights from the Common Stock described in Section 4.04(g) hereof); or (C) announces any dividend or distribution that would require an adjustment in the Conversion Rate pursuant to Section 4.04(d) hereof, then the Company shall deliver to the Holders, as promptly as practicable after the holders of the Common Stock are notified of such event, notice describing such issuance, dividend or distribution, as the case may be, and stating the expected Ex-Dividend Date and record date for such issuance, dividend or distribution, as the case may be.
(ii) Tender and Exchange Offers. If the Company announces any tender or exchange offer that could require an adjustment in the Conversion Rate pursuant to Section 4.04(e) hereof, the Company shall deliver to the Holders within three Business Days following the day it announces such tender or exchange offer, and, if the Company is required to file with the Commission a Schedule TO in connection with such tender or exchange offer, an additional written notice (i) when the Company first files such Schedule TO, which notice shall include the address at which such Schedule TO is available on the Commission’s EDGAR system (or any successor thereto), and (ii) whenever the Company files an amendment to such Schedule TO, which notice shall include the address at which such amendment is available on the Commission’s EDGAR system (or any successor thereto).
(iii) Voluntary Increases. If the Company increases the Conversion Rate pursuant to Section 4.05(b), the Company shall deliver notice to the Holders prior to the date on which such increase will become effective, which notice shall state the date on which such increase will become effective and the amount by which the Conversion Rate will be increased.
(iv) Dissolutions, Liquidations and Winding-Ups. If there is a voluntary or involuntary dissolution, liquidation or winding-up of the Company, the Company shall deliver notice to the Holders at promptly as possible, but in any event prior to the earlier of (i) the date on which such dissolution, liquidation or winding-up, as the case may be, is expected to become effective or occur, and (ii) the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such dissolution, liquidation or winding-up, as the case may be, which notice shall state the expected effective date and record date for such event,
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as applicable, and the amount and kind of property that a holder of one share of the Common Stock is expected to be entitled, or may elect, to receive in such event. The Company shall deliver an additional written notice to Holders, as promptly as practicable, whenever the expected effective date or record date, as applicable, or the amount and kind of property that a holder of one share of the Common Stock is expect to be entitled to receive in such event, changes.
For the avoidance of doubt, no failure to comply with this Section 4.11 shall be an Event of Default unless the 60-day period provided for in Section 6.01(f) has run and such Event of Default shall not have been cured prior to the expiration of such 60-day period.
Section 4.12 Exchange in Lieu of Conversion.
(a) Notwithstanding any other provision of this Article 4, when a Holder surrenders a Note for conversion, and the Conversion Date for such Note occurs prior to September 15, 2029, the Company may, at its election, direct the Conversion Agent in writing to surrender, on or prior to the Scheduled Trading Day immediately preceding the first VWAP Trading Day of the applicable Observation Period (or if the Company has elected Physical Settlement, on or prior to the second Business Day immediately following the relevant Conversion Date), such Notes to a financial institution designated by the Company for exchange in lieu of conversion. In order to accept any Notes surrendered for conversion, the designated financial institution must agree to timely pay and/or deliver, as the case may be, in exchange for such Notes, all of the cash, shares of Common Stock or a combination thereof due upon conversion, all in accordance with Section 4.02. By the Close of Business on the Scheduled Trading Day immediately preceding the first VWAP Trading Day of the applicable Observation Period (or, if the Company has elected Physical Settlement, by the Close of Business on the second Business Day immediately following the relevant Conversion Date), the Company shall notify in writing the Trustee, the Conversion Agent (if other than the Trustee) and the Holder surrendering Notes for conversion that the Company has directed the designated financial institution to make an exchange in lieu of conversion.
(b) If the designated financial institution accepts any such Notes, it will pay and/or deliver, as the case may be, the cash, shares of Common Stock or a combination thereof due upon conversion to the Conversion Agent, and the Conversion Agent shall pay and/or deliver such cash, shares of Common Stock (and cash in lieu of fractional shares) or combination thereof to such Holder on the second Business Day immediately following the last VWAP Trading Day of the applicable Observation Period (or, if the Company has elected Physical Settlement, on the second Business Day immediately following the relevant Conversion Date). Any Notes exchanged by the designated financial institution will remain Outstanding subject to the Applicable Procedures. If the designated financial institution agrees to accept any Notes for exchange but does not timely pay and/or deliver the related cash, shares of Common Stock or a combination thereof, as the case may be, or if such designated financial institution does not accept the Notes for exchange, the Company shall convert the Notes and pay and/or deliver, as the case may be, the cash, shares or Common Stock or a combination thereof due upon conversion on the second Business Day immediately following the last VWAP Trading
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Day of the applicable Observation Period (or, if the Company has elected Physical Settlement, on the second Business Day immediately following the relevant Conversion Date) as set forth in Section 4.02. The Company’s designation of a financial institution to which the Notes may be submitted for exchange does not require the financial institution to accept any Notes (unless the financial institution has separately made an agreement with the Company to do so). The Company may, but will not be obligated to, enter into a separate agreement with any designated financial institution that would compensate it for any such transaction.
ARTICLE 5.
COVENANTS
Section 5.01 Payment of Principal, Interest, Redemption Price and Fundamental Change Repurchase Price .
The Company covenants and agrees that it will cause to be paid the principal of (including the Fundamental Change Repurchase Price and Redemption Price, as applicable) and accrued and unpaid interest, if any, on each of the Notes at the places, at the respective times and in the manner provided herein and in the Notes.
Section 5.02 Maintenance of Office or Agency.
The Company will maintain in the continental United States an office of the Paying Agent, an office of the Registrar and an office or agency where Notes may be surrendered for conversion (“Conversion Agent”) and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be made. 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; provided that, the Corporate Trust Office shall not be an office or agency of the Company for purposes of legal process against the Company.
The Company may also from time to time designate as co-Registrars one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the continental United States for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The terms “Paying Agent” and “Conversion Agent” include any such additional or other offices or agencies, as applicable.
The Company hereby initially designates the Trustee as the Paying Agent, Registrar, Custodian and Conversion Agent, and its Corporate Trust Office, which shall be in the continental United States, shall be considered as one such office or agency of the Company for each of the aforesaid purposes. The Company may, however, change the Paying Agent or Registrar without notice to the Holders. The Company or its Affiliates may act as Paying Agent or Registrar.
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With respect to any Global Note, the Corporate Trust Office of the Trustee or any Paying Agent shall be the place of payment where such Global Note may be presented or surrendered for payment or conversion or for registration of transfer or exchange, or where successor Notes may be delivered in exchange therefor; provided, however, that any such payment, conversion, presentation, surrender or delivery effected pursuant to the Applicable Procedures for such Global Note shall be deemed to have been effected at the place of payment for such Global Note in accordance with the provisions of this Indenture.
Section 5.03 Provisions as to Paying Agent.
(a) If the Company shall appoint a Paying Agent other than the Trustee, the Company will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 5.03:
(i) that it will hold all sums held by it as such agent for the payment of the principal of, accrued and unpaid interest, if any, on, or any Fundamental Change Repurchase Price or Redemption Price for, the Notes held in trust for the benefit of the Holders of the Notes;
(ii) that it will give the Trustee prompt written notice of any failure by the Company to make any payment of the principal, accrued and unpaid interest, if any, on, or any Fundamental Change Repurchase Price or Redemption Price for, the Notes when the same shall be due and payable; and
(iii) that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of, accrued and unpaid interest, if any, on, or any Fundamental Change Repurchase Price or Redemption Price for, the Notes, deposit with the Paying Agent a sum sufficient to pay such principal, accrued and unpaid interest, or any Fundamental Change Repurchase Price or Redemption Price and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee in writing of any failure to take such action, provided that, if such deposit is made on the due date, such deposit must be received by the Paying Agent by 11:00 a.m., New York City time, on such date.
(b) If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal of, accrued and unpaid interest, if any, on, or any Fundamental Change Repurchase Price or Redemption Price for, the Notes, set aside, segregate and hold in trust for the benefit of the Holders of the Notes a sum sufficient to pay such amount so becoming due and will promptly notify the Trustee in writing of any failure to take such action and of any failure by the Company to make any such payment when the same shall become due and payable. Upon any bankruptcy, reorganization or similar proceeding with respect to the Company, the Trustee shall automatically serve as Paying Agent for the Notes.
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(c) Anything in this Section 5.03 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by the Company or any Paying Agent hereunder as required by this Section 5.04, such sums to be held by the Trustee upon the trusts herein contained and upon such payment by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from all further liability with respect to such sums.
(d) Subject to applicable abandoned property laws, 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, accrued and unpaid interest, if any, on, or any Fundamental Change Repurchase Price or Redemption Price for, any Note and remaining unclaimed for two years after such principal, accrued and unpaid interest, or any Fundamental Change Repurchase Price or Redemption Price has become due and payable shall be paid to the Company on request of the Company contained in an Officer’s Certificate, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that before the Trustee or such Paying Agent are required to make any such repayment, the Company shall cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The Borough of Manhattan, The City of New York, New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 calendar days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.
Section 5.04 Reports.
(a) The Company will file with the Trustee and the Holders, within 15 calendar days after it is required to file the same with the Commission (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act or any similar or successor grace period), copies of the quarterly and annual reports and of the information, documents and other reports, if any, that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act. Any such report, information or document that the Company files with the Commission through the EDGAR system (or any successor thereto) will be deemed to be delivered to the Trustee and the Holders for the purposes of this Section 5.04 at the time of such filing through the EDGAR system (or such successor thereto); provided, however, that the Trustee shall have no responsibility to determine whether such filings have been made. Notwithstanding anything to the contrary herein, the Company shall in no event be required to file with, or otherwise provide or disclose to, the Trustee or any Holder any information for which the Company is requesting (assuming such request has not been denied), or has received, confidential treatment from the SEC.
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(b) Delivery of any such reports, information and documents to the Trustee shall be for informational purposes only, and the Trustee’s receipt of such reports, information and documents shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely conclusively on Officer’s Certificates).
(c) At any time the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company will, so long as any of the Notes or the shares of Common Stock delivered upon conversion of the Notes will, at such time, constitute “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide to the Trustee and will, upon written request, provide to any Holder, beneficial owner or prospective purchaser of such Notes or such shares of Common Stock the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such Notes or such shares of Common Stock pursuant to Rule 144A under the Securities Act. The Company will take such further action as any Holder or beneficial owner of such Notes or such shares of Common Stock may reasonably request from time to time to enable such Holder or beneficial owner to sell such Notes or such shares of Common Stock in accordance with Rule 144A under the Securities Act, as such rule may be amended from time to time.
Section 5.05 Statements as to Defaults. The Company is required to deliver to the Trustee, within 120 days after the end of each fiscal year, an Officer’s Certificate, stating whether or not to the knowledge of the signer thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided under this Indenture) and, if the Company is in default, specifying all such Default or Event of Defaults and the nature and the status thereof of which he or she may have knowledge. In addition, the Company shall deliver to the Trustee, as soon as possible, and in any event within 30 calendar days after the Company becomes aware of the occurrence of any Default or Event of Default, an Officer’s Certificate setting forth the details of such Default or Event of Default, its status and the action that the Company proposes to take with respect thereto; provided that no such Officer’s Certificate shall be required to the extent that the event that would constitute a Default or Event of Default has been cured or waived prior to the date on which such Officer’s Certificate is due. Such Officer’s Certificate shall also comply with any additional requirements set forth in Section 5.07 hereof. The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof.
Section 5.06 Additional Interest Notice. If Additional Interest is payable by the Company pursuant to Section 5.08 hereof or Section 6.03 hereof, the Company shall deliver to the Trustee an Officer’s Certificate, prior to the Regular Record Date for each applicable Interest Payment Date, to that effect stating (a) the amount of such Additional Interest that is payable and (b) the date on which such interest is payable. Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Additional Interest is payable. If the Company has paid Additional Interest directly to the Persons entitled to it, the Company shall deliver to the Trustee an Officer’s Certificate setting forth the particulars of such payment. The Company shall also provide to all Holders of the Notes, the Trustee and the Paying Agent (in the case of any Paying Agent other than the Trustee) a written notice stating (a) that Additional Interest is payable, (b) the amount of such Additional Interest that is payable and (c) the date on which such interest is payable.
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Section 5.07 Compliance Certificate and Opinions of Counsel.
(a) Except as otherwise expressly provided in this Indenture, upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.
(b) Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:
(i) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
(ii) 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;
(iii) 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
(iv) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.
(c) All applications, requests, certificates, statements or other instruments given under this Indenture shall be without personal recourse to any individual giving the same and may include an express statement to such effect.
Section 5.08 Additional Interest.
(a) If, at any time during the six-month period beginning on, and including, the date which is six months after the Last Original Issuance Date of any Note, the Company fails to timely file any document or report that the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace periods thereunder and other than current reports on Form 8-K), or such Note is not otherwise Freely Tradable, including pursuant to Rule 144 under the Securities Act, by Holders other than “affiliates” (within the
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meaning of Rule 144) of the Company or Holders that were “affiliates” (within the meaning of Rule 144) of the Company during the three months immediately preceding the date of the proposed transfer (as a result of restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes), then the Company shall pay Additional Interest that will accrue on such Note at the rate of 0.50% per annum of the principal amount of such Note for each day during such period for which the Company’s failure to file has occurred and is continuing or such Note is not otherwise Freely Tradable; provided that such period shall end on the date that is one year from the Last Original Issuance Date.
(b) If, and for so long as, the Restricted Notes Legend has not been removed (or deemed removed) from the Notes, the Notes are not assigned (or deemed assigned) an unrestricted CUSIP number or the Notes are not otherwise Freely Tradable by Holders other than “affiliates” (within the meaning of Rule 144) of the Company or Holders that were “affiliates” (within the meaning of Rule 144) of the Company during the three months immediately preceding the date of the proposed transfer (without restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes) as of the De-Legending Deadline Date for such Notes, the Company will pay Additional Interest on such Notes. Additional Interest will accrue on such Notes at the rate of 0.50% per annum of their principal amount outstanding until such Restricted Notes Legend is removed (or deemed removed), such Notes are assigned (or deemed assigned) an unrestricted CUSIP number and such Notes are Freely Tradable.
(c) Such Additional Interest that is payable shall be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on the Notes and, subject to 5.08(d), will be in addition to any Additional Interest that may accrue as described under Section 6.03.
(d) Notwithstanding anything to the contrary herein, in no event will any Additional Interest that may accrue as a result of the Company’s failure to timely file any document or report that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace periods thereunder and other than current reports on Form 8-K), as described in this Section 5.08, together with any interest that may accrue as described in Section 6.03, accrue at a rate in excess of 0.50% per annum, regardless of the number of events or circumstances giving rise to the requirement to pay such Additional Interest.
Section 5.09 Corporate Existence. Subject to Article 9, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.
Section 5.10 Restriction on Resales. The Company shall not, and shall not permit any of its Subsidiaries to, and shall use its commercially reasonable efforts to prohibit any other Affiliate of the Company from, reselling any of the Notes that have been reacquired by the Company or any of such Subsidiaries or Affiliates.
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Section 5.11 Company to Furnish Trustee Names and Addresses of Holders. The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders. If at any time the Trustee is not the Registrar, the Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than the 5th day after each Regular Record Date, a list, in such form as the Trustee may reasonably require, containing all the information in the possession or control of the Company, or any of its Paying Agents other than the Trustee, of the names and addresses of the Holders, as of such preceding Regular Record Date, and
(b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company 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.
ARTICLE 6.
REMEDIES
Section 6.01 Events of Default. Each of the following events shall be an “Event of Default” with respect to the Notes:
(a) default in any payment of interest on any Note when due and payable, and the default continues for a period of 30 calendar days;
(b) default in the payment of the principal on any Note (including any Fundamental Change Repurchase Price or Redemption Price, if applicable) when due and payable on the Maturity Date, upon any required repurchase, upon Optional Redemption, upon declaration of acceleration or otherwise;
(c) failure by the Company to comply with its obligations under Article 4 hereof to convert the Notes into cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable, upon exercise of a Holder’s conversion right and such failure continues for a period of five Business Days;
(d) failure by the Company to comply with its obligations under Article 9 hereof;
(e) failure by the Company give a notice in accordance with the provisions of (i) Section 3.02 hereof when due, and such failure continues for five Business Days, or (ii) Section 4.01(b)(iii) or Section 4.01(b)(iv) hereof when due, and such failure continues for a period of two Business Days;
(f) failure by the Company for 60 days after written notice from the Trustee or the Holders of at least 25% in principal amount of the Notes then Outstanding (a copy of which notice, if given by Holders, must also be given to the Trustee) has been received by the Company to comply with any of its other agreements contained in the Notes or this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section 6.01 specifically provided for or that is not applicable to the Notes), which notice shall state that it is a “Notice of Default” hereunder;
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(g) default by the Company or any of its Significant Subsidiaries with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced any indebtedness for money borrowed in excess of $75,000,000 (or its foreign currency equivalent at the time) in the aggregate of the Company and/or any of the Significant Subsidiaries of the Company, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness becoming or being declared due and payable or (ii) constituting a failure to pay the principal (or any unpaid interest that is due in connection with any failure to pay any such principal in excess of $75,000,000) of any such indebtedness when due and payable at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise, and, in the case of clauses (i) and (ii) of this Section 6.01(g) such acceleration shall not, after the expiration of any applicable grace period, have been rescinded or annulled or such failure to pay or default shall not have been cured or waived, or such indebtedness is not paid or discharged, as the case may be, within 30 calendar days after written notice to the Company by the Trustee or to the Company and the Trustee by Holders of at least 25% in aggregate principal amount of Notes then Outstanding in accordance with this Indenture; or
(h) the Company or any Significant Subsidiary of the Company shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary of the Company or any substantial part of the Company’s or such Significant Subsidiary of the Company’s property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or
(i) an involuntary case or other proceeding shall be commenced against the Company or any Significant Subsidiary of the Company seeking liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary of the Company or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary of the Company or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of sixty consecutive days.
Section 6.02 Acceleration; Waiver.
(a) If an Event of Default (other than an Event of Default specified in Section 6.01(h) hereof or Section 6.01(i) hereof with respect to the Company) occurs and is continuing, and is known to the Trustee, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the Notes then Outstanding by written notice to the Company and the Trustee, may declare 100% of the principal of, and accrued and unpaid interest, if any, on all the Notes then Outstanding to be due and
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payable immediately. Upon such a declaration, such principal, and accrued and unpaid interest, if any, shall be due and payable immediately. If an Event of Default specified in Section 6.01(h) or Section 6.01(i) with respect to the Company occurs and is continuing, 100% of the principal of, and accrued and unpaid interest, if any, on all Notes shall automatically become due and payable.
(b) The Holders of a majority in aggregate principal amount of Notes at the time outstanding, by written notice to the Trustee and the Company, may waive any current Default or Event of Default (except with respect to (i) any failure by the Company to pay the principal of or accrued interest on the Notes (including the Redemption Price and the Fundamental Change Repurchase Price, if applicable), (ii) any failure by the Company to comply with its obligations to repurchase Notes when required to do so under Article 3, (iii) any failure by the Company to pay or deliver, as the case may be, the consideration due upon conversion of the Notes or (iv) any covenant or provision of this Indenture or the Notes that cannot be modified or amended without the consent of all Holders as provided for in Section 8.02) and may rescind any acceleration of the Notes if (x) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (y) all existing Events of Default, other than the nonpayment of the principal of and interest on the Notes have become due solely by such acceleration, have been cured or waived.
Section 6.03 Additional Interest.
(a) Notwithstanding Section 6.02 hereof, to the extent the Company elects, the sole remedy for an Event of Default under Section 6.01(f) relating to the Company’s failure to comply with Section 5.04(a) hereof (such Event of Default, a “Reporting Event of Default”), will (i) for the first 180 days after the occurrence of such Reporting Event of Default (beginning on, and including, the date on which such Reporting Event of Default first occurs) consist exclusively of the right to receive Additional Interest on the Notes equal to 0.25% per annum of the principal amount of such Notes then Outstanding for each day during such 180-day period on which such Event of Default is continuing and (ii) for the period from, and including, the 181st day after the occurrence of such Reporting Event of Default to, and including the 360th day after the occurrence of such Reporting Event of Default, consist exclusively of the right to receive Additional Interest on the Notes equal to 0.50% per annum of the principal amount of the Notes Outstanding for each day during such additional 180-day period on which such Reporting Event of Default is continuing (subject to Sections 6.03(d) and (f), in addition to any Additional Interest that may accrue as described under Section 5.08).
(b) On the 361st day after the date on which the Reporting Event of Default occurred (if such Reporting Event of Default has not been cured or waived prior to such 361st day), the Notes will be subject to acceleration as provided in Section 6.02 hereof.
(c) In order to elect to pay the Additional Interest as the sole remedy during the first 360 days after the occurrence of a Reporting Event of Default, the Company must notify in writing all Holders of Notes, the Trustee and the Paying Agent of such election prior to the beginning of such 360-day period. Upon the Company’s failure to
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timely give such notice, the Notes shall be immediately subject to acceleration as provided in Section 6.02 hereof. In the event the Company does not elect to pay Additional Interest following a Reporting Event of Default or the Company elects to pay Additional Interest but does not pay the Additional Interest when due, the Notes will be subject to acceleration as provided in Section 6.02 hereof. Except as provided in the Section 6.03(d) below, nothing in this Section 6.03 shall affect the rights of Holders of Notes in the event of the occurrence of any other Event of Default.
(d) Such Additional Interest will be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on the Notes and will be in addition to any Additional Interest that may accrue pursuant to Section 5.08.
(e) With regard to any Reporting Event of Default, no Additional Interest shall accrue, and no right to declare the principal or other amounts due and payable in respect of the Notes with respect to such Reporting Event of Default shall exist, after such Reporting Event of Default has been cured.
(f) In no event shall Additional Interest payable at the Company’s election with regard to a Reporting Event of Default (including any Additional Interest that may accrue as a result of the Company’s failure to comply with its obligations pursuant to Section 5.08) accrue at a rate in excess of 0.50% per annum, regardless of the number of events or circumstances giving rise to the requirement to pay such Additional Interest.
Section 6.04 Control by Majority. At any time, the Holders of a majority of the aggregate principal amount of the then Outstanding Notes may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to the Trustee’s duties under Article 10 hereof, that the Trustee determines to be unduly prejudicial to the rights of a Holder or to the Trustee, or that would potentially involve the Trustee in personal liability unless the Trustee is offered (and if requested, provided) indemnity or security satisfactory to it against any loss, liability or expense to the Trustee that may result from the Trustee’s instituting such proceeding as the Trustee. Prior to taking any action hereunder, the Trustee will be entitled to indemnification satisfactory to the Trustee against all losses, liabilities and expenses caused or that may be caused by taking or not taking such action.
Section 6.05 Limitation on Suits. Subject to Section 6.06 hereof, no Holder may pursue a remedy with respect to this Indenture or the Notes unless:
(a) such Holder has previously delivered to the Trustee written notice that an Event of Default has occurred and is continuing;
(b) the Holders of at least 25% of the aggregate principal amount of the then Outstanding Notes deliver to the Trustee a written request that the Trustee pursue a remedy with respect to such Event of Default;
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(c) such Holder or Holders have offered and, if requested, provided to the Trustee indemnity satisfactory to the Trustee against any loss, liability or other expense of compliance with such written request;
(d) the Trustee has not complied with such written request within 60 days after receipt of such written request and offer of indemnity or security; and
(e) during such 60-day period, the Holders of a majority of the aggregate principal amount of the then Outstanding Notes did not deliver to the Trustee a direction inconsistent with such written request.
Section 6.06 Rights of Holders to Bring Suit. Notwithstanding anything to the contrary elsewhere in this Indenture, the right of any Holder to bring suit for the enforcement of any payment or delivery, as applicable, of the principal of, interest on, Fundamental Change Repurchase Price or Redemption Price, with respect to, on or after the respective due date, and to convert its Notes and to bring suit for the enforcement of the payment or delivery of cash, shares of Common Stock or combination of cash and shares of Common Stock, if any, as the case may be, due with respect to such Notes in accordance with Article 4 hereof, will not be impaired or affected without the consent of such Holder and will not be subject to the requirements of Section 6.05 hereof.
Section 6.07 Collection of Indebtedness; Suit for Enforcement by Trustee. If an Event of Default specified in Section 6.01(a), 6.01(b) or 6.01(c) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, interest on, Fundamental Change Repurchase Price or Redemption Price for, and the amount of cash, the number of shares of Common Stock or the combination of cash and shares of Common Stock, if any, as the case may be, due upon the conversion of, the Notes, as the case may be, and such further amount as is sufficient to cover the costs and expenses of collection, including the compensation and reasonable expenses, disbursements and advances of the Trustee, its agents and counsel, as well as any other amounts that may be due under Section 10.07 hereof.
Section 6.08 Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under this Indenture or the Notes may be prosecuted and enforced by the Trustee without the possession of any of the Notes 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 compensation, and reasonable expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders in respect of which such judgment has been recovered.
Section 6.09 Trustee May File Proofs of Claim. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company, its creditors or its property and, unless prohibited by law or applicable regulations, will be entitled to collect, receive and distribute any money or other property payable or deliverable on any such claims, and any custodian in any such judicial proceeding is hereby authorized by each Holder to
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make such payments to the Trustee, and, in the event that the Trustee consents to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the compensation and reasonable expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 10.07 hereof. 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 Section 10.07 hereof out of the estate in any such proceeding, will be denied for any reason, payment of the same will be secured by a lien on, and is 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. Nothing herein contained will be deemed to authorize the Trustee to authorize or consent to, or to accept or to adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 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 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, 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 6.11 Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.09 hereof, 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 6.12 Delay or Omission Not a Waiver. No delay or omission of the Trustee or of any Holder 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 6 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 (subject to the limitations contained in this Indenture) or by the Holders, as the case may be.
Section 6.13 Priorities. If the Trustee collects any money or property pursuant to this Article 6, it will pay out the money or property in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due under Section 10.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;
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SECOND: to the Holders, for any amounts due and unpaid on the principal of, accrued and unpaid interest on, Fundamental Change Repurchase Price or Redemption Price for, and any cash due upon conversion of, any Note, without preference or priority of any kind, according to such amounts due and payable on all of the Notes; and
THIRD: the balance, if any, to the Company or to such other party as a court of competent jurisdiction directs.
The Trustee may fix a record date and payment date for any payment to the Holders pursuant to this Section 6.13. If the Trustee so fixes a record date and a payment date, at least 15 calendar days prior to such record date, the Trustee will deliver to each Holder a written notice, which notice will state such record date, such payment date and the amount of such payment.
Section 6.14 Undertaking for Costs. All parties to this Indenture agree, and each Holder, by such Holder’s acceptance of a Note, shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided, however, that the provisions of this Section 6.14 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in aggregate principal amount of the Notes then Outstanding, or to any suit instituted by any Holder for the enforcement of the payment of the principal of, accrued and unpaid interest, if any, on, Fundamental Change Repurchase Price or Redemption Price for, any Note on or after the due date expressed or provided for in this Indenture or to any suit for the enforcement of the right to convert any Note in accordance with the provisions of Article 4 hereof.
Section 6.15 Waiver of Stay, Extension and Usury Laws. The Company covenants that, to the extent that it may lawfully do so, it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company, 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, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will instead suffer and permit the execution of every such power as though no such law has been enacted.
ARTICLE 7.
SATISFACTION AND DISCHARGE
Section 7.01 Discharge of Liability on Notes. When (a) the Company shall deliver to the Trustee for cancellation all Notes theretofore authenticated (other than any Notes that have been destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) and not theretofore canceled, or (b) all the Notes not theretofore canceled or delivered to the Trustee for cancellation shall have become due and payable (whether
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on the Maturity Date, any Fundamental Change Repurchase Date, any Redemption Date, upon conversion or otherwise) and the Company shall deposit with the Trustee, in trust, or deliver to the Holders, as applicable, an amount of cash, a number of shares of Common Stock, or a combination of cash and shares of Common Stock, if any, as the case may be (solely to settle amounts due with respect to outstanding conversions), sufficient to pay all amounts due on all of such Notes (other than any Notes that shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) not theretofore canceled or delivered to the Trustee for cancellation, including principal and interest due, accompanied, except in the event the Notes are due and payable solely in cash at the Maturity Date or upon an earlier Fundamental Change Repurchase Date or Redemption Date, by a verification report as to the sufficiency of the deposited amount from an independent certified accountant or other financial professional, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect (except as to (i) rights hereunder of Holders to receive from such trust all amounts owing upon the Notes and the other rights, duties and obligations of Holders, as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee and (ii) the rights, obligations and immunities of the Trustee hereunder), and the Trustee, on written demand of the Company accompanied by an Officer’s Certificate and an Opinion of Counsel and at the cost and expense of the Company, shall execute such instruments reasonably requested by the Company acknowledging satisfaction and discharge of this Indenture and the Notes; the Company, however, hereby agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee, including the fees and expenses of its counsel, and to compensate the Trustee its services thereafter in accordance with Section 10.07.
Section 7.02 Deposited Monies to Be Held in Trust by Trustee. Subject to Section 7.04 hereof, all monies and shares of Common Stock, as the case may be, deposited with the Trustee pursuant to Section 7.01 hereof shall be held in trust for the sole benefit of the Holders of the Notes, and such monies and shares of Common Stock shall be applied by the Trustee to the payment, either directly or through any Paying Agent (including the Company if acting as its own Paying Agent), to the Holders of the particular Notes for the payment or settlement of which such monies or shares of Common Stock, or both, as the case may be, have been deposited with the Trustee, of all sums or amounts due and to become due thereon for principal and interest, if any.
Section 7.03 Paying Agent to Repay Monies Held. Upon the satisfaction and discharge of this Indenture, all monies and shares of Common Stock, as the case may be, then held by any Paying Agent (if other than the Trustee) shall, upon written request of the Company, be repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be released from all further liability with respect to such monies and shares of Common Stock, or both, as the case may be.
Section 7.04 Return of Unclaimed Monies. Subject to the requirements of applicable law, any monies and shares of Common Stock deposited with or paid to the Trustee for payment of the principal of or interest, if any, on the Notes and not applied but remaining unclaimed by the Holders of the Notes for two (2) years after the date upon which the principal of or interest, if any, on such Notes, as the case may be, shall have become due and payable, shall be repaid to the Company by the Trustee on demand, and all liability of the Trustee shall thereupon cease with respect to such monies and shares of Common Stock; and the Holder shall thereafter look only to the Company for any payment or delivery that such Holder may be entitled to collect unless an applicable abandoned property law designates another Person.
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Section 7.05 Reinstatement. If the Trustee or the Paying Agent is unable to apply any money or shares of Common Stock, or both, as the case may be, in accordance with Section 7.02 hereof by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under the Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 7.01 hereof until such time as the Trustee or the Paying Agent is permitted to apply all such money and shares of Common Stock in accordance with Section 7.02 hereof; provided, however, that if the Company makes any payment of interest on, principal of or payment or delivery in respect of any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or shares of Common Stock, if any, held by the Trustee or Paying Agent.
ARTICLE 8.
SUPPLEMENTAL INDENTURES
Section 8.01 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Company 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:
(a) to cure any ambiguity, omission, defect or inconsistency in this Indenture or the Notes that does not adversely affect the rights of the Holders in any material respect;
(b) to conform the terms of this Indenture or the Notes to the description thereof in the Preliminary Offering Circular, as supplemented by the pricing term sheet related to the offering of the Notes as such provision is set forth in an Officer’s Certificate;
(c) to evidence the succession by a Successor Company and to provide for the assumption by a Successor Company of the Company’s obligations under the Indenture;
(d) to add guarantees with respect to the Notes;
(e) to adjust the Conversion rate as provided or permitted or required herein.
(f) to secure the Notes;
(g) to add to the Company’s covenants or Events of Default or conditions for the benefit of the Holders or surrender any right or power conferred upon the Company by the Indenture;
(h) to make any other change that does not adversely affect the rights of any Holder (other than any Holder that consents to such change);
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(i) to provide for the acceptance of appointment by a successor Trustee or facilitate the administration of the trusts hereunder by more than one Trustee;
(j) upon the occurrence of a Share Exchange Event, solely (x) to provide that the Notes are convertible into Reference Property, as required under Section 4.07, and (y) to effect the related changes to the terms of the Notes required under Section 4.07, in each case, in accordance with the applicable provisions hereof;
(k) to comply with the Applicable Procedures; or
(l) to irrevocably elect a Settlement Method or eliminate, in the aggregate, any one or two Settlement Methods or, in the case of Combination Settlement, irrevocably elect a Specified Dollar Amount (including a minimum Specified Dollar Amount); provided, however, that no such election or elimination will affect any Settlement Method theretofore elected or deemed to be elected) with respect to any Note pursuant to Article 4.
Section 8.02 Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in principal amount of the Outstanding Notes (including, without limitation, consents obtained in connection with a purchase of, or tender or exchange offer for, Notes) (i) the Company, 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 under this Indenture and (ii) any past Default or compliance with any covenants or provisions of this Indenture may be waived (other than a Default or an Event of Default resulting from the failure to pay principal or interest on the Notes, the Fundamental Change Repurchase Price or Redemption Price, or to pay or deliver, as the case may be, the amount of cash, the number of shares of Common Stock or combination of cash and shares of Common Stock, if any, as the case may be, due upon conversion of a Note); provided, however, that no such supplemental indenture or waiver shall, without the consent of the Holder of each Outstanding Note affected thereby, among other things:
(a) reduce the percentage in aggregate principal amount of Notes then Outstanding necessary to waive any past Default or Event of Default;
(b) reduce the rate of interest on any Note or extend the time for payment of interest on any Note;
(c) reduce the principal on any Note or change the Maturity Date of any Note;
(d) change the place or currency of payment on any Note;
(e) except as required under Section 4.07 hereof, make any change that impairs or adversely affects the conversion rights of any Notes;
(f) reduce the Redemption Price or the Fundamental Change Repurchase Price of any Note or amend or modify in any manner adverse to the rights of the Holders of the Notes the Company’s obligation to make such payments, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;
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(g) impair the right of any Holder of Notes to bring suit for the enforcement of any payment or delivery, as applicable, of the principal of and interest on, the Fundamental Change Repurchase Price or Redemption Price with respect to, and the amount of cash, number of shares of Common Stock or combination of cash and shares of Common Stock, as the case may be, due upon conversion of, such Note on or after the respective due dates therefor;
(h) modify the ranking provisions of this Indenture in a manner that is adverse to the rights of the Holders of the Notes; or
(i) make any change to the provisions of this Article 8 that requires each Holder’s consent or in the waiver provisions of this Indenture if such change is adverse to the rights of Holders of the Notes.
It shall not be necessary for any Act or consent of Holders under this Section 8.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act or consent shall approve the substance thereof. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to consent to any indenture supplemental hereto. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to consent to such supplemental indenture, whether or not such Holders remain Holders after such record date; provided that, unless such consent shall have become effective by virtue of the requisite percentage having been obtained prior to the date which is 90 calendar days after such record date, any such consent previously given shall automatically and without further action by any Holder be cancelled and of no further effect.
Section 8.03 Notice of Amendment or Supplement. After an amendment or supplement under this Article 8 becomes effective, the Company shall provide to the Holders (with a copy to the Trustee) a written notice briefly describing such amendment or supplement. However, the failure to give such notice to all the Holders, or any defect in the notice, shall not impair or affect the validity of the amendment or supplement.
Section 8.04 Trustee to Sign Amendments, Etc. The Trustee shall sign any amendment or supplement authorized pursuant to this Article 8 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment or supplement, the Trustee shall receive, and, shall be fully protected in conclusively relying upon, an Officer’s Certificate and an Opinion of Counsel provided at the expense of the Company providing that such amendment or supplement is authorized or permitted by the Indenture and that such amendment or supplement is the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.
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ARTICLE 9.
SUCCESSOR COMPANY
Section 9.01 Company May Consolidate, Etc. on Certain Terms. The Company shall not amalgamate or consolidate with, merge with or into or convey, transfer or lease its consolidated properties and assets substantially as an entirety to another Person, unless:
(a) either (i) the Company is the Person formed by or surviving such merger or consolidation and the Company remains a corporation organized and validly existing under the laws of the United States, any state thereof or the District of Columbia, or (ii) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person that acquires by conveyance or transfer, or which leases, all or substantially all of the Company’s properties and assets (the “Successor Company”) is a corporation organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia, and the Successor Company (if not the Company) expressly assumes, by a supplemental indenture, executed and delivered to the Trustee, all of the obligations of the Company under the Notes and this Indenture as applicable to the Notes;
(b) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing under this Indenture with respect to the Notes; and
(c) if the Company is not the Successor Company, all the conditions specified in Section 9.03 are met.
Upon any such amalgamation, consolidation, merger, conveyance, transfer or lease, the Successor Company (if not the Company) shall succeed to, and may exercise every right and power of the Company under this Indenture, and the Company shall be discharged from its obligations under the Notes and the Indenture except in the case of any such lease.
Notwithstanding the foregoing, this Section 9.01 will not apply to any conveyance, transfer or lease of properties or assets to the Company or to one or more of the Company’s direct or indirect Subsidiaries that are wholly-owned or that would be wholly-owned but for any directors’ qualifying shares as required by law or shares held by nominees on behalf of such Subsidiaries as required by law.
Section 9.02 Successor Corporation to Be Substituted. In case of any such amalgamation, consolidation, merger, conveyance, transfer or lease and upon the assumption by the Successor Company (if other than the Company), by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of (including any Fundamental Change Repurchase Price and any Redemption Price), if any, accrued and unpaid interest, if any, on all of the Notes, the due and punctual delivery or payment, as the case may be, of any Settlement Amount due upon conversion of the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Company under this Indenture, such Successor Company shall succeed to and be substituted for, and may exercise every right and power of, the Company
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under this Indenture, with the same effect as if it had been named herein as the party of the first part; provided, however, that in the case of a conveyance, transfer or lease to one or more of its Subsidiaries of all or substantially all of the properties and assets of the Company, the Notes will remain convertible based on the Common Stock and into cash, shares of Common Stock, or a combination of cash and shares of Common Stock, if any, as the case may be, in accordance with Section 4.03 hereof, but subject to adjustment (if any) in accordance with Section 4.07 hereof. Such Successor Company thereupon may cause to be signed, and may issue either in its own name or in the name of the Company any or all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such Successor Company instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause to be authenticated and delivered, any Notes that previously shall have been signed and delivered by the Officers of the Company to the Trustee for authentication, and any Notes that such Successor Company thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Notes so issued shall in all respects have the same legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Notes had been issued at the date of the execution hereof. In the event of any such amalgamation, consolidation, merger, conveyance or transfer (but not in the case of a lease), the Person named as the “Company” in the first paragraph of this Indenture or any successor that shall thereafter have become such in the manner prescribed in this Article 9 may be dissolved, wound up and liquidated at any time thereafter and, except in the case of a lease, such Person shall be released from its liabilities as obligor and maker of the Notes and from its obligations under this Indenture.
In case of any such amalgamation, consolidation, merger, conveyance, transfer or lease, such changes in phraseology and form (but not in substance) may be made in the Notes thereafter to be issued as may be appropriate.
Section 9.03 Opinion of Counsel to Be Given to Trustee. In the case of any amalgamation, merger, consolidation, conveyance, transfer or lease under this Article 9, the Trustee shall receive an Officer’s Certificate and an Opinion of Counsel stating that any such amalgamation, consolidation, merger, conveyance, transfer or lease and any such assumption and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, complies with the provisions of this Indenture.
ARTICLE 10.
THE TRUSTEE
Section 10.01 Duties and Responsibilities of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee. In case an Event of Default has occurred (which has not been cured or waived) and the Trustee has notice of such fact, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care in their exercise, as a prudent person would use in the conduct of his or her own affairs.
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(b) 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:
(i) prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default which may have occurred:
(A) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture and applicable law, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(B) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein);
(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless the Trustee was negligent in ascertaining the pertinent facts;
(iii) 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 written direction of the Holders of not less than a majority in principal amount of the Notes at the time Outstanding determined as provided in Section 1.03 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;
(iv) whether or not therein provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this Section 10.01;
(v) the Trustee shall not be liable in respect of any payment (as to the correctness of amount, entitlement to receive or any other matters relating to payment) or notice effected by the Company or any Paying Agent or any records maintained by any co-Registrar with respect to the Notes; and
(vi) if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred.
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None of the provisions contained in 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 or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or indemnity or security satisfactory to the Trustee against such risk or liability is not reasonably assured to it.
Section 10.02 Notice of Defaults. The Trustee shall give the Holders notice of any Default of which the Trustee has knowledge or is deemed to have notice under Section 10.01(a) within 90 days after the occurrence thereof so long as such Default is continuing; provided, that (except in the case of any Default in the payment of principal amount of, or interest on, any of the Notes or Fundamental Change Repurchase Price or Redemption Price or a Default in the delivery of the consideration due upon conversion), the Trustee shall be protected in withholding such notice if and so long as it in good faith determines that the withholding of such notice is in the interest of the Holders of Notes.
Section 10.03 Reliance on Documents, Opinions, Etc. Except as otherwise provided in Section 10.01:
(a) the Trustee may conclusively rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, note, coupon or other paper or document (whether in its original or facsimile form) believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officer’s Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a Board Resolution;
(c) the Trustee may consult with counsel of its own selection and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;
(d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture (including upon the occurrence and during the continuance of an Event of Default), unless such Holders shall have offered (and if requested, provided) to the Trustee security or indemnity satisfactory to it against any loss, expenses and liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts
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or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney (at the reasonable expense of the Company and shall incur no liability of any kind by reason of such inquiry or investigation);
(f) 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 by it with due care hereunder;
(g) the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;
(h) in no event shall the Trustee be responsible or liable for special, indirect, consequential or punitive loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;
(i) the Trustee shall not be deemed to have notice of any Default or Event of Default unless written notice of any event which is in fact such a Default is received by a Responsible Officer of the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and the Indenture;
(j) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, Custodian and other Person employed to act hereunder;
(k) the Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder;
(l) the Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture;
(m) any discretion, permissive right or privilege in favor of the Trustee, if any, shall not be construed as a duty or obligation.
Section 10.04 No Responsibility for Recitals, Etc. The recitals contained herein and in the Notes (except in the Trustee’s certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Notes. The Trustee shall not be accountable for the use or application by the Company of any Notes or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the provisions of this Indenture.
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Section 10.05 Trustee, Paying Agents, Exchange Agents or Registrar May Own Notes. The Trustee, any Paying Agent, any Conversion Agent or Registrar, in its individual or any other capacity, may become the owner or pledgee of Notes with the same rights it would have if it were not Trustee, Paying Agent, Conversion Agent or Registrar.
Section 10.06 Monies to be Held in Trust. Subject to the provisions of Section 10.07, all monies and properties received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as may be agreed in writing from time to time by the Company and the Trustee.
Section 10.07 Compensation and Expenses of Trustee. The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, such compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as mutually agreed to from time to time in writing between the Company and the Trustee, and the Company will pay or reimburse the Trustee upon its request for all reasonable, out-of-pocket expenses, disbursements and advances reasonably incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its gross negligence or willful misconduct.
The Company also covenants to indemnify the Trustee (or any officer, director or employee of the Trustee), in any capacity under this Indenture and its agents and any Authenticating Agent for, and to hold them harmless against, any and all loss, liability, claim or expense incurred without gross negligence or willful misconduct on the part of the Trustee or such officers, directors, employees and agent or Authenticating Agent, as the case may be, and arising out of or in connection with the acceptance or administration of this trust or in any other capacity hereunder, including the costs and expenses of defending themselves against any claim (whether asserted by the Company, a Holder or any other Person) of liability in the premises. 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 have one firm of separate counsel except in the event local counsel shall be required and the Company shall pay the reasonable fees and expenses of such counsel and local counsel, as applicable. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 10.07 to compensate or indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall be secured by a lien prior to that of the Notes upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Notes. The obligation of the Company under this Section shall survive the satisfaction and discharge of this Indenture or the resignation or removal of the Trustee. “Trustee” for purposes of this Section 10.07 shall include any predecessor Trustee; provided, however, the gross negligence or willful misconduct of any Trustee hereunder shall not affect the rights of any other Trustee hereunder.
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When the Trustee and its agents and any Authenticating Agent incur expenses or render services after an Event of Default specified in Section 6.01(h) and 6.01(i) with respect to the Company occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy, insolvency or similar laws.
Section 10.08 Officer’s Certificate as Evidence. Except as otherwise provided in Section 10.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by an Officer’s Certificate delivered to the Trustee.
Section 10.09 Eligibility of Trustee. There shall at all times be a Trustee hereunder which shall be a Person that has a combined capital and surplus of at least $50,000,000 (or if such Person is a member of a bank holding company system, its bank holding company shall have a combined capital and surplus of at least $50,000,000). If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this Section the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 10.09, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.
Section 10.10 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign by giving written notice of such resignation to the Company and to the Holders of Notes. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment thirty (30) days after the mailing of such notice of resignation to the Holders, the resigning Trustee may, upon ten (10) Business Days’ notice to the Company and the Holders, petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor trustee, or, if any Holder who has been a bona fide Holder of a Note or Notes for at least six (6) months may, subject to the provisions of Section 6.14, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall cease to be eligible in accordance with the provisions of Section 10.09 and shall fail to resign after written request therefor by the Company or by any such Holder; or
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(ii) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 6.14, any Holder who has been a bona fide Holder of a Note or Notes for at least six (6) months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee; provided, however, that if no successor Trustee shall have been appointed and have accepted appointment thirty (30) days after either the Company or the Holders has removed the Trustee, the Trustee so removed may petition at the Company’s expense any court of competent jurisdiction for an appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the Notes at the time Outstanding may at any time remove the Trustee and nominate a successor trustee which shall be deemed appointed as successor trustee unless, within ten (10) days after notice to the Company of such nomination, the Company objects thereto, in which case the Trustee so removed or any Holder, or if such Trustee so removed or any Holder fails to act, the Company, upon the terms and conditions and otherwise as provided in Section 10.10(a), may petition, at the expense of the Company, any court of competent jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 10.10 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 10.11.
Section 10.11 Acceptance by Successor Trustee. Any successor trustee appointed as provided in Section 10.10 shall execute, acknowledge and deliver to the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the trustee ceasing to act shall, upon payment of any amount then due it pursuant to the provisions of Section 10.07, execute and deliver an instrument transferring to such successor trustee all the rights and powers of the trustee so ceasing to act. Upon request of any such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon all property and funds held or collected by such trustee as such, except for funds held in trust for the benefit of Holders of particular Notes, to secure any amounts then due it pursuant to the provisions of Section 10.07.
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No successor trustee shall accept appointment as provided in this Section 10.11 unless, at the time of such acceptance, such successor trustee shall be eligible under the provisions of Section 10.09.
Upon acceptance of appointment by a successor trustee as provided in this Section 10.11, the Company (or the former trustee, at the written direction of the Company) shall mail or cause to be mailed notice of the succession of such trustee hereunder to the Holders of Notes at their addresses as they shall appear on the Register. If the Company fails to mail such notice within ten (10) days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Company.
Section 10.12 Succession by Merger, Etc. Any organization or entity into which the Trustee may be merged or exchanged or with which it may be consolidated, or any organization or entity resulting from any merger, exchange or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee (including any trust created by this Indenture), shall be the successor to the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that in the case of any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, such corporation shall be eligible under the provisions of Section 10.09.
In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee or Authenticating Agent appointed by such predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee or any Authenticating Agent appointed by such successor trustee may authenticate such Notes in the name of the successor trustee; and in all such cases such certificates shall have the full force that is provided in the Notes or in this Indenture; provided, however, that the right to adopt the certificate of authentication of any predecessor trustee or authenticate Notes in the name of any predecessor trustee shall apply only to its successor or successors by merger, exchange or consolidation.
Section 10.13 Trustee’s Application for Instructions from the Company. Any application by the Trustee for written instructions from the Company (other than with regard to any action proposed to be taken or omitted to be taken by the Trustee that affects the rights of the Holders of the Notes under this Indenture) may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three (3) Business Days after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing to any earlier date) unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted.
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ARTICLE 11.
OPTIONAL REDEMPTION
Section 11.01 Right to Redeem. The Company shall not redeem the Notes prior to June 22, 2026, and no sinking fund is provided for the Notes.
(a) On or after June 22, 2026, the Company may redeem (an “Optional Redemption”) for cash all or any portion of the Notes in cash at the applicable Redemption Price if the Last Reported Sale Price of the Common Stock has been at least 130% of the Conversion Price for the Notes then in effect for at least 20 Trading Days (whether or not consecutive) during any 30 consecutive Trading Day period (including the last Trading Day of such period) ending on, and including, the Trading Day immediately preceding the date on which the Company provides the Redemption Notice in accordance with Section 11.01(b) and Section 11.03; provided, however, that the Company will not be entitled to call less than all of the Outstanding Notes for Optional Redemption unless the principal amount of Notes Outstanding and not subject to Optional Redemption as of the relevant Redemption Date is at least $100,000,000.
(b) In the case of any Optional Redemption, the Company shall fix a date for redemption (each, a “Redemption Date”) and it or, at its written request received by the Trustee, the Trustee, in the name of and at the expense of the Company, shall deliver or cause to be delivered a notice of such Optional Redemption (a “Redemption Notice”) not less than 30 nor more than 45 Scheduled Trading Days prior to the Redemption Date to the Trustee, the Paying Agent (if other than the Trustee) and each Holder of Notes; provided, however, that, if the Company shall give such notice, it shall also give written notice of the Redemption Date to the Trustee, the Conversion Agent (if other than the Trustee) and the Paying Agent (if other than the Trustee). The Redemption Date must be a Business Day. The Company may not specify a Redemption Date that falls on or after the 26th Scheduled Trading Day immediately preceding the Maturity Date. In the case of any Optional Redemption in part, Holders of Notes not called for Optional Redemption will not be entitled to an increased Conversion Rate for such Notes in accordance with Section 4.06, except to the limited extent described in Section 11.07.
Section 11.02 Redemption Price. The “Redemption Price” for the Notes to be redeemed on any Redemption Date shall be calculated by the Company and be an amount equal to 100% of the principal amount of such Notes, plus accrued and unpaid interest to, but excluding, the Redemption Date (unless the Redemption Date falls after a Regular Record Date but on or prior to the immediately succeeding Interest Payment Date, in which case the Company will pay the full amount of accrued and unpaid interest on or, at the Company’s election, before such Interest Payment Date, to the Holder of record as of the Close of Business on such Regular Record Date, and the Redemption Price will be equal to 100% of the principal amount of the such Notes.
Section 11.03 Redemption Notice. The Redemption Notice, if delivered in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice. In any case, failure to give such Redemption Notice by mail or any defect in the Redemption Notice to the Holder of any Note designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Note.
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(a) Each Redemption Notice shall be given to each Holder of Notes and shall state:
(i) the Redemption Date (which must be a Business Day);
(ii) the Redemption Price;
(iii) in the case of a partial redemption, which Notes have been called for redemption;
(iv) that on the Redemption Date, the Redemption Price will become due and payable upon each such Note, and that interest thereon, if any, shall cease to accrue on and after the Redemption Date;
(v) the place or places where such Notes are to be surrendered for payment of the Redemption Price;
(vi) that Holders may surrender their Notes for conversion at any time prior to the Close of Business on the second Business Day immediately preceding the Redemption Date;
(vii) the Settlement Method, Specified Dollar Amount (if applicable) and Observation Period which will apply to all conversions after the Company issues such Redemption Notice and on or prior to the second Business Day immediately preceding the Redemption Date;
(viii) the procedures a converting Holder must follow to convert its Notes;
(ix) the Conversion Rate and, if applicable, the number of Additional Shares under Section 4.06; and
(x) the CUSIP, ISIN or other similar numbers, if any, assigned to such Notes.
(b) A Redemption Notice 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; provided that the Company shall have delivered to the Trustee, at least five (5) Business Days before the Redemption Notice is required to be given (or such shorter period agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and attaching the form of Redemption Notice and including the information to be stated in such notice.
(c) A Redemption Notice shall be irrevocable.
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Section 11.04 Payment of Notes Called for Redemption.
(a) If any Redemption Notice has been given in respect of the Notes in accordance with Section 11.01(b) and Section 11.03, the Notes shall become due and payable on the Redemption Date at the place or places stated in the Redemption Notice and at the applicable Redemption Price. On presentation and surrender of the Notes at the place or places stated in the Redemption Notice, the Notes shall be paid and redeemed by the Company at the applicable Redemption Price. Any Notes redeemed by the Company shall be paid in cash.
(b) Prior to the Open of business on the Redemption Date, the Company shall deposit with the Paying Agent or, if the Company is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 10.06, an amount of cash (in immediately available funds if deposited on the Redemption Date) sufficient to pay the Redemption Price for all of the Notes to be redeemed on such Redemption Date. Subject to the Paying Agent holding money sufficient to pay the Redemption Price for all of the Notes to be redeemed on such Redemption Date, upon surrender of any Note for redemption in accordance with the Redemption Notice, payment for the Notes to be redeemed shall be made on the Redemption Date for such Notes.
(c) Any cash amounts due upon redemption in respect of the Notes presented for redemption shall be paid by the Company to such Holder, or such Holder’s nominee or nominees. The Paying Agent shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Redemption Price.
Section 11.05 Redemption in Part.
(a) If fewer than all of the outstanding Notes are to be redeemed and the Notes to be redeemed are Global Notes, the Depositary shall select the Notes to be redeemed in accordance with the Applicable Procedures. If fewer than all of the outstanding Notes are to be redeemed and the Notes to be redeemed are Physical Notes in certificated form, the Trustee shall select the Notes or portions thereof to be redeemed (in principal amounts of $1,000 or multiples thereof) by lot, on a pro rata basis, or by another method the Trustee considers to be fair and appropriate. If any Note selected for partial redemption by the Trustee is submitted for conversion in part after such selection, the portion of the Note submitted for conversion shall be deemed (so far as may be possible) to be the portion selected for redemption.
(b) In the event of any redemption in part, the Company, the Trustee and the Registrar shall not be required to register the transfer of or exchange any Notes so selected for redemption, in whole or in part, except the unredeemed portion of any Notes being redeemed in part.
Section 11.06 Restrictions on Redemption. The Company may not redeem any Notes on any date if the principal amount of the Notes has been accelerated in accordance with the terms of this Indenture, and such acceleration has not been rescinded, on or prior to the Redemption Date (including as a result of the payment of the Redemption Price and any related interest on the Redemption Date).
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Section 11.07 Special Provisions for Partial Calls. If the Company elects to redeem less than all of the outstanding Notes pursuant to this Article 11, and the Holder of any Note, or any owner of a beneficial interest in any Global Note, is reasonably not able to determine, before the Close of Business on the 27th Scheduled Trading Day immediately before the Redemption Date for such Optional Redemption, whether such Note or beneficial interest, as applicable, is to be redeemed pursuant to such Optional Redemption, then if such Holder or owner, as applicable, elects to convert such Note or beneficial interest, as applicable, at any time before the Close of Business on the second Business Day immediately before such Redemption Date, each such conversion will be deemed to be of a Note called for Redemption for purposes of this Article 11 and Section 4.06.
The Trustee shall have no obligation to determine whether a Holder or beneficial owner of any Note is to be redeemed in the event of a partial redemption, and shall have no obligation to calculate the Conversion Rate or any increase thereof as a result of an Optional Redemption. In the case of Global Notes, any redemption and conversion of Notes in connection with a redemption shall be subject to the Applicable Procedures.
ARTICLE 12.
MISCELLANEOUS
Section 12.01 Effect on Successors and Assigns. All agreements of the Company, the Trustee, the Registrar, the Paying Agent, the Bid Solicitation Agent and the Conversion Agent in this Indenture and the Notes will bind their respective successors.
Section 12.02 Governing Law. This Indenture and the Notes, and any claim, controversy or dispute arising under or related to the Indenture or the Notes, will be governed by, and construed in accordance with, the laws of the State of New York. To the fullest extent permitted by applicable law, the Company hereby irrevocably submits to the jurisdiction of any Federal or State court located in the Borough of Manhattan in The City of New York, New York in any suit, action or proceeding based on or arising out of or relating to this Indenture or any Notes and irrevocably agrees that all claims in respect of such suit or proceeding may be determined in any such court. The Company irrevocably waives, to the fullest extent permitted by law, any objection which it may have to the laying of the venue of any such suit, action or proceeding brought in an inconvenient forum. The Company agrees that final judgment in any such suit, action or proceeding brought in such a court shall be conclusive and binding upon the Company, and may be enforced in any courts to the jurisdiction of which the Company is subject by a suit upon such judgment, provided, that service of process is effected upon the Company in the manner specified herein or as otherwise permitted by law.
Section 12.03 No Note Interest Created. Nothing in this Indenture or in the Notes, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.
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Section 12.04 Voting. In determining whether the Holders of the requisite aggregate principal amount of Notes have concurred in any direction, consent, waiver or other action under this Indenture, Notes that are owned by the Company, by any of its Subsidiaries or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any of its Subsidiaries shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purposes of determining whether the Trustee shall be protected in relying upon any request, demand, authorization, direction, notice, consent or waiver or other action that is to be made by a requisite principal amount of Outstanding Notes, only such Notes which a Responsible Officer of the Trustee actually knows to be so owned shall be disregarded. Notes so owned that have been pledged in good faith may be regarded as Outstanding for such purposes if the pledgee shall establish its right to so act with respect to such Notes and that the pledgee is not the Company, one of its Subsidiaries or a Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or one of its Subsidiaries.
Section 12.05 Benefits of Indenture. Nothing in this Indenture or in the Notes, expressed or implied, will give to any Person, other than the parties hereto, any Paying Agent, any Conversion Agent, any Authenticating Agent, any Registrar or their successors hereunder or the Holders of the Notes, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 12.06 Calculations. Except as otherwise provided in this Indenture, the Company shall be responsible for making all calculations called for under the Indenture and the Notes. These calculations include, but are not limited to, determinations of the Stock Price, Last Reported Sale Prices, Trading Prices and Daily VWAPs of the Common Stock, the Trading Prices of the Notes, the Daily Conversion Values, the Daily Settlement Amounts, accrued interest payable on the Notes, Additional Interest, if any, any Redemption Price and the Conversion Rate, including adjustments to the Conversion Price and the Conversion Rate, including, without limitation, adjustments to the Conversion Rate in connection with an Optional Redemption. The Company shall make all these calculations in good faith and, absent manifest error, its calculations will be final and binding on Holders, the Trustee and the Conversion Agent. The Company shall provide a schedule of its calculations to each of the Trustee, the Bid Solicitation Agent and the Conversion Agent, and each of the Trustee, the Bid Solicitation Agent and the Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The Trustee shall forward the Company’s calculations to any Holders upon the written request of that Holder.
Whenever the Company is required to calculate or make adjustments to the Conversion Rate, the Company will do so to the nearest 1/10,000th of a share of Common Stock, rounding any additional decimal places up or down in a commercially reasonable manner.
Section 12.07 Execution in Counterparts; Electronic Signature Valid. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, New York Electronic Signature and Records Act or other applicable law (e.g., www.docusign.com), shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes. The foregoing shall also apply to any amendment, waiver, supplement or supplemental indenture hereto.
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Section 12.08 Notices, Etc. to Trustee and Company.
(a) Except as otherwise provided herein, any request, demand, authorization, direction, notice, consent, election, 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,
(i) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (including facsimile or electronically in PDF format) to or with the Trustee at its Corporate Trust Office; or
(ii) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid (and, in the case of securities held in book-entry form, by electronic transmission), to the Company addressed to it at the address of its principal office at 1001 Ridder Park Drive, San Jose, CA 95131, Attn: Secretary and General Counsel or at any other address furnished in writing to the Trustee by the Company prior to such mailing or electronically in PDF format.
(b) The Company or the Trustee, by notice given to the other in the manner provided in this Section 12.08, may designate additional or different addresses for subsequent notices or communications.
(c) Whenever the Company is required to deliver notice to the Holders, the Company will, by the date it is required to deliver such notice to the Holders, deliver a copy of such notice to the Trustee, the Paying Agent, the Registrar and the Conversion Agent. Each notice to the Trustee, the Paying Agent, the Registrar and the Conversion Agent shall be sufficiently given upon actual receipt by the Trustee, Paying Agent, Registrar or Conversion Agent (as the case may be).
(d) Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by the Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
(e) Where this Indenture provides for notice of any event to a Holder of a Global Note, such notice shall be sufficiently given if given to the Depositary for such Note (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.
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(f) The Trustee shall not have any duty to confirm that the person sending any notice, instruction or other communication by electronic transmission (including by e-mail, facsimile transmission, web portal or other electronic methods) is, in fact, a person authorized to do so. Each other party assumes all risks arising out of the use of electronic signatures and electronic methods to send communications to the Trustee, including without limitation the risk of the Trustee acting on an unauthorized communication, and the risk of interception or misuse by third parties. Notwithstanding the foregoing, the Trustee may in any instance and in its sole discretion require that an original document bearing a manual signature be delivered to the Trustee in lieu of, or in addition to, any such electronic communication.
Section 12.09 No Recourse Against Others. No director, officer, employee, incorporator or stockholder of the Company shall have any liability for any obligations of the Company under the Notes, the Indenture or any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder, by accepting a Note, waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
Section 12.10 Tax Withholding. Notwithstanding anything herein to the contrary, the Company or any other withholding agent is permitted to withhold, or backup withhold, from interest payments and payments upon conversion, redemption, repurchase, or maturity of the Notes, any amounts the Company or other withholding agent is required to withhold or backup withhold by law. If the Company or other withholding agent pays withholding taxes or backup withholding on behalf of a Holder or beneficial owner, the Company or other withholding agent may, at its option, set off any such payment against payments of cash and Common Stock payable on the Notes (or, in some circumstances, any payments on Common Stock), or sales proceeds received by or other funds or assets of such Holder or beneficial owner held with a withholding agent.
Section 12.11 Waiver of Jury Trial. EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.
Section 12.12 U.S.A. Patriot Act. 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 to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.
Section 12.13 Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, epidemics, pandemics, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
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Section 12.14 Legal Holidays. In any case where any Interest Payment Date, Fundamental Change Repurchase Date, Redemption Date, Conversion Date or Maturity Date is not a Business Day (which, solely for the purposes of any payment required to be made on any such Interest Payment Date, Fundamental Change Repurchase Date, Redemption Date, Conversion Date or Maturity Date and solely for purposes of this Section, shall also not include days in which the office where the place of payment in the continental United States is authorized or required by law to close), then such Interest Payment Date, Fundamental Change Repurchase Date, Redemption Date, Conversion Date or Maturity Date, as applicable, will not be postponed but any action (which shall be limited to solely any payment action in the case the immediately preceding parenthetical applies) to be taken on such date need not be taken on such date, but may be taken on the next succeeding Business Day with the same force and effect as if taken on such date, and no interest shall accrue or be paid in respect of the delay.
[Remainder of the page intentionally left blank]
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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.
| LUMENTUM HOLDINGS INC. | ||
| By: | /s/ Wajid Ali | |
| Name: | Wajid Ali | |
| Title: | Executive Vice President and Chief Financial Officer | |
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee | ||
| By: | /s/ David A. Jason | |
| Name: | David A. Jason | |
| Title: | Vice President | |
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SCHEDULE A
The following table sets forth the number of Additional Shares by which the Conversion Rate shall be increased pursuant to Section 4.06 based on the Stock Price and the Effective Date set forth below.
| Effective |
$53.49 | $60.00 | $65.00 | $69.54 | $80.00 | $90.40 | $100.00 | $125.00 | $150.00 | $200.00 | $300.00 | $400.00 | $500.00 | $600.00 | ||||||||||||||||||||||||||||||||||||||||||
| June 16, 2023 |
4.3142 | 3.5300 | 3.0591 | 2.7055 | 2.0841 | 1.6492 | 1.3533 | 0.8613 | 0.5856 | 0.3058 | 0.1033 | 0.0374 | 0.0104 | 0.0001 | ||||||||||||||||||||||||||||||||||||||||||
| December 15, 2023 |
4.3142 | 3.5300 | 3.0591 | 2.7055 | 2.0841 | 1.6405 | 1.3379 | 0.8399 | 0.5651 | 0.2910 | 0.0967 | 0.0346 | 0.0094 | 0.0000 | ||||||||||||||||||||||||||||||||||||||||||
| December 15, 2024 |
4.3142 | 3.5300 | 3.0591 | 2.7055 | 2.0513 | 1.5819 | 1.2701 | 0.7706 | 0.5054 | 0.2516 | 0.0806 | 0.0278 | 0.0070 | 0.0000 | ||||||||||||||||||||||||||||||||||||||||||
| December 15, 2025 |
4.3142 | 3.5300 | 3.0591 | 2.6451 | 1.9263 | 1.4473 | 1.1367 | 0.6576 | 0.4165 | 0.1990 | 0.0612 | 0.0198 | 0.0040 | 0.0000 | ||||||||||||||||||||||||||||||||||||||||||
| December 15, 2026 |
4.3142 | 3.5300 | 2.9138 | 2.4658 | 1.7214 | 1.2434 | 0.9446 | 0.5098 | 0.3086 | 0.1416 | 0.0426 | 0.0127 | 0.0015 | 0.0000 | ||||||||||||||||||||||||||||||||||||||||||
| December 15, 2027 |
4.3142 | 3.3213 | 2.6498 | 2.1731 | 1.4113 | 0.9524 | 0.6841 | 0.3314 | 0.1899 | 0.0858 | 0.0266 | 0.0070 | 0.0000 | 0.0000 | ||||||||||||||||||||||||||||||||||||||||||
| December 15, 2028 |
4.3142 | 2.9353 | 2.1732 | 1.6572 | 0.9068 | 0.5246 | 0.3360 | 0.1391 | 0.0788 | 0.0389 | 0.0130 | 0.0029 | 0.0000 | 0.0000 | ||||||||||||||||||||||||||||||||||||||||||
| December 15, 2029 |
4.3142 | 2.2858 | 1.0038 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | ||||||||||||||||||||||||||||||||||||||||||
EXHIBIT A
[FORM OF FACE OF NOTE]
[For Global Notes, include the following legend:]
[THIS SECURITY IS A GLOBAL NOTE 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.]
[For all Notes that are Restricted Notes, include the following legend (the “Restricted Notes Legend”):]
[NO AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY OR PERSON THAT HAS BEEN AN AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY DURING THE IMMEDIATELY PRECEDING THREE MONTHS MAY PURCHASE, OTHERWISE ACQUIRE OR HOLD THIS SECURITY OR A BENEFICIAL INTEREST HEREIN.
THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED BELOW), MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
(2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED BELOW), EXCEPT:
(A) TO LUMENTUM HOLDINGS INC. (THE “COMPANY”) OR ANY SUBSIDIARY THEREOF;
A-1
(B) PURSUANT TO, AND IN ACCORDANCE WITH, A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER;
(C) TO A PERSON THAT YOU REASONABLY BELIEVE TO BE A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT; OR
(D) UNDER ANY OTHER AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (INCLUDING, IF AVAILABLE, THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT).
THE “RESALE RESTRICTION TERMINATION DATE” MEANS THE LATEST OF: (1) THE DATE THAT IS ONE YEAR AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THIS SECURITY OR SUCH SHORTER PERIOD OF TIME PERMITTED BY RULE 144 OR ANY SUCCESSOR PROVISION THERETO; (2) THE DATE ON WHICH THE COMPANY HAS INSTRUCTED THE TRUSTEE THAT THE FOREGOING RESTRICTIONS WILL NO LONGER APPLY IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE AND (3) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW.
WITH RESPECT TO ANY TRANSFER PURSUANT TO THE FOREGOING CLAUSE (D), PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, THE COMPANY AND THE REGISTRAR RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE AND MAY RELY UPON TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.]
A-2
Lumentum Holdings Inc.
1.50% Convertible Senior Notes due 2029
| No.: | [ ] |
|||
| CUSIP: | [ ] | |||
| ISIN: | [ ] |
| Principal | ||||
| Amount: | $[ ] [For Global Notes, include the following: as revised by the Schedule of Increases and Decreases in the Global Note attached hereto], which amount, taken together with the principal amounts of all other outstanding Notes, shall not, unless permitted by the Indenture, exceed $[ ]. | |||
Lumentum Holdings Inc., a Delaware corporation (the “Company”), promises to pay to [ ] [include “Cede & Co.” for Global Note] or its registered assigns, the principal amount of [add principal amount in words] $[ ] on December 15, 2029 (the “Maturity Date”).
Interest Payment Dates: June 15 and December 15.
Regular Record Dates: June 1 and December 1.
Additional provisions of this Note are set forth on the other side of this Note.
A-3
IN WITNESS WHEREOF, Lumentum Holdings Inc. has caused this instrument to be signed manually or by facsimile by one of its duly authorized Officers.
| LUMENTUM HOLDINGS INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
This is one of the Notes of the series designated herein, referred to in the within-mentioned Indenture.
Dated:
| U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Trustee | ||
| By: | ||
| Authorized Signatory | ||
A-4
[FORM OF REVERSE OF NOTE]
Lumentum Holdings Inc.
1.50% Convertible Senior Notes due 2029
This Note is one of a duly authorized issue of securities of the Company (herein called the “Notes”), issued under the Indenture, dated as of June 16, 2023, by and between the Company and U.S. Bank Trust Company, National Association, as trustee herein called the “Trustee,” 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 Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. In the event of a conflict between the terms of the Indenture and this Note, the terms of the Indenture shall govern.
The Company will pay cash interest on the unpaid principal amount of this Note at a rate of 1.50% per year. Interest will accrue from the most recent date on which interest has been paid or duly provided for or, if no interest has been paid, from [ ][insert June 16, 2023 for Initial Notes]. Except as provided in the Indenture, interest will be paid to the Person in whose name this Note is registered at the Close of Business on the Regular Record Date immediately preceding the relevant Interest Payment Date semiannually in arrears on each Interest Payment Date; provided that, if any Interest Payment Date, Maturity Date, Redemption Date, or Fundamental Change Repurchase Date with respect to this Note falls on a day that is not a Business Day, the required payment will be made on the next succeeding Business Day and no interest on such payment will accrue in respect of the delay. Interest on the Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month. Except as provided in the Indenture, no interest shall be paid with respect to Notes surrendered for conversion.
As provided in and subject to the provisions of the Indenture, the Company may redeem this Note on or after June 22, 2026 under certain conditions specified in Article 11 of the Indenture. This Note does not benefit from a sinking fund.
As provided in and subject to the provisions of the Indenture, upon the occurrence of a Fundamental Change the Holder of this Note will have the right, at such Holder’s option, to require the Company to repurchase this Note, or any portion of this Note such that the principal amount of this Note that is not repurchased equals $1,000 or an integral multiple of $1,000 in excess thereof, on the Fundamental Change Repurchase Date at a price equal to the Fundamental Change Repurchase Price for such Fundamental Change Repurchase Date.
As provided in and subject to the provisions of the Indenture, the Holder hereof has the right, at its option (i) during certain periods and upon the occurrence of certain conditions specified in the Indenture, prior to the Close of Business on the Business Day immediately preceding September 15, 2029, and (ii) on or after September 15, 2029, at any time prior to the Close of Business on the second Scheduled Trading Day immediately preceding the Maturity Date, to convert this Note or a portion of this Note such that the principal amount of this Note that is not converted equals $1,000 or an integral multiple of $1,000 in excess thereof, into an amount of cash, a number of shares of Common Stock, or a combination of cash and shares of Common Stock, if any, as the case may be, determined in accordance with Article 4 of the Indenture.
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As provided in and subject to the provisions of the Indenture, the Company will make all payments in respect of the Fundamental Change Repurchase Price or Redemption Price for, and the principal amount of, this Note to the Holder that surrenders this Note to the Paying Agent to collect such payments in respect of this Note. The Company will pay cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes to be effected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Notes at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes at the time Outstanding, on behalf of the Holders of all Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past Defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note 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 Note.
As provided in and subject to the provisions of the Indenture, the Holder of this Note 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 Note, the Holders of not less than 25% in principal amount of the Notes 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 satisfactory thereto, and the Trustee shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity, and shall not have received from the Holders of a majority in principal amount of Notes at the time Outstanding a direction inconsistent with such request. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of the principal hereof, or interest hereon, the Fundamental Change Repurchase Price or Redemption Price, and the amount of cash, the number of shares of Common Stock or the combination thereof, as the case may be, due upon conversion of this Note or after the respective due dates expressed in the Indenture.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay or deliver, as the case may be, the principal of (including the Fundamental Change Repurchase Price or Redemption Price), interest on and the amount of cash, a number of shares of Common Stock or a combination of cash and shares of Common Stock, if any, as the case may be, due upon conversion of this Note at the time, place and rate, and in the coin and currency herein prescribed.
A-6
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Register, upon surrender of this Note for registration of transfer to the Trustee, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed by, the Holder hereof or its attorney duly authorized in writing, and thereupon a new Note of this series and of like tenor for the same aggregate principal amount will be issued to the designated transferee.
The Notes are issuable only in registered form without coupons in denominations of $1,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or Trustee may treat the Person in whose name the Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with rights of survivorship and not as tenants in common), CUST (= custodian) and U/G/M/A (= Uniform Gift to Minors Act).
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.
All defined terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. If any provision of this Note limits, qualifies or conflicts with a provision of the Indenture, such provision of the Indenture shall control.
A-7
ATTACHMENT 1
[FORM OF NOTICE OF CONVERSION]
| To: | Lumentum Holdings Inc. | |
| U.S. Bank Trust Company, National Association, | ||
| 1 California Street, Suite 1000, | ||
| San Francisco, CA 94111 | ||
| Attention: David A. Jason (Lumentum Holdings Convertible Senior Notes due 2029) | ||
The undersigned owner of this Note hereby irrevocably exercises the option to convert this Note, or a portion hereof (which is such that the principal amount of the portion of this Note that will not be converted equals $1,000 or an integral multiple of $1,000 in excess thereof) below designated, into an amount of cash, a number of shares of Common Stock or a combination of cash and shares of Common Stock, if any, as the case may be, in accordance with the terms of the Indenture referred to in this Note, and directs that any cash payable and any shares of Common Stock issuable and deliverable upon conversion, together with any Notes representing any unconverted principal amount hereof, be paid and/or issued and/or delivered, as the case may be, to the registered Holder hereof unless a different name is indicated below.
Subject to certain exceptions set forth in the Indenture, if this notice is being delivered after the Close of Business on a Regular Record Date and prior to the Open of Business on the Interest Payment Date corresponding to such Regular Record Date, this notice must be accompanied by payment of an amount equal to the interest payable on such Interest Payment Date on the principal amount of this Note to be converted. If any shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect to such issuance and transfer as set forth in the Indenture.
Principal amount to be converted (if less than all):
$
Dated:
| Signature(s) | ||
| (Sign exactly as your name appears on the other side of this Note) | ||
| Signature Guarantee | ||
| (Signature(s) must be guaranteed by an institution which is a member of one of the following recognized signature Guarantee Programs: | ||
| (i) The Notes Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP) or (iv) another guarantee program acceptable to the Trustee.) | ||
A-8
Fill in if a check is to be issued, or shares of Common Stock or Notes are to be registered, otherwise than to or in the name of the registered Holder.
(Name)
(Address)
Please print name and address
(including zip code)
(Social Security or other Taxpayer
Identifying Number)
Dated:
| Signature(s) | ||
| (Sign exactly as such Person’s name appears above) | ||
| Signature Guarantee | ||
| (Signature(s) must be guaranteed by an institution which is a member of one of the following recognized signature Guarantee Programs: | ||
| (i) The Notes Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP) or (iv) another guarantee program acceptable to the Trustee.) | ||
A-9
ATTACHMENT 2
[FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]
| To: | Lumentum Holdings Inc. | |
| U.S. Bank Trust Company, National Association, | ||
| 1 California Street, Suite 1000, | ||
| San Francisco, CA 94111 | ||
| Attention: David A. Jason (Lumentum Holdings Convertible Senior Notes due 2029) | ||
The undersigned registered owner of this Note hereby acknowledges receipt of a notice from Lumentum Holdings Inc. (the “Company”) as to the occurrence of a Fundamental Change with respect to the Company and specifying the Fundamental Change Repurchase Date and requests and instructs the Company to pay to the registered holder hereof in accordance with the applicable provisions of the Indenture referred to in this Note (i) the entire principal amount of this Note, or the portion thereof (that is such that the portion not to be repurchased has a principal amount equal to $1,000 or an integral multiple of $1,000 in excess thereof) below designated, and (ii) if such Fundamental Change Repurchase Date does not occur during the period after a Regular Record Date and on or prior to the Interest Payment Date corresponding to such Regular Record Date, accrued and unpaid interest, if any, thereon to, but excluding, such Fundamental Change Repurchase Date.
Principal amount to be repurchased (if less than all):
$
Certificate number (if Notes are in certificated form)
Dated:
| Signature(s) | ||
| (Sign exactly as your name appears on the other side of this Note) | ||
| Social Security or Other Taxpayer Identification Number | ||
A-10
ATTACHMENT 3
[FORM OF ASSIGNMENT AND TRANSFER]
For value received,
hereby sell(s), assign(s) and transfer(s) unto
(Please insert social security or Taxpayer Identification Number of assignee)
the within Note, and hereby irrevocably constitutes and appoints to transfer the said Note on the books of the Company, with full power of substitution in the premises.
In connection with any transfer of the within Note occurring prior to the Resale Restriction Termination Date, as defined in the Indenture governing such Note, the undersigned confirms that such Note is being transferred:
| ☐ | To Lumentum Holdings Inc. or a subsidiary thereof; or |
| ☐ | Pursuant to a registration statement which has become effective under the Securities Act of 1933, as amended; or |
| ☐ | To a qualified institutional buyer in compliance with Rule 144A under the Securities Act of 1933, as amended; or |
| ☐ | Pursuant to an exemption from registration provided by Rule 144 under the Securities Act of 1933, as amended, or any other available exemption from the registration requirements of the Securities Act of 1933, as amended. |
TO BE COMPLETED BY PURCHASER IF THE THIRD BOX ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Date: ______________________ Signed:
A-11
Unless one of the above boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof, provided that if the fourth box is checked, the Company or the Trustee may require, prior to registering any such transfer of the Notes, in its sole discretion, such legal opinions, certifications and other information as the Company or the Trustee may reasonably request to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.11 of the Indenture shall have been satisfied.
| Dated: | ||
| Signature(s) |
||
| (Sign exactly as your name appears on the other side of this Note) | ||
| Signature Guarantee | ||
(Signature(s) must be guaranteed by an institution which is a member of one of the following recognized signature Guarantee Programs: (i) The Notes Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP) or (iv) another guarantee program acceptable to the Trustee)
A-12
ATTACHMENT 4
[Insert for Global Note]
SCHEDULE OF INCREASES AND DECREASES IN THE GLOBAL NOTE
Initial Principal Amount of Global Note: [ ]
| Date |
Amount of Increase in Principal Amount of Global Note |
Amount of Decrease in Principal Amount of Global Note |
Principal Amount of Global Note After Increase or Decrease |
Notation by Registrar, Note Custodian or authorized signatory of Trustee |
A-13
EXHIBIT B
[FORM OF FREE TRANSFERABILITY CERTIFICATE]
Officer’s Certificate
[NAME OF OFFICER], the [TITLE] of Lumentum Holdings Inc., a Delaware corporation (the “Company”), does hereby certify, in connection with the sale of $603,750,000 aggregate principal amount of the Company’s 1.50% Convertible Senior Notes due 2029 (the “Notes”) pursuant to the terms of the Indenture, dated as of June 16, 2023 (as may be amended or supplemented from time to time, the “Indenture”), by and among the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), that:
1. The undersigned is permitted to sign this “Officer’s Certificate” on behalf of the Company, as the term “Officer’s Certificate” is defined in the Indenture.
2. The undersigned has read the Indenture and the definitions therein relating thereto.
3. In the opinion of the undersigned, the undersigned has made such examination as is necessary to enable the undersigned to express an informed opinion as to whether or not all conditions precedent to the delivery of this certificate provided for in the Indenture have been complied with.
4. To the best knowledge of the undersigned, all conditions precedent described herein as provided for in the Indenture have been complied with.
In accordance with Section 2.08 of the Indenture, the Company hereby instructs the Trustee as follows:
1. To take those actions necessary so that the Restricted Notes Legend and set forth on the Restricted Global Notes shall be deemed removed from such Global Notes in accordance with the terms and conditions of the Notes and as provided in the Indenture, without further action on the part of the Holders.
2. To take those actions necessary so that the restricted CUSIP number for the Restricted Global Notes shall be removed from such Global Notes and replaced with an unrestricted CUSIP number, which unrestricted CUSIP number shall be 55024U AH2, in accordance with the terms and conditions of the Restricted Global Notes and as provided in the Indenture, without further action on the part of the Holders.
[Signature page follows.]
B-1
IN WITNESS WHEREOF, we have signed this certificate as of [_________________].
| LUMENTUM HOLDINGS INC. | ||
| By: |
||
| Name: |
||
| Title: |
||
B-2
EXHIBIT C
[FORM OF RESTRICTED STOCK LEGEND]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED BELOW), MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
(2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED BELOW), EXCEPT:
(A) TO LUMENTUM HOLDINGS INC. (THE “COMPANY”) OR ANY SUBSIDIARY THEREOF;
(B) PURSUANT TO, AND IN ACCORDANCE WITH, A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER;
(C) TO A PERSON THAT YOU REASONABLY BELIEVE TO BE A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT; OR
(D) UNDER ANY OTHER AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (INCLUDING, IF AVAILABLE, THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT).
THE “RESALE RESTRICTION TERMINATION DATE” MEANS THE LATEST OF: (1) THE DATE THAT IS ONE YEAR AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THE COMPANY’S 1.50% CONVERTIBLE SENIOR NOTES DUE 2029 (THE “NOTES”) OR SUCH SHORTER PERIOD OF TIME PERMITTED BY RULE 144 OR ANY SUCCESSOR PROVISION THERETO; (2) THE DATE ON WHICH THE COMPANY HAS INSTRUCTED THE TRUSTEE FOR THE NOTES THAT THE SUBSTANTIALLY SIMILAR RESTRICTIONS APPLICABLE TO THE NOTES WILL NO LONGER APPLY IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE GOVERNING THE NOTES AND (3) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW.
C-1
WITH RESPECT TO ANY TRANSFER PURSUANT TO THE FOREGOING CLAUSE (D), PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, THE COMPANY AND THE COMPANY’S TRANSFER AGENT RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE AND MAY RELY UPON TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
C-2
Exhibit 10.1
Execution Version
Lumentum Holdings Inc.
1.50% Convertible Senior Notes due 2029
Purchase Agreement
June 13, 2023
Goldman Sachs & Co. LLC,
200 West Street,
New York, New York 10282-2198
Ladies and Gentlemen:
Lumentum Holdings Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions set forth in this agreement (this “Agreement”), to issue and sell to Goldman Sachs & Co. LLC and Deutsche Bank Securities Inc. (the “Purchasers”), an aggregate of $525,000,000 principal amount of the 1.50% Convertible Senior Notes due 2029 (the “Firm Securities”), and, at the election of the Purchasers, up to an aggregate of $78,750,000 additional aggregate principal amount of such 1.50% Convertible Senior Notes due 2029 (the “Optional Securities”). The Firm Securities and any Optional Securities that the Purchasers elect to purchase pursuant to Section 2 hereof are herein collectively called the “Securities”. Goldman Sachs & Co. LLC has agreed to act as representative of the several Purchasers (in such capacity, the “Representative”) in connection with the offering and sale of the Securities. The Securities will be convertible at the Company’s election into cash, shares of common stock of the Company, par value $0.001 per share (“Stock”), or a combination of cash and Stock.
| 1. | The Company represents and warrants to, and agrees with, the Purchasers that: |
(a) A preliminary offering circular, dated June 12, 2023 (the “Preliminary Offering Circular”) and an offering circular, dated June 13, 2023 (the “Offering Circular”), have been prepared in connection with the offering of the Securities and the Stock, if any, issuable upon conversion thereof. The Preliminary Offering Circular, as amended and supplemented immediately prior to the Applicable Time (as defined in Section 1(b)), is hereinafter referred to as the “Pricing Circular”. Any reference to the Preliminary Offering Circular, the Pricing Circular or the Offering Circular shall be deemed to refer to and include all documents filed with the United States Securities and Exchange Commission (the “Commission”) pursuant to Section 13(a), 13(c) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or prior to the date of such circular and incorporated by reference therein and any reference to the Preliminary Offering Circular or the Offering Circular, as the case may be, as amended or supplemented, as of any specified date, shall be deemed to include (i) any documents filed with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act after the date of the Preliminary Offering Circular or the Offering Circular, as the case may be, and prior to such specified date and (ii) any Additional Issuer Information (as defined in Section 5(f)) furnished by the Company prior to the completion of the distribution of the Securities; and all
documents filed under the Exchange Act and so deemed to be included in the Preliminary Offering Circular, the Pricing Circular or the Offering Circular, as the case may be, or any amendment or supplement thereto are hereinafter called the “Exchange Act Reports” (provided that where only sections of such documents are specifically incorporated by reference, only such sections shall be considered to be part of the “Exchange Act Reports”). The Exchange Act Reports, when they were or are filed with the Commission, conformed or will conform in all material respects to the applicable requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder; and no such documents were filed with the Commission since the Commission’s close of business on the business day immediately prior to the date of this Agreement and prior to the execution of this Agreement, except as set forth on Schedule II(a) hereof. The Preliminary Offering Circular or the Offering Circular and any amendments or supplements thereto did not and will not, as of their respective dates, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by the Purchasers expressly for use therein;
(b) For the purposes of this Agreement, the “Applicable Time” is 6:00 p.m. (Eastern time) on the date of this Agreement; the Pricing Circular as supplemented by the information set forth in Schedule III hereto, taken together (collectively, the “Pricing Disclosure Package”) as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Company Supplemental Disclosure Document (as defined in Section 6(a)(i)) listed on Schedule II(b) hereto and each Permitted General Solicitation Material (as defined in Section 6(a)(i)) listed on Schedule II(d) hereto does not conflict with the information contained in the Pricing Circular or the Offering Circular and each such Company Supplemental Disclosure Document and Permitted General Solicitation Material, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions made in the Pricing Disclosure Package or in a Company Supplemental Disclosure Document or Permitted General Solicitation Material in reliance upon and in conformity with information furnished in writing to the Company by the Purchasers expressly for use therein;
(c) Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in the Pricing Circular any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Circular; and, since the respective dates as of which information is given or incorporated by reference in the Pricing Circular, there has not been any change in the capital stock (other than as a result of (x) the exercise of stock options, the vesting of restricted stock or restricted stock units or the granting of stock options, restricted stock or restricted stock units in the ordinary course of business pursuant to the Company’s stock plans that are described in the Pricing Circular, (y) the repurchase of Stock which were issued pursuant to the early exercise of stock
2
options by option holders or restricted stock awards issued pursuant to the Company’s stock plans that are described in the Pricing Circular or (z) the issuance of Stock upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date of this Agreement and described in the Pricing Circular) or long-term debt of the Company or any of its subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole (a “Material Adverse Effect”), other than, in each case, as set forth or contemplated in the Pricing Circular;
(d) The Company and its subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them, in each case free and clear of all liens, encumbrances and defects except such as are described in the Pricing Circular or such as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries; and any real property and buildings held under lease by the Company and its subsidiaries are held by them under valid, subsisting and, to the Company’s knowledge, enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries;
(e) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, with the corporate power and authority to own its properties and conduct its business as described in the Pricing Disclosure Package and the Offering Circular, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except where the failure to be so qualified or be in good standing in any such jurisdiction would not, individually or in the aggregate, have a Material Adverse Effect. Each subsidiary of the Company has been duly incorporated or formed and is validly existing as an entity in good standing under the laws of its applicable jurisdiction of incorporation or formation (to the extent such concept of “good standing” is applicable under the laws of such jurisdiction), with power and authority (corporate and other) to own its properties and conduct its business as described in the Pricing Disclosure Package and the Offering Circular, and has been duly qualified for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, except where the failure to be so qualified or be in good standing in any such jurisdiction would not, individually or in the aggregate, have a Material Adverse Effect.
(f) The Company has an authorized capitalization as set forth in the Pricing Disclosure Package and the Offering Circular, and all of the issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable; any shares of Stock initially issuable upon conversion of the Securities (assuming physical settlement of all conversions) have been duly authorized and reserved for issuance upon conversion of the Securities and, when issued and delivered in accordance with the provisions of the Securities and the Indenture referred to below, will be validly issued, fully paid and non-assessable and will conform in all material respects to the description of the Stock contained in the Pricing Disclosure Package and the Offering Circular; and all of the issued and outstanding shares of capital stock of each subsidiary of the Company have been
3
duly authorized and validly issued, are fully paid and non-assessable and (except as otherwise set forth in the Pricing Disclosure Package and the Offering Circular) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims;
(g) The Securities have been duly authorized by the Company and, when executed, issued and delivered in accordance with the terms of the indenture to be dated as of June 16, 2023 (the “Indenture”) between the Company and U.S. Bank Trust Company, National Association, as Trustee (the “Trustee”), under which they are to be issued, and delivered and paid for pursuant to this Agreement, will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is considered in a proceeding in equity or at law) (“Enforceability Exceptions”). The Indenture has been duly authorized by the Company and, when executed and delivered by the Company and the Trustee, the Indenture will constitute a valid and legally binding instrument, enforceable against the Company in accordance with its terms, subject to the Enforceability Exceptions, and entitled to the benefits provided by the Indenture; and the Securities and the Indenture will conform in all material respects to the descriptions thereof in the Pricing Disclosure Package and the Offering Circular;
(h) The Company has all requisite corporate power to execute, deliver and perform its obligations under this Agreement. This Agreement has been duly authorized, executed and delivered by the Company.
(i) Prior to the date hereof, the Company has not and to its knowledge, none of its affiliates acting on its behalf, has taken any action which is designed to or which has constituted or which would reasonably have been expected to cause or result in stabilization or manipulation of the price of any security of the Company in connection with the offering of the Securities;
(j) The issue and sale of the Securities and the compliance by the Company with all of the provisions of the Securities, the Indenture and this Agreement (including the issuance of any shares of Stock upon conversion of the Securities) and the consummation of the transactions herein and therein contemplated will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) result in any violation of the provisions of the Certificate of Incorporation or By-laws of the Company or (iii) result in any violation of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties, except, with respect to clauses (i) and (iii), for such conflicts, breaches, violations or defaults as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities or the consummation by the Company of the transactions contemplated by this Agreement or the Indenture (including the issuance of any shares of Stock upon conversion of the Securities), except for such consents, approvals, authorizations, orders, registrations or qualifications as have already been obtained or made
4
or may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Purchasers or for the listing of the Stock underlying the Securities on the NASDAQ Global Market (“NASDAQ”);
(k) Neither the Company nor any of its subsidiaries is (i) in violation of its Certificate of Incorporation or By-laws or equivalent organizational document, (ii) in default in the performance or observance of any obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except, in the case of clause (ii), for such defaults as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(l) The statements set forth in the Pricing Circular and the Offering Circular under the captions “Description of Notes” and “Description of Common Stock”, insofar as they purport to constitute a summary of the terms of the Securities and the Stock, and under the caption “Plan of Distribution”, insofar as they purport to describe the provisions of the laws and documents referred to therein, fairly summarize such laws and documents in all material respects;
(m) Other than as set forth in the Pricing Disclosure Package and the Offering Circular, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect; and, to the Company’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others;
(n) When the Securities are issued and delivered pursuant to this Agreement, the Securities will not be of the same class (within the meaning of Rule 144A under the Securities Act of 1933, as amended (the “Act”)) as securities which are listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system;
(o) The Company is subject to Section 13 or 15(d) of the Exchange Act;
(p) The Company is not, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Pricing Disclosure Package, will not be, required to register as an “investment company”, as such term is defined in the United States Investment Company Act of 1940, as amended (the “Investment Company Act”);
(q) Neither the Company nor any person acting on its behalf (other than the Purchasers, as to which no representation is made) has offered or sold the Securities by means of any general solicitation or general advertising within the meaning of Rule 502(c) under the Act (other than by means of a Permitted General Solicitation, as defined below);
(r) Within the preceding six months, neither the Company nor any other person acting on behalf of the Company has offered or sold to any person any Securities, or any securities of the same or a similar class as the Securities, other than Securities offered or sold to the Purchasers hereunder. The Company will take reasonable precautions designed to insure that any offer or sale, direct or indirect, in the United States of any Securities or any substantially similar security issued by the Company, within six months subsequent to the date on which the distribution of the Securities has been completed (as notified to the Company by the Purchasers), is made under restrictions and other circumstances reasonably designed not to affect the status of the offer and sale of the Securities in the United States contemplated by this Agreement as transactions exempt from the registration provisions of the Act;
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(s) The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with United States generally accepted accounting principles. The Company’s internal control over financial reporting is effective and the Company is not aware of any material weaknesses in its internal control over financial reporting;
(t) Since the date of the latest audited financial statements incorporated by reference in the Pricing Circular, there has been no change in the Company’s internal control over financial reporting that has materially and adversely affected, or is reasonably likely to materially and adversely affect, the Company’s internal control over financial reporting;
(u) The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of the Exchange Act) that have been designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure; and such disclosure controls and procedures are effective;
(v) [Reserved];
(w) Deloitte & Touche LLP, which has reviewed certain financial statements of the Company and its subsidiaries, is an independent registered public accounting firm as required by the Act and the rules and regulations of the Commission thereunder;
| (x) | Neither the Company, nor any of its subsidiaries nor any director, officer, nor, to the knowledge of the Company, any agent, employee, representative or affiliate or third party acting on behalf of the Company or any of its subsidiaries has (i) made any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; (iv) violated or is in violation of any provision of the Bribery Act 2010 of the United Kingdom; or (v) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment; |
| (y) | The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with the requirements of applicable anti-money laundering laws, including, but not limited to, the Bank Secrecy Act of 1970, as amended by the USA PATRIOT ACT of 2001, and the rules and regulations promulgated thereunder, and the anti-money laundering laws of the various jurisdictions in which the Company and its subsidiaries conduct business (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened; |
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| (z) | None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently the subject or the target of any sanctions administered or enforced by the U.S. Government, including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury, or other relevant sanctions authority (collectively, “Sanctions”), and the Company will not directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity (i) to fund or facilitate any activities of or business with any person, or in any country or territory, that, at the time of such funding, is the subject or the target of Sanctions or (ii) in any other manner that will result in a violation by any person (including any person participating in the transaction, whether as purchaser, advisor, investor or otherwise) of Sanctions; |
| (aa) | Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or other person acting on behalf of the Company or any of its subsidiaries (in connection with the Company or its subsidiaries) has violated applicable export control laws and regulations, except for such violations as would not reasonably be expected to have a Material Adverse Effect, including without limitation the Arms Export Control Act, the International Traffic in Arms Regulations, the U.S. Export Administration Act of 1979, as amended, the U.S. International Emergency Economic Powers Act, and the Export Administration Regulations, and there are no claims, complaints, charges, investigations or proceedings pending or expected or, to the knowledge of the Company, threatened between the Company or any of its subsidiaries and any governmental authority under any applicable export control laws and regulations. Each of the Company and its subsidiaries have obtained all of the specific authorizations required by the U.S. Department of State’s Directorate of Defense Trade Controls and the U.S. Department of Commerce’s Bureau of Industry and Security, as applicable, to authorize the provision of services and technical data to non-U.S. persons or the export, re-export, or transfer of commodities, software, or technical data, except where the absence of such authorizations would not reasonably be expected to have a Material Adverse Effect; |
| (bb) | The Company owns, possesses, or licenses, or can acquire or license on commercially reasonable terms, all Intellectual Property Rights necessary for the conduct of the Company’s business as now conducted or as described in the Pricing Disclosure Package and the Offering Circular to be conducted, except where the failure to own, possess or license any of the foregoing would not reasonably be expected to have a Material Adverse Effect. Except as set forth in the Pricing Disclosure Package and the Offering Circular or would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (A) to the knowledge of the Company, there is no infringement, misappropriation or violation by third parties of any such Intellectual Property Rights; (B) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others challenging the Company’s rights in or to any such Intellectual Property Rights, and, to the knowledge of the Company, there are no facts which would form a reasonable basis for any such claim; (C) the Intellectual Property Rights owned by the Company and, to the knowledge of the Company, the Intellectual Property Rights licensed to the Company have not been adjudged invalid or unenforceable, in whole or in part, and there is no pending or, to the Company’s knowledge, |
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| threatened action, suit, proceeding or claim by others challenging the validity or scope of any such Intellectual Property Rights; and (D) there is no pending or, to the knowledge of the Company, threatened action, suit, proceeding or claim by others that the Company infringes, misappropriates or otherwise violates any Intellectual Property Rights or other proprietary rights of others, and the Company has not received any written notice of such claim, and, to the knowledge of the Company, there are no facts which would form a reasonable basis for any such claim. “Intellectual Property Rights” shall mean all patents, patent applications, trade and service marks, trade and service mark registrations and applications, rights in trade names, copyrights, trade secret rights, and similar proprietary rights in technology and know-how; |
| (cc) | No material labor problem or dispute with the employees of the Company or any of its subsidiaries exists or, to the Company’s knowledge, is threatened or imminent, and the Company is not aware of any existing labor disturbance by the employees of any of its or its subsidiaries’ principal suppliers, contractors or customers, that could be reasonably expected to have a Material Adverse Effect, whether or not arising from transactions in the ordinary course of business; |
| (dd) | Except as disclosed in the Pricing Disclosure Package and the Offering Circular, to the knowledge of the Company, neither the Company nor any of its subsidiaries is in violation of any statute, any rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “environmental laws”), owns or operates any real property contaminated with any substance that is subject to any environmental laws, is liable for any off-site disposal or contamination pursuant to any environmental laws, or is subject to any claim relating to any environmental laws, except where such violation of environmental law, contamination of real property by a substance subject to any environmental law, liability for off-site disposal or contamination or claim relating to any environmental laws would not, individually or in the aggregate, have a Material Adverse Effect, and, except as disclosed in the Pricing Disclosure Package, the Company is not aware of any pending investigation which might lead to such a claim; |
| (ee) | The Company has filed all necessary U.S. federal, state and foreign income, property and franchise tax returns or have requested extensions thereof (except where the failure to file would not, individually or in the aggregate, have a Material Adverse Effect) and has paid all taxes shown as due and payable by such returns and, if due and payable, any related or similar assessment, fine or penalty levied against the Company, except for cases in which the failure to file or pay such taxes, assessments, fines or penalties would not, individually or in the aggregate, have a Material Adverse Effect or except as may be being contested in good faith and by appropriate proceedings. The Company has made adequate charges, accruals and reserves in the applicable financial statements in respect of all federal, state and foreign income, property and franchise taxes for all periods as to which the tax liability of the Company has not been finally determined; and |
| (ff) | The Company carries, or is covered by, insurance in such amounts and covering such risks as is customary for companies of a similar size and scope engaged in similar businesses in similar industries. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from other insurers as may be necessary to continue its business. All policies of insurance |
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| owned by the Company are, to the Company’s knowledge, in full force and effect and the Company is in compliance in all material respects with the terms of such policies. The Company has not received written notice from any insurer, agent of such insurer or the broker of the Company that any material capital improvements or any other material expenditures (other than premium payments) are required or necessary to be made in order to continue such insurance. |
| (gg) | Except as would not reasonably be expected to have a Material Adverse Effect, (i) the Company’s information technology assets and equipment, computers, systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) operate and perform as required in connection with the operation of the business of the Company as currently conducted, free and clear of all bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants and (ii) the Company has implemented and maintained commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards designed to maintain and protect their confidential information and the integrity, operation, redundancy and security of all IT Systems and confidential data, including “Personal Data,” used in connection with its business. “Personal Data” means (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social security number or tax identification number, driver’s license number, passport number, credit card number, bank information, or customer or account number; (ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended; (iii) “personal data” as defined by GDPR, as applicable (iv) any information which would qualify as “protected health information” under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”), as applicable; and (v) any other piece of information that allows the identification of such natural person, or his or her family, is related to an identified person’s health or sexual orientation. Except as would not reasonably be expected to have a Material Adverse Effect, (i) there have been no breaches, violations, outages or unauthorized uses of or accesses to such IT Systems or confidential data, including Personal Data, except for those that have been remedied without cost or liability or the duty to notify any other person; and (ii) the Company is presently in compliance with all applicable laws or statutes and all applicable judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, and all of the Company’s internal policies and contractual obligations relating to the privacy and security of such IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation or modification. |
| (hh) | Except as would not reasonably be expected to have a Material Adverse Effect, (i) the Company is, and at all prior times was, in compliance with all applicable state and federal data privacy and security laws and regulations, including without limitation HIPAA, and the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679), in each case as applicable (collectively, the “Privacy Laws”); (ii) the Company has at all times made all disclosures to users or customers required by applicable Privacy Laws; and (iii) none of such disclosures made or contained in any public-facing privacy policy or notice of the Company have, to the knowledge of the Company, been inaccurate or in violation of any applicable Privacy Laws. To ensure compliance with the Privacy Laws, the Company has in place, complies with, and takes appropriate steps reasonably designed to ensure compliance with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling, and analysis of Personal Data. The Company has not received |
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| written notice of any actual or threatened claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any court or arbitrator or governmental or regulatory authority (or, except as would not reasonably be expected to result in a Material Adverse Effect, any other third party) alleging that any activity of the Company is in violation of applicable Privacy Laws. |
| 2. | Subject to the terms and conditions herein set forth, (a) the Company agrees to issue and sell to the Purchasers, and each of the Purchasers agrees, severally and not jointly, to purchase from the Company, at a purchase price of 99.20% of the principal amount thereof, plus accrued interest from June 16, 2023 to the applicable Time of Delivery hereunder, if any, the aggregate principal amount of Securities set forth opposite the name of the Purchasers in Schedule I hereto, and (b) in the event and to the extent that the Purchasers shall exercise the election to purchase Optional Securities as provided below, the Company agrees to issue and sell to the Purchasers, and the Purchasers agree to purchase from the Company, at the same purchase price set forth in clause (a) of this Section 2, plus accrued and unpaid interest from June 16, 2023 to the applicable Time of Delivery hereunder, if any, the aggregate principal amount of the Optional Securities as to which such election shall have been exercised. |
The Company hereby grants to the Purchasers the right to purchase at its election up to $78,750,000 in aggregate principal amount of the Optional Securities at the purchase price (plus accrued and unpaid interest, if any) set forth in clause (b) of the first paragraph of this Section 2. Any such election to purchase Optional Securities may be exercised only by written notice from the Representative to the Company, setting forth the aggregate principal amount of Optional Securities to be purchased and the date on which such Optional Securities are to be delivered, as determined by the Representative but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless the Representative and the Company otherwise agree in writing, earlier than one or later than five New York Business Days after the date of such notice, provided that any Subsequent Time of Delivery (as defined below) for Optional Securities shall be within a period of 13 calendar days from, and including, the First Time of Delivery (the “Exercise Period”). “New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close.
| 3. | Upon the authorization by the Purchasers of the release of the Securities, the Purchasers propose to offer the Securities for sale upon the terms and conditions set forth in this Agreement and the Offering Circular and each Purchaser, acting severally and not jointly, hereby represents and warrants to, and agrees with the Company that: |
| (a) | it will sell the Securities only to persons whom it reasonably believes are “qualified institutional buyers” (“QIBs”) within the meaning of Rule 144A under the Act in transactions meeting the requirements of Rule 144A; |
| (b) | it is a QIB within the meaning of Rule 144A under the Act; and |
| (c) | Other than with the prior consent of the Company and the Purchasers, or as otherwise permitted pursuant to Section 6(a)(ii) hereof, neither of the Purchasers nor any of their affiliates or any other person acting on its or their behalf will solicit offers for, or offer or sell, the Securities by any form of general solicitation or general advertising, including but not limited to the methods described in Rule 502(c) under the Act or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Act. |
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| 4. (a) | The Securities to be purchased by the Purchasers hereunder will be represented by one or more definitive global Securities in book-entry form which will be deposited by or on behalf of the Company with The Depository Trust Company (“DTC”) or its designated custodian. The Company will deliver the Securities to the Representative, for the accounts of the Purchasers, against payment by or on behalf of the Purchasers of the purchase price therefor (plus accrued and unpaid interest, if any) by wire transfer in Federal (same day) funds, by causing DTC to credit the Securities to the account of the Representative at DTC. The Company will cause the certificates representing the Securities to be made available to the Purchasers for checking at least twenty-four hours prior to the applicable Time of Delivery (as defined below) at the office of Latham & Watkins LLP: 1271 Avenue of the Americas, New York, New York 10020 (the “Closing Location”). The time and date of such delivery and payment shall be, with respect to the Firm Securities, 9:30 a.m., New York City time, on June 16, 2023 or such other time and date as the Representative and the Company may agree upon in writing, and, with respect to the Optional Securities, 9:30 a.m., New York City time, on the date specified by the Representative in the written notice given by the Representative of the Purchasers’ election to purchase such Optional Securities, or such other time and dates as the Representative and the Company may agree upon in writing, provided, however, that such delivery date shall be within the Exercise Period, must be at least one New York Business Day after such written notice is given and may not be earlier than the First Time of Delivery (as defined below) nor later than five New York Business Days after the date of such notice; provided further, that solely with respect to an Optional Securities written notice that is delivered prior to the First Time of Delivery, the related Time of Delivery (as defined below) must be at least one New York Business Day after the written notice is given. Such time and date for delivery of the Firm Securities is herein called the “First Time of Delivery,” any such time and date for delivery of the Optional Securities, if not the First Time of Delivery, is herein called a “Subsequent Time of Delivery,” and each such time and date for delivery is herein called a “Time of Delivery.” |
(b) The documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to Section 8 hereof, including the cross-receipt for the Securities and any additional documents requested by the Purchasers pursuant to Section 8(k) hereof, will be delivered at such time and date at the Closing Location, and the Securities will be delivered at the office of DTC (or its designated custodian), all at such Time of Delivery. A meeting will be held at the Closing Location at 4:00 p.m., New York City time, on the New York Business Day next preceding such Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto.
| 5. | The Company agrees with the Purchasers: |
(a) To prepare the Offering Circular in a form approved by the Purchasers; to make no amendment or any supplement to the Offering Circular which shall be disapproved by the Purchasers promptly after reasonable notice thereof; and to furnish the Purchasers with copies thereof;
(b) Promptly from time to time to take such action as the Purchasers may reasonably request to qualify the Securities and the Stock issuable upon conversion of the Securities for offering and sale under the securities laws of such jurisdictions as the Purchasers may reasonably
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request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Securities, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction or subject itself to taxation in such jurisdiction in which it was not otherwise subject to taxation as a foreign corporation;
(c) To furnish the Purchasers with written and electronic copies of the Offering Circular and any amendment or supplement thereto in such quantities as the Purchasers may from time to time reasonably request, and if, at any time prior to the completion of the distribution of the Securities, any event shall have occurred as a result of which the Offering Circular as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Offering Circular is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Offering Circular, to notify the Purchasers and upon the request of the Purchasers to prepare and furnish without charge to the Purchasers and to any dealer in securities (whose name and address the Purchasers shall furnish to the Company) as many written and electronic copies as the Purchasers may from time to time reasonably request of an amended Offering Circular or a supplement to the Offering Circular which will correct such statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing until the date that is 60 days after the date of the Offering Circular, without the prior written consent of the Representative, not to (i) offer, issue, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive, Stock or any such substantially similar securities, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Stock or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Stock or such other securities, in cash or otherwise, or (iii) file with the Commission a registration statement under the Act relating to any securities of the Company that are substantially similar to the Securities or the Stock; provided that the foregoing restrictions shall not apply to (1) the Securities to be sold hereunder and the issuance of any Stock upon the conversion of the Securities, (2) the issuance by the Company of Stock upon the exercise of an option or warrant, the settlement of restricted stock or restricted stock units or the conversion of a security outstanding on the date hereof, provided that such option, warrant, restricted stock restricted stock unit, or security is identified in the Pricing Circular, (3) the issuance by the Company (or the receipt by any officer or director) of Stock or other securities convertible into or exercisable or exchangeable for, or that represent the right to receive, Stock pursuant to the Company’s stock option plans existing on the date of this Agreement, (4) the filing of any registration statement on Form S-8 relating to securities granted or to be granted pursuant to the Company’s stock option plans existing on the date of this Agreement or any assumed employee benefit plan contemplated by clause 5, (5) the entry into an agreement providing for the issuance by the Company of Stock or any security convertible into or exercisable for, or that represents the right to receive, Stock in connection with the acquisition by the Company or any of its subsidiaries of the securities, business, technology, property or other assets of another person or entity or pursuant to an
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employee benefit plan assumed by the Company in connection with such acquisition, and the issuance of any such securities pursuant to any such agreement, (6) the entry into an agreement providing for the issuance of Stock or any security convertible into or exercisable for, or that represents the right to receive, Stock in connection with joint ventures, commercial relationships or other strategic transactions, and the issuance of any such securities pursuant to any such agreement; provided that in the case of clauses (5) and (6), the aggregate number of Stock that the Company may sell or issue or agree to sell or issue pursuant to clauses (5) and (6) shall not exceed 10% of the total number of Stock issued and outstanding immediately following the completion of the transactions contemplated by this Agreement; provided, further, that in the case of clauses (5) and (6), any such securities issued pursuant thereto shall be subject to transfer restrictions substantially similar to those contained in the lock-up agreements signed by the Company’s executive officers and directors, and the Company shall enter stop transfer instructions with the Company’s transfer agent and registrar on such securities, which the Company agrees it will not waive or amend without the prior written consent of the Representative;
(e) Not to be or become, at any time prior to the expiration of two years after the First Time of Delivery, an open-end investment company, unit investment trust, closed-end investment company or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act, for the benefit of holders from time to time of Securities, to furnish at its expense, upon request, to holders of Securities and prospective purchasers of Securities information (the “Additional Issuer Information”) satisfying the requirements of subsection (d)(4)(i) of Rule 144A under the Act, unless at such time the Securities are “freely tradable” as defined in the “Description of the Notes” section of the Offering Circular;
(g) Except for such documents that are publicly available on EDGAR, to furnish to the holders of the Securities as soon as practicable after the end of each fiscal year an annual report (including a balance sheet and statements of income, stockholders’ equity and cash flows of the Company and its consolidated subsidiaries certified by independent public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter ending after the date of the Offering Circular), to make available to its stockholders consolidated summary financial information of the Company and its subsidiaries for such quarter in reasonable detail;
(h) During the period of one year after the Time of Delivery, the Company will not, and will not permit any of its controlled “affiliates” (as defined in Rule 144 under the Act) to, resell any of the Securities which constitute “restricted securities” under Rule 144 that have been reacquired by any of them (other than pursuant to a registration statement that has been declared effective under the Act);
(i) To use the net proceeds received by the Company from the sale of the Securities pursuant to this Agreement in the manner specified in the Pricing Circular under the caption “Use of Proceeds”;
(j) To reserve and keep available at all times, free of preemptive rights, Stock for the purpose of enabling the Company to satisfy any obligations to issue Stock upon conversion of the Securities; and
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(k) To use its reasonable best efforts to list, subject to notice of issuance, the Stock issuable upon conversion of the Securities on the NASDAQ.
| 6. |
| (a) | (i) The Company represents and agrees that, without the prior consent of the Purchasers, it and its affiliates and any other person acting on its or their behalf (other than the Purchasers, as to which no statement is given) (x) have not made and will not make any offer relating to the Securities that, if the offering of the Securities contemplated by this Agreement were conducted as a public offering pursuant to a registration statement filed under the Act with the Commission, would constitute an “issuer free writing prospectus,” as defined in Rule 433 under the Act (any such offer is hereinafter referred to as a “Company Supplemental Disclosure Document”) other than as listed on Schedule II(b) and (y) have not solicited and will not solicit offers for, and have not offered or sold and will not offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D other than any such solicitation listed on Schedule II(d) (each such solicitation, a “Permitted General Solicitation”; each written general solicitation document listed on Schedule II(d), a “Permitted General Solicitation Material”); |
(ii) each Purchaser, severally and not jointly, represents and agrees that, without the prior consent of the Company, other than one or more term sheets relating to the Securities containing customary information and conveyed to purchasers of securities or any Permitted General Solicitation Material, it has not made and will not make any offer relating to the Securities that, if the offering of the Securities contemplated by this Agreement were conducted as a public offering pursuant to a registration statement filed under the Act with the Commission, would constitute a “free writing prospectus,” as defined in Rule 405 under the Act (any such offer (other than any such term sheets and any Permitted General Solicitation Material), is hereinafter referred to as a “Purchasers Supplemental Disclosure Document”); and
(iii) any Company Supplemental Disclosure Document, Purchasers Supplemental Disclosure Document or Permitted General Solicitation Material, the use of which has been consented to by the Company and the Purchasers, is listed as applicable on Schedule II(b), Schedule II(c) or Schedule II(d) hereto, respectively;
| 7. | The Company covenants and agrees with the Purchasers that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with the issue of the Securities and the Stock issuable upon conversion of the Securities (except as otherwise agreed in writing) and all other expenses in connection with the preparation, printing, reproduction and filing of the Preliminary Offering Circular and the Offering Circular and any amendments and supplements thereto and the mailing and delivering of copies thereof to the Purchasers and dealers; (ii) the cost of printing or producing this Agreement, the Indenture, the Securities, closing documents (including any compilations thereof), Permitted General Solicitation Materials and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities and the Stock issuable upon conversion of the Securities for offering and sale under state securities laws as provided in Section 5(b) hereof, including the fees and disbursements of counsel for the Purchasers in connection with such qualification and in connection with the Blue Sky and legal investment surveys (such fees not to exceed $15,000); (iv) any fees charged by securities rating services for rating the |
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| Securities; (v) the cost of preparing the Securities; (vi) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; (vii) all costs and expenses incurred in connection with any “road show” presentation to potential purchasers of the Securities; (viii) any cost incurred in connection with the listing of the Stock issuable upon conversion of the Securities; and (ix) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Sections 9 and 12 hereof, the Purchasers will pay all of their own costs and expenses, including the fees of its counsel, transfer taxes on resale of any of the Securities by the Purchasers, and any advertising expenses connected with any offers the Purchasers may make. |
| 8. | The obligations of the Purchasers hereunder shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company herein are, at and as of each Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions: |
(a) Latham & Watkins LLP, counsel for the Purchasers, shall have furnished to the Purchasers such opinion or opinions and a customary “negative assurance” letter, dated the Time of Delivery, with respect to such matters as the Purchasers may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;
(b) Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel for the Company, shall have furnished to the Purchasers (i) an opinion, dated the Time of Delivery, in form and substance satisfactory to you, to the effect set forth in Annex I hereto and (ii) a negative assurance letter, dated the Time of Delivery, in form and substance satisfactory to the Purchasers, to the effect set forth in Annex II hereto;
(c) [Reserved];
(d) On the date of the Offering Circular substantially concurrently with the execution of this Agreement and also at the Time of Delivery, Deloitte & Touche LLP shall have furnished to the Purchasers a “comfort” letter or letters, dated the respective dates of delivery thereof, in form and substance reasonably satisfactory to the Purchasers;
(e) (i) The Company and its subsidiaries, taken as a whole, shall not have sustained since the date of the latest audited financial statements incorporated by reference in the Pricing Circular any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Circular, and (ii) since the respective dates as of which information is given or incorporated by reference in the Pricing Circular there shall not have been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Pricing Circular, the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Representative so material and adverse as to make it impracticable or inadvisable to proceed with the offering or the delivery of the Securities being delivered at such Time of Delivery on the terms and in the manner contemplated in this Agreement and in each of the Pricing Disclosure Package and the Offering Circular;
15
(f) On or after the Applicable Time, unless at such time the Company has no debt securities outstanding, (i) no downgrading shall have occurred in the rating accorded the Company’s debt securities by any “nationally recognized statistical rating organization”, as that term is defined by the Commission in Section 3(a)(62) of the Exchange Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company’s debt securities;
(g) On or after the Applicable Time there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange or NASDAQ; (ii) a suspension or material limitation in trading in the Company’s securities on NASDAQ; (iii) a general moratorium on commercial banking activities declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in the judgment of the Representative makes it impracticable or inadvisable to proceed with the offering or the delivery of the Securities on the terms and in the manner contemplated in the Pricing Disclosure Package and the Offering Circular;
(h) The Stock issuable upon conversion of the Securities shall have been duly approved for listing on NASDAQ, subject to notice of issuance;
(i) The Company shall have obtained and delivered to the Purchasers executed copies of a lock-up agreement from directors and executive officers of the Company listed on Schedule IV hereto, substantially in the form set forth in Schedule V hereto;
(j) The Securities shall be eligible for clearance and settlement through the facilities of DTC; and
(k) The Company shall have furnished or caused to be furnished to the Purchasers at the Time of Delivery certificates of officers of the Company satisfactory to the Purchasers as to the accuracy of the representations and warranties of the Company herein at and as of such Time of Delivery, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsection (e) of this Section and as to such other matters as the Purchasers may reasonably request.
| 9. (a) | The Company will indemnify and hold harmless the Purchasers against any losses, claims, damages or liabilities, to which the Purchasers may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Circular, the Pricing Circular, the Pricing Disclosure Package, the Offering Circular, or any amendment or supplement thereto, any Company Supplemental Disclosure Document, any Permitted General Solicitation Material or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, and will reimburse the Purchasers for any legal or other expenses reasonably incurred by the Purchasers in connection with |
16
| investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Preliminary Offering Circular, the Pricing Circular, the Pricing Disclosure Package, the Offering Circular or any amendment or supplement thereto, any Company Supplemental Disclosure Document or any Permitted General Solicitation Material, in reliance upon and in conformity with written information furnished to the Company by the Purchasers expressly for use therein. |
(b) Each Purchaser, severally and not jointly, will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Circular, the Pricing Circular, the Pricing Disclosure Package, the Offering Circular, or any amendment or supplement thereto, or any Company Supplemental Disclosure Document, any Permitted General Solicitation Material or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Preliminary Offering Circular, the Pricing Circular, the Pricing Disclosure Package, the Offering Circular or any such amendment or supplement, any Company Supplemental Disclosure Document or any Permitted General Solicitation Material, in reliance upon and in conformity with written information furnished to the Company by the Purchasers expressly for use therein; and the Purchasers will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection unless and to the extent the indemnifying party has been materially prejudiced through the forfeiture by the indemnified party of substantial rights and defenses. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party
17
is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Purchasers on the other from the offering of the Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total discounts and commissions received by the Purchasers, in each case as set forth in the Offering Circular. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Purchasers on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Purchasers agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), the Purchasers shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities purchased by it pursuant to this Agreement and distributed to investors were offered to investors exceeds the amount of any damages which the Purchasers have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.
(e) The obligations of the Company under this Section 9 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Purchasers and each person, if any, who controls the Purchasers within the meaning of the Act and each affiliate of the Purchasers; and the obligations of the Purchasers under this Section 9 shall be in addition to any liability which the Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act.
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| 10. |
| (a) | If any Purchaser shall default in its obligation to purchase the Securities which it has agreed to purchase hereunder at a Time of Delivery, the non-defaulting Purchaser may in its discretion arrange for it or another party or other parties to purchase such Securities on the terms contained herein. If within thirty-six hours after such default by any Purchaser the non-defaulting Purchaser does not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties reasonably satisfactory to you to purchase such Securities on such terms. In the event that, within the respective prescribed periods, the non-defaulting Purchaser notifies the Company that it has so arranged for the purchase of such Securities, or the Company notifies the non-defaulting Purchaser that it has so arranged for the purchase of such Securities, the non-defaulting Purchaser or the Company shall have the right to postpone such Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Offering Circular, or in any other documents or arrangements, and the Company agrees to prepare promptly any amendments or supplements to the Offering Circular which in the opinion of the non-defaulting Purchaser may thereby be made necessary. The term “Purchaser” as used in this Agreement shall include any person substituted under this Section 10 with like effect as if such person had originally been a party to this Agreement with respect to such Securities. |
| (b) | If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Purchaser by the non-defaulting Purchaser and the Company as provided in subsection (a) above, the aggregate principal amount of such Securities which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Securities to be purchased at such Time of Delivery, then the Company shall have the right to require the non-defaulting Purchaser to purchase the principal amount of Securities which such Purchaser agreed to purchase hereunder at such Time of Delivery and, in addition, to require the non-defaulting Purchaser to purchase its pro rata share (based on the principal amount of Securities which such Purchaser agreed to purchase hereunder) of the Securities of such defaulting Purchaser for which such arrangements have not been made; but nothing herein shall relieve a defaulting Purchaser from liability for its default. |
| (c) | If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Purchaser by the non-defaulting Purchaser and the Company as provided in subsection (a) above, the aggregate principal amount of Securities which remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Securities to be purchased at such Time of Delivery, or if the Company shall not exercise the right described in subsection (b) above to require the non-defaulting Purchaser to purchase Securities of a defaulting Purchaser, then this Agreement or, with respect to a Subsequent Time of Delivery, the obligations of the Purchasers to purchase and of the Company to sell the Optional Securities, shall thereupon terminate, without liability on the part of any non-defaulting Purchaser or the |
19
| Company, except for the expenses to be borne by the Company and the Purchasers as provided in Section 7 hereof and the indemnity and contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Purchaser from liability for its default. |
| 11. | The respective indemnities, agreements, representations, warranties and other statements of the Company and the Purchasers, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of the Purchasers or any controlling person of the Purchasers, or the Company or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Securities. |
| 12. | If this Agreement shall be terminated pursuant to Section 10 hereof, the Company shall not then be under any liability to the Purchasers except as provided in Sections 7 and 9 hereof; but, if for any other reason, the Securities are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Purchasers for all documented out-of-pocket expenses approved in writing by the Purchasers, including fees and disbursements of counsel, reasonably incurred by the Purchasers in making preparations for the purchase, sale and delivery of the Securities, but the Company shall then be under no further liability to the Purchasers except as provided in Sections 7 and 9 hereof. |
| 13. | All statements, requests, notices and agreements hereunder shall be in writing, and if to the Purchasers shall be delivered or sent by mail or facsimile transmission to Goldman Sachs & Co. LLC, 200 West Street, New York, New York 10282-2198, Attention: Registration Department; and if to the Company shall be delivered or sent by mail or facsimile transmission to the address of the Company set forth in the Offering Circular, Attention: Secretary; provided, however, that any notice to the Purchasers pursuant to Section 9 hereof shall be delivered or sent by mail or facsimile transmission to the Purchasers at their respective addresses set forth in their respective Purchaser’s Questionnaire, which address will be supplied to the Company by the Purchasers upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. |
In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Purchasers are required to obtain, verify and record information that identifies its clients, including the Company, which information may include the name and address of its clients, as well as other information that will allow the Purchasers to properly identify their clients.
| 14. | This Agreement shall be binding upon, and inure solely to the benefit of, the Purchasers, the Company and, to the extent provided in Sections 9 and 11 hereof, the officers and directors of the Company and each person who controls the Company or the Purchasers, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Securities from the Purchasers shall be deemed a successor or assign by reason merely of such purchase. |
| 15. | Time shall be of the essence of this Agreement. |
| 16. | The Company acknowledges and agrees that (i) the purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Company, on the one hand, and the Purchasers, on the other, (ii) in connection therewith and with the process leading to such transaction the Purchasers are acting solely as a principal and not the agent or fiduciary of the Company, (iii) the Purchasers have not assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto |
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| (irrespective of whether the Purchasers have advised or is currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this Agreement and (iv) the Company has consulted its own legal and financial advisors to the extent it deemed appropriate. The Company agrees that it will not claim that the Purchasers have rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto. |
| 17. | This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Purchasers, with respect to the subject matter hereof. |
| 18. | THIS AGREEMENT AND ANY MATTERS RELATED TO THIS TRANSACTION SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAWS OF THE STATE OF NEW YORK. The Company agrees that any suit or proceeding arising in respect of this agreement or our engagement will be tried exclusively in the U.S. District Court for the Southern District of New York or, if that court does not have subject matter jurisdiction, in any state court located in the City and County of New York and the Company agrees to submit to the jurisdiction of, and to venue in, such courts. |
| 19. | The Company and the Purchasers hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. |
| 20. | This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. Electronic signatures complying with the New York Electronic Signatures and Records Act (N.Y. State Tech. §§ 301-309), as amended from time to time, or other applicable law will be deemed original signatures for purposes of this Agreement. Transmission by telecopy, electronic mail or other transmission method of an executed counterpart of this Agreement will constitute due and sufficient delivery of such counterpart. |
| 21. | Notwithstanding anything herein to the contrary, the Company (and the Company’s employees, representatives, and other agents) are authorized to disclose to any and all persons, the tax treatment and tax structure of the potential transaction and all materials of any kind (including tax opinions and other tax analyses) provided to the Company relating to that treatment and structure, without the Purchasers’ imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with securities laws. For this purpose, “tax treatment” means U.S. federal and state income tax treatment, and “tax structure” is limited to any facts that may be relevant to that treatment. |
| 22. | Recognition of the U.S. Special Resolution Regimes. |
(a) In the event that either Purchaser is a Covered Entity that becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from either of the Purchasers of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
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(b) In the event that either Purchaser is a Covered Entity or a BHC Act Affiliate of the Purchaser becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against either of the Purchasers is permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
(c) As used in this section:
“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Covered Entity” means any of the following:
(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
If the foregoing is in accordance with your understanding, please sign and return to us one counterpart hereof, and upon the acceptance hereof by the Purchasers, this letter and such acceptance hereof shall constitute a binding agreement between the Purchasers and the Company.
[Signature page follows]
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| Very truly yours, | ||||
| Lumentum Holdings Inc. | ||||
| By: | /s/ Wajid Ali | |||
| Name: | Wajid Ali | |||
| Title: | Executive Vice President and Chief Financial Officer | |||
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| Accepted as of the date hereof: | ||||
| Goldman Sachs & Co. LLC | ||||
| By: | /s/ Mike Voris | |||
| (Goldman Sachs & Co. LLC) | ||||
| Name: | Mike Voris | |||
| Title: | Partner | |||
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SCHEDULE I
| Purchasers |
Principal Amount of Securities to be Purchased |
|||
| Goldman Sachs & Co. LLC |
$ | 315,000,000 | ||
| Deutsche Bank Securities Inc. |
210,000,000 | |||
|
|
|
|||
| $ | 525,000,000 | |||
|
|
|
|||
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SCHEDULE II
| (b) | Additional Documents Incorporated by Reference: None |
| (c) | Company Supplemental Disclosure Documents: |
Term Sheet setting forth the final terms of the Securities, substantially in the form attached hereto as Schedule III
| (d) | Purchasers Supplemental Disclosure Documents: None |
| (d) | Permitted General Solicitation Materials: None |
26
SCHEDULE III
Pricing Term Sheet
[Attached]
27
Pricing Term Sheet, dated June 13, 2023
to Preliminary Offering Circular, dated June 12, 2023
Strictly Confidential
LUMENTUM HOLDINGS INC.
$525,000,000 PRINCIPAL AMOUNT OF
1.50% CONVERTIBLE SENIOR NOTES DUE 2029
The information in this pricing term sheet supplements the preliminary offering circular, dated June 12, 2023, of Lumentum Holdings Inc. (the “Preliminary Offering Circular”), and supersedes the information in the Preliminary Offering Circular to the extent inconsistent with the information in the Preliminary Offering Circular. In all other respects, this pricing term sheet is qualified in its entirety by reference to the Preliminary Offering Circular, including all documents incorporated by reference therein. Terms used herein but not defined herein shall have the respective meanings set forth in the Preliminary Offering Circular. All references to dollar amounts are references to U.S. dollars. The aggregate principal amount of the offering was increased from the previously announced offering size of $500,000,000. The final offering circular relating to the offering will reflect conforming changes relating to such increase in the size of the offering.
| Issuer: | Lumentum Holdings Inc., a Delaware corporation | |
| Ticker/Exchange for Common Stock: | LITE/The NASDAQ Global Select Market | |
| Securities Offered: | 1.50% Convertible Senior Notes due 2029 (the “notes”) | |
| Aggregate Principal Amount of Notes Offered: | $525,000,000 (or $603,750,000 if the initial purchasers exercise their option to purchase additional notes in full) | |
| Maturity Date: | December 15, 2029 unless earlier converted, redeemed or repurchased | |
| Interest: | 1.50% per year. Interest will accrue from the most recent date on which interest has been paid or provided for, or, if no interest has been paid, June 16, 2023, and will be payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2023. | |
| Regular Record Dates: | June 1 and December 1 of each year | |
| Offering Price: | 100.00% of principal, plus accrued interest, if any | |
| Last Reported Sale Price of our Common Stock on June 13, 2023: | $53.49 per share | |
| Initial Conversion Rate: | 14.3808 shares of our common stock per $1,000 principal amount of notes | |
| Initial Conversion Price: | Approximately $69.54 per share of our common stock | |
| Conversion Premium: | Approximately 30.0% above the last reported sale price of our common stock on June 13, 2023 | |
| Optional Redemption: | We may not redeem the notes prior to June 22, 2026. On or after June 22, 2026, we may redeem for cash all or any portion of the notes (subject to the partial redemption limitation set forth below), at our option if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. However, we may not specify a redemption date that falls on or after the 26th scheduled trading day immediately preceding the maturity date. No sinking fund is provided for the notes, which means that we are not required to redeem or retire the notes periodically. If we elect to redeem fewer than all of the outstanding notes, at least $100.0 million aggregate principal amount of notes must be outstanding and not subject to redemption as of the relevant redemption notice date. See “Description of Notes—Optional Redemption” in the Preliminary Offering Circular. | |
| Joint Book Running Managers: | Goldman Sachs & Co. LLC Deutsche Bank Securities Inc. | |
| Pricing Date: | June 13, 2023 | |
| Trade Date: | June 14, 2023 | |
| Expected Settlement Date: | June 16, 2023 | |
| CUSIP Number: | 55024U AG4 | |
| ISIN: | US55024UAG40 | |
| Listing: | None | |
| Use of Proceeds: | We estimate that we will receive net proceeds from this offering of approximately $520.1 million (or approximately $598.2 million if the initial purchasers exercise their option to purchase additional notes in full).
We intend to use a portion of the net proceeds of this offering to (i) repurchase approximately $125 million aggregate principal amount of our 0.250% Convertible Senior Notes due 2024 using approximately $132.8 million of the net proceeds of the offering and (ii) purchase approximately $125 million of our common stock, in each case, concurrently with the pricing of the offering in privately negotiated transactions effected through one of the initial purchasers of the notes or its affiliate, as our agent.
We intend to use the remainder of the net proceeds from the offering for general corporate purposes, which may include the repayment or repurchase of our indebtedness, including any Existing Notes, capital expenditures, working capital and potential acquisitions. From time to time we evaluate potential acquisitions of businesses, technologies or products. Currently, however, we do not have any definitive agreements with respect to any pending material acquisitions. See “Use of Proceeds” in the Preliminary Offering Circular. | |
| Adjustment to Conversion Rate Upon Conversions in Connection with a Make-Whole Fundamental Change or Notice of Redemption: | The following table sets forth the number of additional shares by which we will increase the conversion rate for a holder that converts its notes in connection with a make-whole fundamental change or notice of redemption having the stock price and effective date set forth below: | |
| Effective Date |
$53.49 | $60.00 | $65.00 | $69.54 | $80.00 | $90.40 | $100.00 | $125.00 | $150.00 | $200.00 | $300.00 | $400.00 | $500.00 | $600.00 | ||||||||||||||||||||||||||||||||||||||||||
| June 16, 2023 |
4.3142 | 3.5300 | 3.0591 | 2.7055 | 2.0841 | 1.6492 | 1.3533 | 0.8613 | 0.5856 | 0.3058 | 0.1033 | 0.0374 | 0.0104 | 0.0001 | ||||||||||||||||||||||||||||||||||||||||||
| December 15, 2023 |
4.3142 | 3.5300 | 3.0591 | 2.7055 | 2.0841 | 1.6405 | 1.3379 | 0.8399 | 0.5651 | 0.2910 | 0.0967 | 0.0346 | 0.0094 | 0.0000 | ||||||||||||||||||||||||||||||||||||||||||
| December 15, 2024 |
4.3142 | 3.5300 | 3.0591 | 2.7055 | 2.0513 | 1.5819 | 1.2701 | 0.7706 | 0.5054 | 0.2516 | 0.0806 | 0.0278 | 0.0070 | 0.0000 | ||||||||||||||||||||||||||||||||||||||||||
| December 15, 2025 |
4.3142 | 3.5300 | 3.0591 | 2.6451 | 1.9263 | 1.4473 | 1.1367 | 0.6576 | 0.4165 | 0.1990 | 0.0612 | 0.0198 | 0.0040 | 0.0000 | ||||||||||||||||||||||||||||||||||||||||||
| December 15, 2026 |
4.3142 | 3.5300 | 2.9138 | 2.4658 | 1.7214 | 1.2434 | 0.9446 | 0.5098 | 0.3086 | 0.1416 | 0.0426 | 0.0127 | 0.0015 | 0.0000 | ||||||||||||||||||||||||||||||||||||||||||
| December 15, 2027 |
4.3142 | 3.3213 | 2.6498 | 2.1731 | 1.4113 | 0.9524 | 0.6841 | 0.3314 | 0.1899 | 0.0858 | 0.0266 | 0.0070 | 0.0000 | 0.0000 | ||||||||||||||||||||||||||||||||||||||||||
| December 15, 2028 |
4.3142 | 2.9353 | 2.1732 | 1.6572 | 0.9068 | 0.5246 | 0.3360 | 0.1391 | 0.0788 | 0.0389 | 0.0130 | 0.0029 | 0.0000 | 0.0000 | ||||||||||||||||||||||||||||||||||||||||||
| December 15, 2029 |
4.3142 | 2.2858 | 1.0038 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | ||||||||||||||||||||||||||||||||||||||||||
The exact stock price and effective date may not be set forth in the table above, in which case:
| • | if the stock price is between two stock prices in the table or the effective date is between two effective dates in the table, the number of additional shares by which the conversion rate will be increased will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock prices and the earlier and later effective dates, as applicable, based on a 365-day year; |
| • | if the stock price is greater than $600.00 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to the conversion rate; and |
| • | if the stock price is less than $53.49 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to the conversion rate. |
Notwithstanding the foregoing, in no event will the conversion rate be increased on account of a make-whole fundamental change or notice of redemption to exceed 18.6950 shares of common stock per $1,000 principal amount of notes, subject to adjustments in the same manner as the conversion rate is required to be adjusted as set forth under “Description of the Notes—Conversion Rights—Conversion Rate Adjustments” in the Preliminary Offering Circular.
Before you invest, you should read the Preliminary Offering Circular and the documents incorporated therein that the issuer has filed with the SEC for more complete information about the issuer and the offering. You may get the incorporated documents the issuer has filed with the SEC for free by visiting EDGAR on the SEC website at www.sec.gov.
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
SCHEDULE IV
| Directors |
Non-Director Officers | |
| Alan S. Lowe | Wajid Ali | |
| Harold L. Covert | Judy Hamel | |
| Pamela Fletcher | Jason Reinhardt | |
| Isaac Harris | Vincent Retort | |
| Penelope A. Herscher | ||
| Julia S. Johnson | ||
| Brian J. Lillie | ||
| Ian S. Small | ||
| Janet Wong | ||
SCHEDULE V
Lumentum Holdings Inc.
Form of Lock-Up Agreement
June [ ● ], 2023
Goldman Sachs & Co. LLC,
200 West Street,
New York, New York 10282-2198
Re: Lumentum Holdings Inc. - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that Goldman Sachs & Co. LLC and Deutsche Bank Securities Inc. (the “Purchasers”), propose to enter into a Purchase Agreement (the “Purchase Agreement”) with Lumentum Holdings Inc., a Delaware corporation (the “Company”), providing for the placement (the “Placement”) of the Company’s Convertible Senior Notes due 2029 (the “Securities”) in a transaction not requiring registration under the Securities Act of 1933, as amended (the “Securities Act”). The Securities will be convertible into common stock, par value $0.001 per share, of the Company (the “Shares”), cash, or a combination of cash and Shares, at the Company’s election.
In consideration of the agreement by the Purchasers to offer and sell the Securities, and of other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period beginning from the date hereof and continuing to and including the date 60 days after the date of the Purchase Agreement (the “Lock-Up Period”), the undersigned will not, and will not cause or direct any of its Affiliates (which, for purposes of this Lock-Up Agreement, shall be defined as in Rule 405 of the Securities Act, but shall not include entities that the undersigned may be deemed to control solely due to such person’s position as a director or officer of such entity and/or the direct or indirect ownership by such person, in the aggregate, of less than a ten percent equity interest in such entity) to, (i) offer, sell, contract to sell, pledge, grant any option to purchase, lend or otherwise dispose of any Shares, or any options or warrants to purchase any Shares, or any securities convertible into, exchangeable for or that represent the right to receive Shares (such options, warrants or other securities, collectively, “Derivative Instruments”), including without limitation any such Shares or Derivative Instruments now owned or hereafter acquired by the undersigned (collectively, the “Undersigned’s Shares”), (ii) engage in any hedging or other transaction or arrangement (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap or any other derivative transaction or instrument, however described or defined) which is designed to or which reasonably could be expected to lead to or result in a sale, loan, pledge or other disposition (whether by the undersigned or someone other than the undersigned), or transfer of any of the economic consequences of ownership, in whole or in part, directly or indirectly, of any Shares or Derivative Instruments, whether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of Shares or other securities, in cash or otherwise (any such sale, loan, pledge or other disposition, or transfer of economic consequences, a “Transfer”) or
(iii) otherwise publicly announce any intention to engage in or cause any action or activity described in clause (i) above or transaction or arrangement described in clause (ii) above. The undersigned represents and warrants that the undersigned is not, and has not caused or directed any of its Affiliates to be or become, currently a party to any agreement or arrangement that provides for, is designed to or which reasonably could be expected to lead to or result in any Transfer in violation of the terms of this Lock-Up Agreement during the Lock-Up Period.
Notwithstanding the foregoing, the undersigned may transfer the Undersigned’s Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, (iii) by will or intestacy or by operation of law, such as pursuant to a domestic order, divorce settlement or similar order, provided that the transferee thereof agrees to be bound in writing by the restrictions set forth herein, (iv) pursuant to any written trading plan meeting the requirements of Rule 10b5-1 (a “10b5-1 Trading Plan”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that is existing on the date hereof, (v) in connection with the sale of the Undersigned’s Shares acquired in open market transactions after the consummation of the Placement, provided that no filing with the Securities Exchange Commission with respect to such sale, reporting a reduction in beneficial ownership of Shares or otherwise reporting such sale, will be required or will be voluntarily made during the Lock-Up Period, (vi) if (a) the undersigned is an employee of the Company as of the date of transfer and (b) to the extent that the Company does not elect to settle tax withholding and remittance obligations of the undersigned (or the employer of the undersigned) in connection with the vesting of restricted stock or restricted stock units held by the undersigned by withholding Shares, then the undersigned may transfer up to that number of Shares underlying the restricted stock or restricted stock units outstanding as of the date of the final Offering Circular relating to the Securities and held by the undersigned that are vested and/or settled for purposes of satisfying any income, employment, local, or social tax withholding and remittance obligations of the undersigned or the Company as a result of such vesting and/or settlement, provided that any filing under Section 16 of the Exchange Act required in connection therewith indicates that such transfer is to satisfy tax withholding obligations in connection with such exercise or vesting and/or settlement, (vii) to the Company, (viii) pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction made to all holders of the Company’s capital stock involving a change of control of the Company, provided that in the event that such tender offer, merger, consolidation or other such transaction is not completed, the Undersigned’s Shares shall remain subject to the provisions of this Lock-Up Agreement or (ix) with the prior written consent of Goldman Sachs & Co. LLC. For purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. Notwithstanding the restrictions set forth in this Lock-Up Agreement, the undersigned may, at any time after the date hereof, enter into a 10b5-1 Trading Plan relating to the sale or transfer of the Undersigned’s Shares, provided that such 10b5-1 Trading Plan does not provide for the sale or transfer of the Undersigned’s Shares during the Lock-Up Period and no public announcement or filing under the Exchange Act regarding the establishment of such 10b5-1 Trading Plan shall be required of or voluntarily made by or on behalf of the undersigned or the Company. The undersigned now has, and, except as contemplated by clause (i) through (ix) above, for the duration of this Lock-Up Agreement will have, good and marketable title to the Undersigned’s Shares, free and clear of all liens, encumbrances, and claims whatsoever. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the Undersigned’s Shares except in compliance with the foregoing restrictions.
This Lock-Up Agreement shall automatically terminate and its provisions shall be of no further force and effect upon the earliest to occur, if any, of: (a) if the Purchase Agreement has been executed and is subsequently terminated, the date of such termination, (b) if the Purchase Agreement has not been executed, written notice by the Company to the Purchasers that the Company no longer intends to proceed with the offering of Securities or (c) June 16, 2023 if the Purchase Agreement has not been executed by such date.
The undersigned understands that the Company and the Purchasers are relying upon this Lock-Up Agreement in proceeding toward consummation of the offering. The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors, and assigns.
| Very truly yours, |
|
|
| Exact Name of Shareholder |
|
|
| Authorized Signature |
|
|
| Title |
[Signature Page to Lockup Agreement]
ANNEX I
Form of WSGR Opinion
[Attached]
[***]
ANNEX II
Form of WSGR Negative Assurance Letter
[Attached]
[***]
Exhibit 99.1
Lumentum Holdings Inc. Announces $500 Million Convertible Notes Offering
SAN JOSE, Calif., June 12, 2023 — Lumentum Holdings Inc. (“Lumentum”) (NASDAQ: LITE) today announced its intention to offer, subject to market conditions and other factors, $500 million aggregate principal amount of convertible senior notes due in 2029 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”). Lumentum also expects to grant the initial purchasers of the notes a 13-day option to purchase up to an additional $75 million aggregate principal amount of the notes.
The notes will be senior, unsecured obligations of Lumentum, and interest will be payable semi-annually in arrears. The notes will be convertible at the option of holders, subject to certain conditions and during certain periods, into cash, shares of Lumentum’s common stock or a combination of cash and shares of Lumentum’s common stock, with the form of consideration at Lumentum’s election. The interest rate, conversion rate and certain other terms of the notes are to be determined upon pricing of the offering.
Lumentum intends to use a portion of the net proceeds of the offering to (i) repurchase a portion of its 0.250% Convertible Senior Notes due 2024 (the “2024 notes”), and (ii) purchase up to approximately $150 million of its common stock, in each case, concurrently with the pricing of the offering in privately negotiated transactions effected through one of the initial purchasers of the notes or its affiliate, as its agent. Lumentum intends to use the remaining net proceeds of the offering for general corporate purposes, which may include the repayment or repurchase of its indebtedness, including any of its existing convertible notes, capital expenditures, working capital and potential acquisitions.
Holders of the 2024 notes that are repurchased in the concurrent repurchases described above may purchase shares of Lumentum’s common stock in the open market to unwind any hedge positions they may have with respect to the 2024 notes. These activities may affect the trading price of Lumentum’s common stock and, if conducted concurrently with this offering, may result in a higher initial conversion price for the notes Lumentum is offering. Additionally, the concurrent repurchases of shares of Lumentum’s common stock described above may result in the common stock trading at prices that are higher than would be the case in the absence of these repurchases, which may result in a higher initial conversion price for the notes Lumentum is offering.
The notes will be offered to qualified institutional buyers pursuant to Rule 144A under the Act. Neither the notes nor the shares of common stock issuable upon conversion of the notes, if any, have been, nor will be, registered under the Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These include statements regarding Lumentum’s financing plans, Lumentum’s ability to complete the offering, the expected closing date of the offering and Lumentum’s intended use of the net proceeds of the offering. Forward looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” “contemplate,” “believe,” “predict,” “potential” and similar expressions or variations intended to
identify forward-looking statements. These statements are based on the beliefs and assumptions of Lumentum’s management, which are in turn based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Actual results may differ materially from those anticipated or predicted by Lumentum’s forward-looking statements as a result of various important factors, including, but not limited to, the terms of the notes and the offering, the risks and uncertainties related to whether or not Lumentum will consummate the offering and the impact of general economic, industry, market or political conditions. In addition, all forward-looking statements are subject to other risks detailed in our Quarterly Report on Form 10-Q for the quarter ended April 1, 2023 and the risks discussed in our other filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and we undertake no obligation to revise or update this news release to reflect events or circumstances after the date hereof, except as required by applicable law.
About Lumentum
Lumentum (NASDAQ: LITE) is a market-leading designer and manufacturer of innovative optical and photonic products enabling optical networking and laser applications worldwide. Lumentum optical components and subsystems are part of virtually every type of telecom, enterprise, and data center network. Lumentum lasers enable advanced manufacturing techniques and diverse applications including next-generation imaging and sensing capabilities. Lumentum is headquartered in San Jose, California with R&D, manufacturing, and sales offices worldwide.
Contact Information:
| Investors: | Kathy Ta, 408-750-3853; [email protected] | |
| Media: | Caroline Pan, 650-267-4180; [email protected] | |
| Category: | Financial | |
-2-
Exhibit 99.2
Lumentum Holdings Inc. Announces Upsize and Pricing of $525 Million Convertible Notes Offering
SAN JOSE, Calif., June 13, 2023 – Lumentum Holdings Inc. (“Lumentum”) (NASDAQ: LITE) today announced the pricing of $525 million aggregate principal amount of convertible senior notes due 2029 (the “notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Act”). The aggregate principal amount of the offering was increased from the previously announced offering size of $500 million (or $575 million if the initial purchasers exercise their option to purchase additional notes in full). Lumentum granted the initial purchasers of the notes a 13-day option to purchase up to an additional $78.75 million aggregate principal amount of the notes. The sale of the notes to the initial purchasers is expected to settle on June 16, 2023, subject to customary closing conditions, and is expected to result in approximately $520.1 million (or approximately $598.2 million if the initial purchasers fully exercise their option to purchase additional notes) in net proceeds to Lumentum after deducting the initial purchasers’ discount and estimated offering expenses payable by Lumentum.
The notes will be senior, unsecured obligations of Lumentum. The notes will bear interest at a rate of 1.50% per year. Interest will be payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2023. The notes will mature on December 15, 2029, unless earlier converted, redeemed or repurchased.
Lumentum intends to use a portion of the net proceeds of the offering to (i) repurchase approximately $125 million aggregate principal amount of its 0.250% Convertible Senior Notes due 2024 using approximately $132.8 million of the net proceeds of the offering, and (ii) purchase approximately $125 million of its common stock, in each case, concurrently with the pricing of the offering in privately negotiated transactions effected through one of the initial purchasers of the notes or its affiliate, as its agent. Lumentum intends to use the remaining net proceeds of the offering for general corporate purposes, which may include the repayment or repurchase of its indebtedness, including any of its existing convertible notes, capital expenditures, working capital and potential acquisitions.
Holders of the 2024 notes that are repurchased in the concurrent repurchases described above may purchase shares of Lumentum’s common stock (“common stock”) in the open market to unwind any hedge positions they may have with respect to the 2024 notes. These activities may affect the trading price of Lumentum’s common stock and the initial conversion price of the notes. Additionally, the concurrent repurchases of shares of Lumentum’s common stock described above may result in the common stock trading at prices that are higher than would be the case in the absence of these repurchases.
The initial conversion rate for the notes is 14.3808 shares of Lumentum’s common stock (“common stock”) per $1,000 principal amount of notes (which is equivalent to an initial conversion price of approximately $69.54 per share) and is subject to adjustment upon the occurrence of certain events. Prior to the close of business on the business day immediately preceding September 15, 2029, the notes will be convertible at the option of the noteholders upon satisfaction of specified conditions and during certain periods. Thereafter, until the close of business on the second scheduled trading day preceding the maturity date, the notes will be convertible at the option of the noteholders at any time regardless of these conditions. Conversions of the notes will be settled in cash, shares of common stock or a combination of cash and shares of common stock, with the form of consideration at Lumentum’s election. The initial conversion price represents a premium of approximately 30% over the last reported sale price of Lumentum’s common stock on June 13, 2023, of $53.49 per share.
Lumentum may redeem for cash all or any portion of the notes, at its option (subject to certain limitations), on or after June 22, 2026, if the last reported sale price of its common stock has been at least 130% of the
conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which Lumentum provides notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the notes.
The notes will be offered to qualified institutional buyers pursuant to Rule 144A under the Act. Neither the notes nor the shares of common stock issuable upon conversion of the notes, if any, have been, nor will be, registered under the Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These include statements regarding Lumentum’s financing plans, Lumentum’s ability to complete the offering, the expected closing date of the offering and Lumentum’s intended use of the net proceeds of the offering. Forward looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” “contemplate,” “believe,” “predict,” “potential” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of Lumentum’s management, which are in turn based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Actual results may differ materially from those anticipated or predicted by Lumentum’s forward-looking statements as a result of various important factors, including, but not limited to, the terms of the notes and the offering, the risks and uncertainties related to whether or not Lumentum will consummate the offering, and the impact of general economic, industry, market or political conditions. In addition, all forward-looking statements are subject to other risks detailed in our Quarterly Report on Form 10-Q for the quarter ended April 1, 2023 and the risks discussed in our other filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and we undertake no obligation to revise or update this news release to reflect events or circumstances after the date hereof, except as required by applicable law.
About Lumentum
Lumentum (NASDAQ: LITE) is a market-leading designer and manufacturer of innovative optical and photonic products enabling optical networking and laser applications worldwide. Lumentum optical components and subsystems are part of virtually every type of telecom, enterprise, and data center network. Lumentum lasers enable advanced manufacturing techniques and diverse applications including next-generation imaging and sensing capabilities. Lumentum is headquartered in San Jose, California with R&D, manufacturing, and sales offices worldwide.
Contact Information:
| Investors: | Kathy Ta, 408-750-3853; [email protected] | |
| Media: | Caroline Pan, 650-267-4180; [email protected] | |
| Category: | Financial | |