RideNow Group, Inc 8-K, filed Jan 16, 2020
RideNow Group, Inc. (RDNW)
8-K
2020-01-16
For: 2020-01-10
View Original
Added on
April 12, 2026
About this 8-K
RideNow Group, Inc filed this 8-K on January 16, 2020, reporting on events of January 10, 2020.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.03: New debt or off-balance-sheet obligation
- Item 3.02: Unregistered sale of equity
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 10,
2020
RumbleOn, Inc.
(Exact name of registrant as specified in its charter)
Nevada
(State or Other Jurisdictionof Incorporation)
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001-38248
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46-3951329
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(Commission File Number)
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(I.R.S.
Employer Identification
No.)
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901
W. Walnut Hill Lane
Irving, Texas |
75038
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(Address of Principal Executive
Offices)
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(Zip
Code)
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(469) 250-1185
(Registrant’s Telephone Number, Including Area
Code)
(Former Name or Former Address, If Changed Since Last
Report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2 (b))
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4 (c))
Securities
registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name
of each exchange on which registered
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Class B
Common Stock, $0.001 par value
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RMBL
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The
Nasdaq Stock Market LLC
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (17 CFR
§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934
(17 CFR §240.12b-2).
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.
1
Item 1.01. Entry into Material Definitive
Agreement.
Public Offering
On
January 10, 2020, RumbleOn, Inc. (the “Company”)
entered into an underwriting agreement (the “Underwriting
Agreement”) with National Securities Corporation, as
representative to the several underwriters named on Schedule 1-A to
the Underwriting Agreement (the “Underwriters”),
relating to the Company’s public offering (the
“Offering”) of 18,000,000 shares of Class B Common
Stock (the “Firm Shares”) and an additional 2,700,000
shares of Class B Common Stock (the “Additional
Shares,” and together with Firm Shares, the
“Shares”).
The
Underwriters agreed to purchase the Firm Shares at a price of $0.57
per share. The Firm Shares were offered, issued, and sold pursuant
to a prospectus supplement and accompanying prospectus filed with
the Securities and Exchange Commission (the “SEC”)
pursuant to an effective shelf registration statement filed with
the SEC on Form S-3 (Registration No. 333-234340) under the
Securities Act of 1933, as amended (the “Securities
Act”).
On January 14, 2020, the Company issued the Firm
Shares and closed the Offering at a public price of $0.57 per share
for net proceeds to the Company of approximately $9.3 million after
deducting the underwriting discount and offering fees and expenses
payable by the Company. Certain
of the Company's officers and directors participated in the
Offering.
On
January 16, 2020, the Company received notice of the Underwriters'
intent to exercise the over-allotment option in full. The Company
expects to close on the over-allotment exercise on January 17,
2020.
The
Underwriting Agreement included customary representations,
warranties, and agreements by the Company, customary conditions to
closing, indemnification obligations of the Company and the
Underwriters, including for liabilities under the Securities Act,
other obligations of the parties and termination provisions. The
representations, warranties and covenants contained in the
Underwriting Agreement were made only for purposes of such
agreement and as of specific dates, were solely for the benefit of
the parties to the agreement and were subject to limitations agreed
upon by the contracting parties.
The
Underwriting Agreement is filed as Exhibit 1.1 to this report and
is incorporated herein by reference. The foregoing description of
the terms of the Underwriting Agreement is qualified in its
entirety by reference to Exhibit 1.1. A copy of the opinion of
Snell & Wilmer L.L.P. relating to the legality of the issuance
and sale of the Shares in the Offering is attached hereto as
Exhibit 5.1.
The Company intends to use the net proceeds of the
Offering for working capital and general corporate purposes, which
may include further technology development, increased spending on
marketing and advertising and capital expenditures necessary to
grow the business. Pending these uses, the Company may invest the net
proceeds in short-term interest-bearing investment grade
instruments.
Convertible Note Exchange and Offer
Also on January 10, 2020, the Company entered into
a note exchange and subscription agreement (the "Note Exchange
& Subscription Agreement"), as amended by that certain Joinder
and Amendment effective January 13, 2020 (the "Joinder Agreement,"
and together with the Note Exchange & Subscription Agreement,
the "Note Agreement"), with the investors in the Company's May 2019
144A Convertible Note transaction (the "Note Investors"), pursuant
to which the Company agreed to complete (i) a note exchange
pursuant to which $30 million of the Company's 6.75% Convertible
Senior Notes due 2024 would be cancelled in exchange for a new
series of 6.75% Convertible Senior Notes due 2025 (the “New
Notes”) and (ii) the issuance of additional New Notes in a
private placement in reliance on the exemption from registration
provided by Rule 506 of Regulation D of the Securities Act as a
sale not involving any public offering (the "Note
Offering"). On January 14, 2020, the Company closed the Note
Offering. The net proceeds for
the Note Offering were approximately $8.6 million, after deducting
offering-related expenses.
2
The New Notes were
issued on January 14, 2020
pursuant to an Indenture (the “Indenture”), by and
between the Company and Wilmington Trust, National Association, as
trustee (the “Trustee”). The Note Agreement includes
customary representations, warranties and covenants by the Company
and customary closing conditions. The New Notes will bear interest
at 6.75% per annum, payable semiannually on January 1 and July 1 of
each year, beginning on July 1, 2020. The New Notes may bear
additional interest under specified circumstances relating to the
Company’s failure to comply with its reporting obligations
under the Indenture or if the New Notes are not freely tradeable as
required by the Indenture. The New Notes will mature on January 1,
2025, unless earlier converted, redeemed or repurchased pursuant to
their terms.
The initial conversion rate of the New Notes is
500 shares of Class B Common Stock per $1,000 principal amount of
New Notes, which is equal to an initial conversion price of $2.00
per share. The conversion rate is subject to adjustment in certain
events as set forth in the Indenture, but will not be adjusted for
any accrued and unpaid interest. In addition, upon the occurrence
of a "make-whole fundamental change" (as defined in the Indenture),
the Company will, in certain circumstances, increase the conversion
rate by a number of additional shares for a holder that elects to
convert its New Notes in connection with such make-whole
fundamental change. Before July 1, 2024, the New
Notes will be convertible only under circumstances as described in
the Indenture. No adjustment to
the conversion rate as a result of conversion or a make-whole
fundamental change adjustment will result in a conversion rate
greater than 1233.0456 shares per $1,000 in principal
amount.
The Indenture contains a “blocker provision” which
provides that no holder (other than the depositary with respect to
the notes) or beneficial owner of a New Note shall have the right
to receive shares of the Class B Common Stock upon conversion to
the extent that, following receipt of such shares, such holder or
beneficial owner would be the beneficial owner of more than 4.99%
of the outstanding shares of the Class B Common Stock.
The New Notes are not
redeemable by the Company before the January 14,
2023. The
Company may redeem for cash all
or any portion of the New Notes, at its option, on or after January
14, 2023 if the last reported sale price of the Class B Common
Stock has been at least 130% of the conversion price then in effect
for at least 20 trading days (whether or not consecutive),
including the trading day immediately preceding the date on which
the Company provides notice of redemption, during any 30
consecutive trading day 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.
The
New Notes rank senior in right of payment to any of the
Company’s indebtedness that is expressly subordinated in
right of payment to the New Notes; equal in right of payment to any
of the Company’s unsecured indebtedness that is not so
subordinated; effectively junior in right of payment to any of the
Company’s secured indebtedness to the extent of the value of
the assets securing such indebtedness; and structurally junior to
all indebtedness and other liabilities of current or future
subsidiaries of the Company (including trade
payables).
The
New Notes are subject to events of default typical for this type of
instrument. If an event of default, other than an event of default
in connection with certain events of bankruptcy, insolvency or
reorganization of the Company or any significant subsidiary, occurs
and is continuing, the Trustee by notice to the Company, or the
holders of at least 25% in principal amount of the outstanding New
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 New Notes then outstanding to be due and payable.
In
connection with the Note Offering, on January 14, 2020, the Company
entered into a registration rights agreement (the "Registration
Rights Agreement") with the Note Investors, pursuant to which the
Company has agreed to file with the SEC an automatic shelf
registration statement, if the Company is eligible to do so and has
not already done so, and, if the Company is not eligible for an
automatic shelf registration statement, then in lieu of the
foregoing the Company shall file a shelf registration statement for
the registration of, and the sale on a continuous or delayed basis
by the holders of, all of the New Notes pursuant to Rule 415 or any
similar rule that may be adopted by the Commission, and use its
commercially reasonable efforts to cause the shelf registration
statement to become or be declared effective under the Securities
Act on the day that is 120 days after January 14,
2020.
The
foregoing description is qualified in its entirety by reference to
the text of the Indenture, the form of 6.75% Convertible Senior New
Notes due 2025, the form of Registration Rights Agreement, the form
of Note Exchange & Subscription Agreement and the form of
Joinder Agreement, which are attached as Exhibits 4.1, 4.2, 4.3,
10.1 and 10.2 respectively, to this Current Report on Form 8-K and
are incorporated herein by reference.
3
Investor Note Exchange
Also,
in connection with the closing of the Offering and the Note
Offering, certain of the Company's investors extended the maturity
of currently outstanding promissory notes, and exchanged such notes
for new notes (the "New Investor Notes"), pursuant to that certain
Note Exchange Agreement, dated January 14, 2020 (the
"Investor Note Exchange
Agreement"), by and between the
Company and each investor thereto (the "Investors"), including
Halcyon Consulting, LLC ("Halcyon"), an entity affiliated with
Kartik Kakarala, a director of the Company, such New Investor Note
for an aggregate principal amount of $833,333, Blue Flame Capital,
LLC ("Blue Flame"), an entity affiliated with Denmar Dixon, a
director of the Company, such New Investor Note for an aggregate
principal amount of $99,114 and
Mr. Dixon, individually, such New Investor Note for an aggregate
principal amount of $272,563. The
New Investor Notes, having an aggregate principal amount of
approximately $1.5 million, will mature on January 31, 2021, and
will be convertible at any time at the Investor's option at a price
of $3.00 per share. In connection with the issuance of the New
Investor Notes, the Company also entered into a Security Agreement,
dated as of January 14, 2020 with the Investors, pursuant to which
the Company granted to the Investors a security interest in certain
collateral to secure, on a pro rata basis based on the percentage
equal to the amount of principal outstanding on each New Investor
Note divided by the amount of principal outstanding on all of the
New Investor Notes to each Investor.
The
foregoing description is qualified in its entirety by reference to
the text of the form of Investor Note Exchange Agreement, the form
of New Investor Note and the form of Security Agreement, which are
attached as Exhibits 10.3, 10.4, and 10.5 respectively, to this
Current Report on Form 8-K and are incorporated herein by
reference.
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 under Item 1.01 is incorporated herein by
reference.
Item 3.02 Unregistered Sales of Equity Securities.
The
information set forth under Item 1.01 is incorporated herein by
reference.
The
New Investor Notes and the New Notes were sold to the investors
pursuant to the Investor Note Exchange Agreement and the Note
Agreement, respectively, in a private placement in reliance on the
exemption from registration provided by Rule 506 of Regulation D of
the Securities Act as a sale not involving any public offering. To
the extent that any shares of Class B Common Stock are issued upon
conversion of the New Investor Notes and the New Notes, they will
be issued in transactions anticipated to be exempt from
registration under the Securities Act by virtue of
Section 3(a)(9) thereof, because no commission or other
remuneration is expected to be paid in connection with conversion
of the New Investor Notes and the New Notes, and any resulting
issuance of shares of Class B Common Stock.
Item 8.01. Other Events.
On
January 14, 2020, the Company issued a press release announcing the
closing of the offerings. The press release is attached as Exhibit
99.1 to this report and is incorporated herein by
reference.
Item 9.01. Financial Statements and
Exhibits.
(d) Exhibits
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Exhibit No.
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Description
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Underwriting
Agreement, between the Company and the underwriters named therein,
dated January 10, 2020.
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Indenture,
dated January 14, 2020, between the Company and Wilmington Trust
National Association.
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4.2
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Form of
6.75% Convertible Senior Note due 2025 (included as Exhibit A to
the Indenture filed as Exhibit 4.1).
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Form of
Registration Rights Agreement, dated January 14, 2020
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Opinion
of Snell & Wilmer L.L.P.
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Form of
Note Exchange & Subscription Agreement, dated January 10,
2020
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Form of
Joinder & Amendment, dated January 10, 2020
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Form of
Investor Note Exchange Agreement
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Form of
New Investor Note
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Form of
Security Agreement, dated January 14, 2020
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23.1
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Consent
of Snell & Wilmer L.L.P. (included in Exhibit
5.1).
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Press
Release, dated January 14, 2020
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4
SIGNATURES
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.
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RUMBLEON, INC.
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Date:
January 16, 2020
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By:
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/s/
Steven R. Berrard
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Steven
R. Berrard
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Chief
Financial Officer
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5
Exhibit 1.1
18,000,000 Shares
RUMBLEON, INC.
Class B Common Stock
UNDERWRITING AGREEMENT
January
10, 2020
National
Securities Corporation
As
Representative of the several Underwriters
200
Vesey Street, 25th Floor
New
York, New York 10281
Ladies
and Gentlemen:
The
undersigned, RumbleOn, Inc., a corporation formed under the laws of
the State of Nevada (the “Company”), hereby confirms its
agreement (this “Agreement”) with National
Securities Corporation (hereinafter referred to as the
“Representative”) and with the
other underwriters named on Schedule 1-A hereto for which
the Representative is acting as representative (the Representative
and such other underwriters being collectively called the
“Underwriters”
or, individually, an “Underwriter”) as
follows:
1.
Purchase and Sale of
Shares.
1.1 Nature
and Purchase of Shares.
(i) On the basis of the
representations and warranties herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue
and sell, severally and not jointly, to the Underwriters, an
aggregate of 18,000,000 shares (the
“Firm Shares”)
of the Company’s Class B Common Stock, par value $0.001 per
share (the “Class B
Common Stock”), and,
at the election of the Underwriters, upon the terms and conditions
stated herein, up to 2,700,000 additional shares (the
“Additional
Shares”) of Class B Common Stock solely to cover
over-allotments, if any (the Firm Shares and the Additional Shares
that the Underwriters elect to purchase pursuant to Section 1.2(iii) hereof being
collectively called the “Shares”).
(ii) The
Underwriters, severally and not jointly, agree to purchase from the
Company the Shares at a purchase price of $0.57 per share (92% of
the per Share offering price). The Shares are to be offered
initially to the public at the offering price set forth on the
cover page of the Prospectus (as defined in Section 2.1.1). The offering
and sale of the Shares is hereinafter referred to as the
“Offering.”
1
1.2 Payment
and Delivery of Shares.
(i) Delivery and
payment for the Firm Shares shall be made at 10:00 a.m., New York
City time, on the second (2nd) Business Day
following the date of this Agreement (or the third (3rd) Business Day
following the date of this Agreement if the purchase price set
forth in Schedule
1-B is determined after 4:01 p.m., New York City time) or at
such earlier time as shall be agreed upon by the Representative and
the Company, at the offices of McGuireWoods LLP, 1251 Avenue of
the Americas, 20th Floor, New York,
New York 10020 (“Underwriters’ Counsel”), or
at such other place (or remotely by facsimile or other electronic
transmission) as shall be agreed upon by the Representative and the
Company. The hour and date of delivery and payment for the Firm
Shares is called the “Closing
Date.”
(ii) Payment
for the Shares shall be made on the Closing Date by wire transfer
in Federal (same day) funds, payable to the order of the Company
upon delivery of the certificates (in form and substance
satisfactory to the Underwriters) representing the Shares (or
through the facilities of The Depository Trust Company
(“DTC”)) for the
account of the Underwriters. The Shares shall be registered in such
name or names and in such authorized denominations as the
Representative may request in writing. The Company shall not be
obligated to sell or deliver the Shares except upon tender of
payment by the Representative for all of the Shares. The term
“Business Day”
means any day other than a Saturday, a Sunday or a legal holiday or
a day on which banking institutions are authorized or obligated by
law to close in New York, New York.
(iii) As
referenced in Section
1.1(i) above, the Company hereby grants to the Underwriters
the option to purchase from the Company an aggregate of up to the
total number of Additional Shares, at a purchase price equal to
$0.57 per share. This option may be exercised by the Representative
at any time and from time to time on or before the date that is
thirty (30) days following the date hereof, by written notice to
the Company. Each notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised, and
the date and time when the Additional Shares are to be delivered
(each such date and time being herein referred to as an
“Option Closing
Date”); provided, however, that no Option Closing Date
shall be earlier than the Closing Date nor later than one Business
Day after the date on which the option shall have been exercised
unless the Company and the Representative otherwise agree.
Payment of the purchase price and delivery of the Additional Shares
shall be made on each Option Closing Date in the same manner and at
the same place as payment for and delivery of the Firm Shares
occurs pursuant to Section
1.2(ii) above.
2. Representations and Warranties of the
Company. The Company represents and warrants to the
Underwriters as of the Applicable Time (as defined below), as of
the Closing Date and as of each Option Closing Date as
follows:
2.1 Filing
of Registration Statement. The Company has filed with the U.S.
Securities and Exchange Commission (the “Commission”) a “shelf”
Registration Statement (as hereinafter defined) on Form S-3 (File
No. 333-234340) which became effective on October 31, 2019 (the
“Effective
Date”), including a base prospectus dated October 31,
2019 relating to the securities registered pursuant to such
Registration Statement (the “Base Prospectus”), for the
registration of the Shares under the Securities Act of 1933, as
amended (the “Securities
Act”), which Registration Statement and amendment or
amendments have been prepared by the Company in all material
respects in conformity with the requirements of the Securities Act
and the rules and regulations of the Commission under the
Securities Act (the “Securities Act Regulations”) and
contain all material statements that are required to be stated
therein in accordance with the Securities Act and the Securities
Act Regulations. On the Effective Date, the Company met the
then-applicable requirements for use of Form S-3 under the
Securities Act. As of the date hereof, the Company meets, and as of
the Closing Date and each Option Closing Date, the Company will
meet, the requirements for use of Form S-3 under the Securities
Act. Pursuant to General Instruction I.B.6 of Form S-3, the
issuance of the Firm Shares and the Additional Shares is eligible
to be registered pursuant to the Prospectus. The term
“Registration
Statement” as used in this Agreement means the
registration statement (including all exhibits, financial schedules
and all documents and information deemed to be a part of the
Registration Statement pursuant to Rule 430A and 430B of the
Securities Act Regulations), as amended and/or supplemented to the
date of this Agreement, including the Base Prospectus. The
Registration Statement is effective under the Securities Act and no
stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the
Prospectus (as defined below) has been issued by the Commission and
no proceedings for that purpose have been instituted or, to the
knowledge of the Company, are threatened by the
Commission.
2
The
Company proposes to file with the Commission pursuant to Rule
424(b) of the Securities Act Regulations a final prospectus
supplement relating to the issuance and sale of the Shares to the
Base Prospectus. Such supplemental form of prospectus, in the form
in which it shall be filed with the Commission pursuant to Rule
424(b) (including the Base Prospectus as so supplemented) is
hereinafter called the “Prospectus.” Any preliminary form
of Prospectus which is filed or used prior to filing of the
Prospectus is hereinafter called a “Preliminary Prospectus.” Any
reference herein to the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed
under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”),
on or before the last to occur of the Effective Date, the date of
the last Preliminary Prospectus, or the date of the Prospectus, and
any reference herein to the terms “amend,”
“amendment,” or “supplement” with respect
to the Registration Statement, the Base Prospectus, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include (i) the filing of any document under the Exchange Act after
the Effective Date, the date of such Preliminary Prospectus or the
date of the Prospectus, as the case may be, which is incorporated
by reference, and (ii) any such document so filed. If the Company
has filed an abbreviated registration statement to register
additional securities pursuant to Rule 462(b) of the Securities Act
Regulations (the “462(b)
Registration Statement”), then any reference herein to
the Registration Statement shall also be deemed to include such
462(b) Registration Statement.
As used
in this Section 2.1
and elsewhere in this Agreement:
“Applicable Time” means 7:45 a.m.,
New York City time, on the date of this Agreement.
“Pricing Disclosure Package” means
the Pricing Prospectus and the information included on Schedule 2 hereto, considered
together.
“Pricing Prospectus” means the
Preliminary Prospectus, if any, and the Base Prospectus, each as
amended and supplemented immediately prior to the Applicable Time,
including any document incorporated by reference therein and any
prospectus supplement deemed to be a part thereof.
2.2 No Stop Orders, etc. Neither
the Commission nor any state regulatory authority has issued any
order preventing or suspending the use of the Registration
Statement, any Preliminary Prospectus or the Prospectus or has
instituted or, to the Company’s knowledge, threatened to
institute, any proceedings with respect to such an order. The
Company has complied with each request (if any) from the Commission
for additional information.
2.3 Listing and Maintenance
Requirements. The Company is subject to and in compliance in
all material respects with the reporting requirements of Section 13
or Section 15(d) of the Exchange Act, as applicable. The Class B
Common Stock is registered pursuant to Section 12(b) of the
Exchange Act and is listed on the NASDAQ Capital Market (the
“Exchange”), and
the Company has taken no action designed to, or reasonably likely
to have the effect of, terminating the registration of the Class B
Common Stock under the Exchange Act or delisting the Class B Common
Stock from the Exchange, nor has the Company received any
notification that the Commission, FINRA or The NASDAQ Stock Market
LLC (“NASDAQ”)
is contemplating terminating such registration or listing, except
as described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus. No consent, approval, authorization or
order of, or filing, notification or registration with, the
Exchange is required for the listing and trading of the shares of
Class B Common Stock on the Exchange, except for (i) a Notification
Form: Listing of Additional Shares; and (ii) a Notification Form:
Change in the Number of Shares Outstanding.
2.4 Disclosures in Registration
Statement.
3
2.4.1. Compliance
with Securities Act and 10b-5 Representation.
(i) Each of the
Registration Statement and any post-effective amendment thereto, at
the time it became effective, at the date of this Agreement and at
the Closing Date and each Option Closing Date, complied and will
comply in all material respects with the requirements of the
Securities Act and the Securities Act Regulations. Each Preliminary
Prospectus, including the prospectus filed as part of the
Registration Statement as originally filed or as part of any
amendment or supplement thereto, and the Prospectus, at the time
each was filed with the Commission, at the date of this Agreement
and at the Closing Date and each Option Closing Date, complied in
all material respects with the requirements of the Securities Act
and the Securities Act Regulations. Each Preliminary Prospectus
delivered to the Underwriters for use in connection with this
Offering and
the Prospectus was or will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation
S-T.
(ii) Neither
the Registration Statement nor any amendment thereto, at its
effective time, as of the Applicable Time, or at the Closing Date
or any Option Closing Date contained, contains or will contain an
untrue statement of a material fact or omitted, omits or will omit
to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.
(iii) The
Pricing Disclosure Package, as of the Applicable Time or at the
Closing Date or any Option Closing Date did not, does not and will
not include 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 statements made or
statements omitted in reliance upon and in conformity with written
information furnished to the Company with respect to the
Underwriters by the Representative expressly for use in
the Registration Statement, the Pricing Prospectus or the
Prospectus or any amendment thereof or supplement thereto. The
parties acknowledge and agree that such information provided by or
on behalf of any Underwriter consists solely of the following
disclosure contained in the “Underwriting” section of
the Prospectus: the fourth paragraph under the caption
“Underwriting,” the second
sentence of the first paragraph and the first sentence of the
second paragraph under the caption “Underwriting –
Stabilization,” and the information in the caption
“Underwriting – Electronic Distribution”
(collectively, the “Underwriter’s Information”);
and
(iv) Neither
the Prospectus nor any amendment or supplement thereto (including
any prospectus wrapper), as of its issue date, at the time of any
filing with the Commission pursuant to Rule 424(b) or at the
Closing Date or any Option Closing Date, included, includes or will
include an untrue statement of a material fact or omitted, omits or
will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this representation and
warranty shall not apply to the Underwriter’s
Information.
2.4.2. Disclosure
of Agreements. The agreements and documents incorporated by
reference in the Registration Statement, the Pricing Disclosure
Package and the Prospectus conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as
applicable, and there are no agreements or other documents required
by the Securities Act, the Securities Act Regulations or the
Exchange Act to be described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus or to be filed with
the Commission as exhibits to the Registration Statement, that have
not been so filed. Each agreement or other instrument (however
characterized or described) to which the Company is a party or by
which it is or may be bound or affected and (i) that is
referred to or incorporated by reference in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, or
(ii) is material to the Company’s business, has been
duly authorized and validly executed by the Company, is in full
force and effect in all material respects and is enforceable
against the Company and, to the Company’s knowledge, the
other parties thereto, in accordance with its terms, except
(x) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting
creditors’ rights generally, (y) as enforceability of
any indemnification or contribution provision may be limited under
the federal and state securities laws, and (z) that the remedy
of specific performance and injunctive and other forms of equitable
relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought. None of such agreements or instruments has been assigned
by the Company, and neither the Company nor, to the Company’s
knowledge, any other party is in default thereunder and, to the
Company’s knowledge, no event has occurred that, with the
lapse of time or the giving of notice, or both, would constitute a
default thereunder. Performance by the Company of the material
provisions of such agreements or instruments will not result in a
material violation of any existing applicable law, rule,
regulation, judgment, order or decree of any governmental agency or
court, domestic or foreign, having jurisdiction over the Company or
any of its assets or businesses (each, a “Governmental Entity”), including,
without limitation, those relating to environmental laws and
regulations.
4
2.4.3. Prior
Securities Transactions. No securities of the Company have
been sold by the Company or by or on behalf of, or for the benefit
of, any person or persons controlling, controlled by or under
common control with the Company, except as disclosed in the
Registration Statement, the Pricing Disclosure Package and the
Preliminary Prospectus.
2.4.4. Regulations.
The disclosures in the Registration Statement, the Pricing
Disclosure Package and the Prospectus concerning the effects of
federal, state, local and all foreign regulation on the Offering
and the Company’s business as currently contemplated and
conducted are correct in all material respects and no other such
regulations are required to be disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus which
are not so disclosed.
2.5 Changes After Dates in Registration
Statement.
2.5.1. No
Material Adverse Change. Since the respective dates as of
which information is given in the Registration Statement, the
Pricing Disclosure Package and the Prospectus, except as otherwise
specifically stated therein: (i) there has been no material
adverse change in the financial position or results of operations
of the Company, nor any change or development that, singularly or
in the aggregate, would involve a material adverse change or a
prospective material adverse change, in or affecting the condition
(financial or otherwise), results of operations, business, assets
or prospects of the Company (a “Material Adverse Change”);
(ii) there have been no material transactions entered into by
the Company, other than as contemplated pursuant to this Agreement;
and (iii) no officer or director of the Company has resigned
from any position with the Company.
2.5.2. Recent
Securities Transactions, etc. Subsequent to the respective
dates as of which information is given in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, and
except as may otherwise be indicated or contemplated herein or
disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, the Company has not: (i) issued
any securities or incurred any liability or obligation, direct or
contingent, for borrowed money; or (ii) declared or paid any
dividend or made any other distribution on or in respect to its
capital stock.
2.6 Independent Accountants. Scharf
Pera & Co., PLCC (the “Auditor”), whose report is filed
with the Commission as part of the Registration Statement, the
Pricing Disclosure Package and the Prospectus, is an independent
registered public accounting firm as required by the Securities Act
and the Securities Act Regulations and the Public Company
Accounting Oversight Board. The Auditor has not, during the periods
covered by the financial statements included or incorporated by
reference in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, provided to the Company any non-audit
services, as such term is used in Section 10A(g) of the Exchange
Act. Since November 19, 2019, Grant Thornton LLP has acted, and
continues to act, as the Company’s independent, registered
public accounting firm.
2.7 Financial Statements, etc. The
financial statements, including the notes thereto and supporting
schedules, included or incorporated by reference in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, fairly present the financial position and the results
of operations of the Company at the dates and for the periods to
which they apply; and such financial statements have been prepared
in conformity with U.S. generally accepted accounting principles
(“GAAP”),
consistently applied throughout the periods involved (provided that
unaudited interim financial statements are subject to year-end
audit adjustments that are not expected to be material in the
aggregate and do not contain all footnotes required by GAAP); and
the supporting schedules included in the Registration Statement
present fairly the information required to be stated therein.
Except as included therein, no historical or pro forma financial
statements are required to be included or incorporated by reference
in the Registration Statement, the Pricing Disclosure Package or
the Prospectus under the Securities Act or the Securities Act
Regulations. All disclosures contained in the Registration
Statement, the Pricing Disclosure Package or the Prospectus
regarding “non-GAAP financial measures” (as such term
is defined by the rules and regulations of the Commission), if any,
comply with Regulation G of the Exchange Act and Item 10 of
Regulation S-K of the Securities Act, to the extent applicable.
Each of the Registration Statement, the Pricing Disclosure Package
and the Prospectus discloses all material off-balance sheet
transactions, arrangements, obligations (including contingent
obligations), and other relationships of the Company with
unconsolidated entities or other persons that may have a material
current or future effect on the Company’s financial
condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources, or significant
components of revenues or expenses. Except as disclosed or incorporated by reference
in the Registration Statement, the Pricing Disclosure Package and
the Prospectus, (a) the Company has not incurred any material
liabilities or obligations, direct or contingent, or entered into
any material transactions other than in the ordinary course of
business, (b) the Company has not declared or paid any dividends or
made any distribution of any kind with respect to its capital
stock, (c) there has not been any change in the capital stock of
the Company, or, other than in
the course of business, any grants under any stock compensation
plan, and (d) there has not
been any material adverse change in the Company’s long-term
or short-term debt.
5
2.8 Authorized Capital, etc. The
Company had, at the date or dates indicated in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the
duly authorized, issued and outstanding capitalization as set forth
therein. Based on the assumptions stated in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the
Company will have on the Closing Date the adjusted stock
capitalization set forth therein. Except as set forth in, or
contemplated by, the Registration Statement, the Pricing Disclosure
Package and the Prospectus, on the Effective Date, as of the
Applicable Time and on the Closing Date and each Option Closing
Date, there will be no stock options, warrants, or other rights to
purchase or otherwise acquire any authorized, but unissued shares
of the Company’s Class A Common Stock, $0.001 per share (the
“Class A Common
Stock”) or the Class B Common Stock or any security
convertible or exercisable into shares of Class A Common Stock or
Class B Common Stock, or any contracts or commitments to issue or
sell shares of Class A Common Stock, Class B Common Stock or any
such options, warrants, rights or convertible
securities.
2.9 Valid
Issuance of Securities, etc.
2.9.1. Outstanding
Securities. All issued and outstanding securities of the
Company issued prior to the transactions contemplated by this
Agreement have been duly authorized and validly issued and are
fully paid and non-assessable; the holders thereof have no rights
of rescission with respect thereto, and are not subject to personal
liability by reason of being such holders; and none of such
securities were issued in violation of the preemptive rights of any
holders of any security of the Company or similar contractual
rights granted by the Company. The authorized shares of Class B
Common Stock conform in all material respects to all statements
relating thereto contained in the Registration Statement, the
Pricing Disclosure Package and the Prospectus. The offers and sales
of the outstanding shares of Class A Common Stock and Class B
Common Stock were at all relevant times either registered under the
Securities Act and the applicable state securities or “blue
sky” laws or, based in part on the representations and
warranties of the purchasers of such shares of Class A Common Stock
and Class B Common Stock, exempt from such registration
requirements.
2.9.2. Shares
Sold Pursuant to this Agreement. The Shares have been duly
authorized for issuance and sale and, when issued and paid for,
will be validly issued, fully paid and non-assessable; the holders
thereof are not and will not be subject to personal liability by
reason of being such holders; the Shares are not and will not be
subject to the preemptive rights of any holders of any security of
the Company or similar contractual rights granted by the Company;
and all corporate action required to be taken for the
authorization, issuance and sale of the Shares has been duly and
validly taken. The Shares conform in all material respects to all
statements with respect thereto contained in the Registration
Statement, the Pricing Disclosure Package and the
Prospectus.
2.10 Registration
Rights of Third Parties. Except as set forth in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, no holders of any securities of the Company or any
rights exercisable for or convertible or exchangeable into
securities of the Company have the right to require the Company to
(i) register the sale or resale of any such securities of the
Company under the Securities Act, (ii) include any such securities
in a registration statement to be filed by the Company or (iii)
register the resale of any securities of the Company held by such
persons, or that such persons may acquire upon the exercise or
conversion of any other securities of the Company, pursuant to the
Prospectus as part of the Offering.
2.11 Validity
and Binding Effect of Agreement. This Agreement has been
duly and validly authorized by the Company, and, when executed and
delivered, will constitute, the valid and binding agreement of the
Company, enforceable against the Company in accordance with its
terms, except: (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally; (ii) as enforceability of
any indemnification or contribution provision may be limited under
the federal and state securities laws; and (iii) that the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to
the discretion of the court before which any proceeding therefor
may be brought.
2.12 No
Conflicts, etc. The execution, delivery and performance by
the Company of this Agreement and all ancillary documents, the
consummation by the Company of the transactions herein and therein
contemplated and the compliance by the Company with the terms
hereof and thereof do not and will not, with or without the giving
of notice or the lapse of time or both: (i) result in a
material breach of, or conflict with any of the terms and
provisions of, or constitute a material default under, or result in
the creation, modification, termination or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
pursuant to the terms of any agreement or instrument to which the
Company is a party; (ii) result in any violation of the
provisions of the Company’s Articles of Incorporation (as the
same may be amended or restated from time to time, the
“Charter”) or
the Company’s bylaws (the “Bylaws”); or (iii) violate
any existing applicable law, rule, regulation, judgment, order or
decree of any Governmental Entity as of the date
hereof.
6
2.13 No
Defaults; Violations. No material default exists in the due
performance and observance of any term, covenant or condition of
any material license, contract, indenture, mortgage, deed of trust,
note, loan or credit agreement, or any other agreement or
instrument evidencing an obligation for borrowed money, or any
other material agreement or instrument to which the Company is a
party or by which the Company may be bound or to which any of the
properties or assets of the Company is subject. The Company is not
in violation of any term or provision of its Charter or Bylaws, or
in violation of any franchise, license, permit, applicable law,
rule, regulation, judgment or decree of any Governmental
Entity.
2.14 Corporate
Power; Licenses; Consents.
2.14.1. Conduct
of Business. The Company has all requisite corporate power
and authority, and has all necessary authorizations, approvals,
orders, licenses, certificates and permits of and from all
governmental regulatory officials and bodies that it needs as of
the date hereof to conduct its business purpose as described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus.
2.14.2. Transactions
Contemplated Herein. The Company has all corporate power and
authority to enter into this Agreement and to carry out the
provisions and conditions hereof, and all consents, authorizations,
approvals and orders required in connection therewith have been
obtained. No consent, authorization or order of, and no filing
with, any court, Governmental Entity or other body is required for
the valid issuance, sale and delivery of the Shares and the
consummation of the transactions and agreements contemplated by
this Agreement and as contemplated by the Registration Statement,
the Pricing Disclosure Package and the Prospectus, except with
respect to applicable federal and state securities laws and the
rules and regulations of the Financial Industry Regulatory
Authority, Inc. (“FINRA”).
2.15 Independence
Questionnaires. To the Company’s knowledge, all
information concerning the Company’s directors, officers and
principal shareholders as described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, as well as in
the Lock-Up Agreement (as defined in Section 2.24), is true and
correct in all material respects and the Company has not become
aware of any information which would cause such information to
become materially inaccurate and incorrect.
2.16 Litigation;
Governmental Proceedings. There is no action, suit,
proceeding, inquiry, arbitration, investigation, litigation or
governmental proceeding pending or, to the Company’s
knowledge, threatened against, or involving the Company which has
not been disclosed in the Registration Statement, the Pricing
Disclosure Package and the Prospectus or in connection with the
Company’s listing application for the listing of the Shares
on the Exchange, which if resolved adversely to the Company is
reasonably likely to result in a Material Adverse
Change.
2.17 Good
Standing. The Company has been duly organized and is validly
existing as a corporation and is in good standing under the laws of
the State of Nevada as of the date hereof, and is duly qualified to
do business and is in good standing in each other jurisdiction in
which its ownership or lease of property or the conduct of business
requires such qualification, except where the failure to qualify,
singularly or in the aggregate, would not have or reasonably be
expected to result in a Material Adverse Change.
2.18 Insurance.
The Company carries or is entitled to the benefits of insurance,
with reputable insurers, in such amounts and covering such risks
which the Company believes are adequate, including, but not limited
to, directors and officers insurance coverage at least equal to
$5,000,000 and the Company has included each Underwriter as an
additional insured party to the directors and officers insurance
coverage and all such insurance is in full force and effect. The
Company has no reason to believe that it will not be able (i) to
renew its existing insurance coverage as and when such policies
expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its
business as now conducted and at a cost that would not result in a
Material Adverse Change.
7
2.19 Transactions
Affecting Disclosure to FINRA.
2.19.1. Finder’s
Fees. There are no claims, payments, arrangements,
agreements or understandings relating to the payment of a
finder’s, consulting or origination fee by the Company or any
of the Company’s officers, directors or beneficial owners of
5% or more of any class of the Company’s securities of with
respect to the sale of the Shares hereunder or any other
arrangements, agreements or understandings of the Company or, to
the Company’s knowledge, any of its shareholders that may
affect the Underwriters’ compensation, as determined by
FINRA.
2.19.2. Payments
Within Twelve (12) Months. Except as described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, the Company has not made any direct or indirect
payments (in cash, securities or otherwise) to: (i) any
person, as a finder’s fee, consulting fee or otherwise, in
consideration of such person raising capital for the Company or
introducing to the Company persons who raised or provided capital
to the Company; (ii) any FINRA member; or (iii) any person or
entity that has any direct or indirect affiliation or association
with any FINRA member, within the twelve (12) months prior to the
Effective Date, other than the payment to the Underwriters as
provided hereunder in connection with the Offering.
2.19.3. Use
of Proceeds. None of the net proceeds of the Offering will
be paid by the Company to any participating FINRA member or its
affiliates, except as specifically authorized herein.
2.19.4. FINRA
Affiliation. There is no (i) officer or director of the
Company, (ii) beneficial owner of 5% or more of any class of the
Company’s securities or (iii) beneficial owner of the
Company’s unregistered equity securities which were acquired
during the 180-day period immediately preceding the filing of the
Registration Statement that is an affiliate or associated person of
a FINRA member participating in the Offering (as determined in
accordance with the rules and regulations of FINRA).
2.19.5. Information.
All information provided by the Company in its FINRA questionnaire
to Underwriters’ Counsel specifically for use by
Underwriters’ Counsel in connection with its Public Offering
System filings (and related disclosure) with FINRA is true, correct
and complete in all material respects.
2.20 Foreign
Corrupt Practices Act. The Company or, to the
Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company or any other person acting on behalf of
the Company, has not, directly or indirectly, given or agreed to
give any money, gift or similar benefit (other than legal price
concessions to customers in the ordinary course of business) to any
customer, supplier, employee or agent of a customer or supplier, or
official or employee of any governmental agency or instrumentality
of any government (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was,
is, or may be in a position to help or hinder the business of the
Company (or assist it in connection with any actual or proposed
transaction) that (i) might subject the Company to any damage
or penalty in any civil, criminal or governmental litigation or
proceeding, (ii) if not given in the past, might have had a
Material Adverse Change, or (iii) if not continued in the
future, might adversely affect the assets, business, operations or
prospects of the Company. The Company has taken reasonable steps to
ensure that its accounting controls and procedures are sufficient
to cause the Company to comply in all material respects with the
Foreign Corrupt Practices Act of 1977, as amended.
2.21 Compliance
with OFAC. Neither the Company nor, to the Company’s
knowledge, any director, officer, agent, employee or affiliate of
the Company or any other person acting on behalf of the Company, is
currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Department of the Treasury
(“OFAC”), and
the Company will not, directly or indirectly, use the proceeds of
the Offering hereunder, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered
by OFAC.
2.22 Money
Laundering Laws. The operations of the Company are and have
been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any Governmental
Entity (collectively, the “Money Laundering Laws”); and no
action, suit or proceeding by or before any Governmental Entity
involving the Company with respect to the Money Laundering Laws is
pending or, to the best knowledge of the Company,
threatened.
8
2.23 Officers’
Certificate. Any certificate signed by any duly authorized
officer of the Company and delivered to the Representative or to
Underwriters’ Counsel shall be deemed a representation and
warranty by the Company to the Underwriters as to the matters
covered thereby.
2.24 Lock-Up
Agreements. Schedule 3 hereto contains a
complete and accurate list of the Company’s executive
officers and directors as well as any stockholders deemed to be
affiliates through their ownership of the Company’s Class B
Common Stock or Class A Common Stock (collectively,
the “Lock-Up
Parties”). The Company has caused each of the Lock-Up
Parties to deliver to the Representative an executed Lock-Up
Agreement, in the form attached hereto as Exhibit A (the
“Lock-Up
Agreement”), prior to the execution of this
Agreement.
2.25 Subsidiaries.
Except as set forth on Schedule 2.25 and in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, the Company has no direct or indirect
subsidiaries.
2.26 Related
Party Transactions. There are no business relationships or
related party transactions involving the Company or any other
person required to be described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus that have not been
described as required.
2.27 Board
of Directors. The Board of Directors of the Company is
comprised of the persons set forth in the Company’s
definitive proxy statement filed with the Commission on April 19,
2019, except as set forth in the Company’s Current Report on
Form 8-K filed with the Commission on October 25, 2019, and
incorporated by reference into each Preliminary Prospectus and the
Prospectus. The qualifications of the persons serving as board
members and the overall composition of the board comply with the
Exchange Act, the rules and regulations of the Commission under the
Exchange Act (the “Exchange
Act Regulations”), the Sarbanes-Oxley Act of 2002 and
the rules promulgated thereunder (the “Sarbanes-Oxley Act”) applicable to
the Company and the listing rules of the Exchange, except as
described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus. At least one member of the Audit
Committee of the Board of Directors of the Company qualifies as an
“audit committee financial expert,” as such term is
defined under Regulation S-K and the listing rules of the
Exchange.
2.28 Sarbanes-Oxley
Compliance.
2.28.1. Disclosure
Controls. The Company has developed and currently maintains
disclosure controls and procedures that comply with Rule 13a-15 or
15d-15 under the Exchange Act Regulations, and such controls and
procedures are effective to ensure that all material information
concerning the Company is made known on a timely basis to the
individuals responsible for the preparation of the Company’s
Exchange Act filings and other public disclosure
documents.
2.28.2. Compliance.
The Company is, or at the Applicable Time and on the Closing Date
and each Option Closing Date will be, in material compliance with
the provisions of the Sarbanes-Oxley Act applicable to it, and has
implemented or will implement such programs and taken reasonable
steps to ensure the Company’s future compliance (not later
than the relevant statutory and regulatory deadlines therefor) with
all of the material provisions of the Sarbanes-Oxley
Act.
2.29 Accounting
Controls. The Company maintains systems of “internal
control over financial reporting” (as defined under Rules
13a-15 and 15d-15 under the Exchange Act Regulations) that comply
with the requirements of the Exchange Act and have been designed
by, or under the supervision of, its principal executive and
principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP,
including, but not limited to, internal accounting controls
sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. Except as disclosed in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the
Company is not aware of any material weaknesses in its internal
controls. The Company’s auditors and the Audit Committee of
the Board of Directors of the Company have been advised of: (i) all
significant deficiencies and material weaknesses in the design or
operation of internal controls over financial reporting which are
known to the Company’s management and that have adversely
affected or are reasonably likely to adversely affect the
Company’ ability to record, process, summarize and report
financial information; and (ii) any fraud known to the
Company’s management, whether or not material, that involves
management or other employees who have a significant role in the
Company’s internal controls over financial
reporting.
9
2.30 No
Investment Company Status. The Company is not and, after
giving effect to the Offering and the application of the proceeds
thereof as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, will not be, required to
register as an “investment company,” as defined in the
Investment Company Act of 1940, as amended.
2.31 No
Labor Disputes. No labor dispute with the employees of the Company
exists or, to the knowledge of the Company, is
imminent.
2.32 Intellectual
Property Rights. The Company owns or possesses or has valid
rights to use all patents, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights,
licenses, trade secrets and similar rights (“Intellectual Property Rights”), if
any, necessary for the conduct of the business of the Company as
currently carried on and as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus. To
the knowledge of the Company, no action or use by the Company
necessary for the conduct of its business as currently carried on
and as described in the Registration Statement and the Prospectus
infringes any Intellectual Property Rights of others. Except as
would not reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Change, the Company has not
received any notice alleging any such infringement, with asserted
Intellectual Property Rights of others. Except as would not
reasonably be expected to result, individually or in the aggregate,
in a Material Adverse Change (A) to the knowledge of the Company,
there is no infringement, misappropriation or violation by third
parties of any of the Intellectual Property Rights owned by the
Company; (B) there is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or claim by others
challenging the rights of the Company in or to any such
Intellectual Property Rights, and the Company is unaware of any
facts which would form a reasonable basis for any such claim, that
would, individually or in the aggregate, together with any other
claims in this Section
2.32, reasonably be expected to result in a Material Adverse
Change; (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 by a court of
competent jurisdiction invalid or unenforceable, in whole or in
part, and there is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property Rights, and
the Company is unaware of any facts which would form a reasonable
basis for any such claim that would, individually or in the
aggregate, together with any other claims in this Section 2.32, reasonably be
expected to result in a Material Adverse Change; (D) there is no
pending or, to the Company’s knowledge, 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, the Company has not
received any written notice of such claim and the Company is
unaware of any other facts which would form a reasonable basis for
any such claim that would, individually or in the aggregate,
together with any other claims in this Section 2.32, reasonably be
expected to result in a Material Adverse Change; and (E) to the
Company’s knowledge, no employee of the Company is in
violation in any material respect of any term of any employment
contract, patent disclosure agreement, invention assignment
agreement, non-competition agreement, non-solicitation agreement,
nondisclosure agreement or any restrictive covenant to or with a
former employer where the basis of such violation relates to such
employee’s employment with the Company, or actions undertaken
by the employee while employed with the Company and could
reasonably be expected to result, individually or in the aggregate,
in a Material Adverse Change. To the Company’s knowledge, all
material trade secrets developed by and belonging to the Company
which have not been patented have been kept confidential. The
Company is not a party to or bound by any options, licenses or
agreements with respect to the Intellectual Property Rights of any
other person or entity that are required to be set forth in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus and are not described therein. The Registration
Statement, the Pricing Disclosure Package and the Prospectus
contain in all material respects the same description of the
matters set forth in the preceding sentence. None of the technology
employed by the Company has been obtained or is being used by the
Company in violation of any contractual obligation binding on the
Company or, to the Company’s knowledge, any of its officers,
directors or employees, or otherwise in violation of the rights of
any persons.
2.33 Taxes.
The Company has filed all returns (as hereinafter defined) required
to be filed with taxing authorities prior to the date hereof or has
duly obtained extensions of time for the filing thereof. The
Company has paid all taxes (as hereinafter defined) shown as due on
such returns that were filed and has paid all taxes imposed on or
assessed against the Company. The provisions for taxes payable, if
any, shown on the financial statements filed with or as part of the
Registration Statement are sufficient for all accrued and unpaid
taxes, whether or not disputed, and for all periods to and
including the dates of such financial statements. Except as
disclosed in writing to the Representative, (i) no issues have been
raised (and are currently pending) by any taxing authority in
connection with any of the returns or taxes asserted as due from
the Company, and (ii) no waivers of statutes of limitation with
respect to the returns or collection of taxes have been given by or
requested from the Company. The term “taxes” means all federal, state,
local, foreign and other net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license,
lease, service, service use, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, windfall
profits, customs, duties or other taxes, fees, assessments or
charges of any kind whatever, together with any interest and any
penalties, additions to tax or additional amounts with respect
thereto. The term “returns” means all returns,
declarations, reports, statements and other documents required to
be filed in respect to taxes.
10
2.34 ERISA
Compliance. The Company and any “employee benefit
plan” (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, “ERISA”)) established or maintained
by the Company or its “ERISA Affiliates” (as defined
below) are in compliance in all material respects with ERISA.
“ERISA
Affiliate” means, with respect to the Company, any
member of any group of organizations described in Sections
414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations
thereunder (the “Code”) of which the Company is a
member. No “reportable event” (as defined under ERISA)
has occurred or is reasonably expected to occur with respect to any
“employee benefit plan” established or maintained by
the Company or any of its ERISA Affiliates. No “employee
benefit plan” established or maintained by the Company or any
of its ERISA Affiliates, if such “employee benefit
plan” were terminated, would have any “amount of
unfunded benefit liabilities” (as defined under ERISA).
Neither the Company nor any of its ERISA Affiliates has incurred or
reasonably expects to incur any material liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any
“employee benefit plan” or (ii) Sections 412, 4971,
4975 or 4980B of the Code. Each “employee benefit plan”
established or maintained by the Company or any of its ERISA
Affiliates that is intended to be qualified under Section 401(a) of
the Code is so qualified and, to the knowledge of the Company,
nothing has occurred, whether by action or failure to act, which
would cause the loss of such qualification.
2.35 Compliance
with Laws. The Company: (A) is and at all times has been in
compliance with all statutes, rules, or regulations applicable to
the conduct of the Company’s business (collectively, the
“Applicable
Laws”), except as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Change; (B) has not received any warning letter, untitled letter or
other correspondence or notice from any other Governmental Entity
alleging or asserting noncompliance with any Applicable Laws or any
licenses, certificates, approvals, clearances, authorizations,
permits and supplements or amendments thereto required by any such
Applicable Laws (collectively, the “Authorizations”); (C) possesses
all material Authorizations and such Authorizations are valid and
in full force and effect and the Company is not in material
violation of any term of any such Authorizations; (D) has not
received notice of any claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from any
Governmental Entity or third party alleging that any of the
Company’s activities is in violation of any Applicable Laws
or Authorizations and has no knowledge that any such Governmental
Entity or third party is considering any such claim, litigation,
arbitration, action, suit, investigation or proceeding; (E) has not
received notice that any Governmental Entity has taken, is taking
or intends to take action to limit, suspend, modify or revoke any
Authorizations and has no knowledge that any such governmental
authority is considering such action; and (F) has filed, obtained,
maintained or submitted all material reports, documents, forms,
notices, applications, records, claims, submissions and supplements
or amendments as required by any Applicable Laws or Authorizations
and that all such reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments were
complete and correct on the date filed (or were corrected or
supplemented by a subsequent submission).
2.36 Reserved.
2.37 Real
Property. Except as described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, the Company has
good and marketable title in fee simple to, or has valid rights to
lease or otherwise use, all items of real or personal property
which are material to the business of the Company, in each case
free and clear of all liens, encumbrances, security interests,
claims and defects that could not, singly or in the aggregate,
materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the
Company; and all of the leases and subleases material to the
business of the Company, and under which the Company holds
properties described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, are in full force and
effect, and the Company has not received any notice of any material
claim of any sort that has been asserted by anyone adverse to the
rights of the Company under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the
Company to the continued possession of the leased or subleased
premises under any such lease or sublease.
2.38 Contracts
Affecting Capital. There are no transactions, arrangements
or other relationships between and/or among the Company, any of its
affiliates (as such term is defined in Rule 405 of the Securities
Act Regulations) and any unconsolidated entity, including, but not
limited to, any structured finance, special purpose or limited
purpose entity, that could reasonably be expected to materially
affect the Company’s liquidity or the availability of or
requirements for its capital resources required to be described or
incorporated by reference in the Registration Statement, the
Pricing Disclosure Package and the Prospectus which have not been
described or incorporated by reference as required.
2.39 Loans
to Directors or Officers. There are no outstanding loans,
advances (except normal advances for business expenses in the
ordinary course of business) or guarantees or indebtedness by the
Company to or for the benefit of any of the officers or directors
of the Company or any of their respective family members, except as
disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus.
2.40 Smaller
Reporting Company. As of the time of filing of the
Registration Statement, the Company was a “smaller reporting
company,” as defined in Rule 12b-2 of the Exchange Act
Regulations.
11
2.41 Industry
Data. The statistical and market-related data included
in each of the Registration Statement, the Pricing Disclosure
Package and the Prospectus are based on or derived from sources
that the Company reasonably and in good faith believes are reliable
and accurate or represent the Company’s good faith estimates
that are made on the basis of data derived from such
sources.
2.42 Reserved.
2.43 Testing-the-Waters
Communications. The Company has not (i) alone engaged in any
Testing-the-Waters Communications, other than Testing-the-Waters
Communications with the written consent of the Representative and
with entities that are qualified institutional buyers within the
meaning of Rule 144A under the Securities Act or institutions that
are accredited investors within the meaning of Rule 501 under the
Securities Act and (ii) authorized anyone other than the
Representative to engage in Testing-the-Waters Communications. The
Company has not distributed any Written Testing-the-Waters
Communications other than those listed on Schedule 2 hereto. For purposes
of this Agreement, the term “Testing-the-Waters Communication”
means any oral or written communication with potential investors
undertaken in reliance on Section 5(d) of the Securities Act.
“Written Testing-the-Waters Communication” means any
Testing-the-Waters Communication that is a written communication
within the meaning of Rule 405 under the Securities
Act.
2.44 Margin
Securities. The Company owns no “margin
securities” as that term is defined in Regulation U of the
Board of Governors of the Federal Reserve System (the
“Federal Reserve
Board”), and none of the proceeds of Offering will be
used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which might
cause any of the shares of Class B Common Stock to be considered a
“purpose credit” within the meanings of Regulation T, U
or X of the Federal Reserve Board.
2.45 NASDAQ
Marketplace Rules. The
Company is, and after giving effect to the Offering will be, in
compliance in all material respects with all applicable corporate
governance requirements set forth in the NASDAQ Marketplace Rules,
except (a) as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus and (b) the Exchange’s
minimum $1.00 per share bid price rule.
2.46 NASDAQ
Stockholder Approval Rules. No approval of the stockholders
of the Company under the rules and regulations of NASDAQ (including
Rule 5635 of the NASDAQ Marketplace Rules) is required to issue and
deliver the Shares to the Underwriters.
3.
Covenants of the Company. The
Company covenants and agrees as follows:
3.1 Amendments to Registration
Statement. The Company shall deliver to the Representative,
prior to filing, any amendment or supplement to the Registration
Statement or Prospectus proposed to be filed after the Effective
Date and not file any such amendment or supplement to which the
Representative shall reasonably object in writing.
12
3.2 Federal Securities
Laws.
3.2.1. Compliance.
The Company, subject to Section 3.2.2, shall comply
with the requirements of Rule 430A of the Securities Act
Regulations, and will notify the Representative promptly, and
confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective or
any amendment or supplement to the Prospectus shall have been
filed; (ii) of the receipt of any comments from the
Commission; (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information;
(iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus, or of the
suspension of the qualification of the Shares for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes or of any examination pursuant
to Section 8(d) or 8(e) of the Securities Act concerning the
Registration Statement; and (v) if the Company becomes the
subject of a proceeding under Section 8A of the Securities Act in
connection with the Offering of the Shares. The Company shall
effect all filings required under Rule 424(b) of the Securities Act
Regulations, in the manner and within the time period required by
Rule 424(b) (without reliance on Rule 424(b)(8)), and shall take
such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was
received for filing by the Commission and, in the event that it was
not, it will promptly file such prospectus. The Company shall use
its best efforts to prevent the issuance of any stop order,
prevention or suspension and, if any such order is issued, to
obtain the lifting thereof at the earliest possible
moment.
3.2.2. Continued
Compliance. The Company shall comply with the Securities
Act, the Securities Act Regulations, the Exchange Act and the
Exchange Act Regulations so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and in
the Registration Statement, the Pricing Disclosure Package and the
Prospectus. If at any time when a prospectus relating to the Shares
is (or, but for the exception afforded by Rule 172 of the
Securities Act Regulations (“Rule 172”), would be) required by
the Securities Act to be delivered in connection with sales of the
Shares, any event shall occur or condition shall exist as a result
of which it is necessary, in the opinion of Underwriters’
Counsel or Company Counsel (as defined below), to (i) amend
the Registration Statement in order that the Registration Statement
will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; (ii) amend or
supplement the Pricing Disclosure Package or the Prospectus in
order that the Pricing Disclosure Package or the Prospectus, as the
case may be, will not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser;
or (iii) amend the Registration Statement or amend or
supplement the Pricing Disclosure Package or the Prospectus, as the
case may be, in order to comply with the requirements of the
Securities Act or the Securities Act Regulations, the Company will
promptly (A) give the Representative notice of such event;
(B) prepare any amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration
Statement, the Pricing Disclosure Package or the Prospectus comply
with such requirements and, a reasonable amount of time prior to
any proposed filing or use, furnish the Representative with copies
of any such amendment or supplement; and (C) file with the
Commission any such amendment or supplement; provided, however, that the Company
shall not file or use any such amendment or supplement to which the
Representative or Underwriters’ Counsel shall reasonably
object. The Company will furnish to the Representative such number
of copies of such amendment or supplement as the Representative may
reasonably request. The Company has given the Representative notice
of any filings made pursuant to the Exchange Act or the Exchange
Act Regulations within forty-eight (48) hours prior to the
Applicable Time. The Company shall give the Representative notice
of its intention to make any such filing from the Applicable Time
until the last Option Closing Date and will furnish the
Representative with copies of the related document(s) a reasonable
amount of time prior to such proposed filing, as the case may be,
and will not file or use any such document to which the
Representative or Underwriters’ Counsel shall reasonably
object.
3.2.3. Exchange
Act Registration. For a period of three (3) years after the
date of this Agreement, the Company shall use its best efforts to
maintain the registration of the shares of Class B Common Stock
under the Exchange Act. The Company shall not deregister the shares
of Class B Common Stock under the Exchange Act without the prior
written consent of the Representative.
3.3 Delivery to the Representative of
Registration Statements. The Company has delivered or made
available or shall deliver or make available to the Representative
and Underwriters’ Counsel, without charge, signed copies of
the Registration Statement as originally filed and each amendment
thereto (including exhibits filed therewith) and signed copies of
all consents and certificates of experts, and will also deliver to
the Representative, without charge, a conformed copy of the
Registration Statement as originally filed and each amendment
thereto (without exhibits) for the Representative. The copies of
the Registration Statement and each amendment thereto furnished to
the Representative will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation
S-T.
13
3.4 Delivery to the Underwriters of
Prospectuses. The Company has delivered or made available or
will deliver or make available to the Underwriters, without charge,
as many copies of each Preliminary Prospectus as the Underwriters
reasonably requested, and the Company hereby consents to the use of
such copies for purposes permitted by the Securities Act. The
Company will furnish to the Underwriters, without charge, during
the period when a prospectus relating to the Shares is (or, but for
the exception afforded by Rule 172, would be) required to be
delivered under the Securities Act, such number of copies of the
Prospectus (as amended or supplemented) as each Underwriter may
reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
3.5 Events Requiring Notice to the
Representative. The Company shall notify the Representative
immediately and confirm the notice in writing: (i) of the
effectiveness of the Registration Statement and any amendment
thereto; (ii) of the issuance by the Commission of any stop
order or of the initiation, or the threatening, of any proceeding
for that purpose; (iii) of the issuance by any state
securities commission of any proceedings for the suspension of the
qualification of the Shares for offering or sale in any
jurisdiction or of the initiation, or the threatening, of any
proceeding for that purpose; (iv) of the mailing and delivery
to the Commission for filing of any amendment or supplement to the
Registration Statement or Prospectus; (v) of the receipt of
any comments or request for any additional information from the
Commission; and (vi) of the happening of any event during the
period described in this Section 3.5 that, in the
judgment of the Company, makes any statement of a material fact
made in the Registration Statement, the Pricing Disclosure Package
or the Prospectus untrue or that requires the making of any changes
in (a) the Registration Statement in order to make the statements
therein not misleading, or (b) in the Pricing Disclosure Package or
the Prospectus in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. If
the Commission or any state securities commission shall enter a
stop order or suspend such qualification at any time, the Company
shall make every reasonable effort to obtain promptly the lifting
of such order.
3.6 Review of Financial Statements.
For a period of five (5) years after the date of this Agreement,
the Company, at its expense, shall cause its regularly engaged
independent registered public accounting firm to review (but not
audit) the Company’s financial statements for each of the
three fiscal quarters immediately preceding the announcement of any
quarterly financial information.
3.7 Listing. The Company shall use
its best efforts to maintain the listing of the shares of Class B
Common Stock (including the Shares) on the Exchange for at least
three (3) years from the date of this Agreement.
3.8 Financial Public Relations
Firm. As of the Effective Date, the Company shall have
retained a financial public relations firm reasonably acceptable to
the Representative and the Company, which shall initially be The
Blueshirt Group, which firm shall be experienced in assisting
issuers in initial public offerings of securities and in their
relations with their security holders, and shall retain such firm
or another firm reasonably acceptable to the Representative for a
period of not less than two (2) years after the Effective
Date.
3.9 Reports to the
Representative.
3.9.1. Periodic
Reports, etc. For a period of three (3) years after the date
of this Agreement, the Company shall furnish or make available to
the Representative copies of such financial statements and other
periodic and special reports as the Company from time to time
furnishes generally to holders of any class of its securities and
also promptly furnish to the Representative: (i) a copy of each
periodic report the Company shall be required to file with the
Commission under the Exchange Act and the Exchange Act Regulations;
(ii) a copy of every press release and every news item and article
with respect to the Company or its affairs which was released by
the Company; (iii) a copy of each Form 8-K prepared and filed by
the Company; (iv) five copies of each registration statement filed
by the Company under the Securities Act; and (v) such additional
documents and information with respect to the Company and the
affairs of any future subsidiaries of the Company as the
Representative may from time to time reasonably request; provided
the Representative shall sign, if requested by the Company, a
Regulation FD compliant confidentiality agreement which is
reasonably acceptable to the Representative and Underwriters’
Counsel in connection with the Representative’s receipt of
such information. Documents filed with the Commission pursuant to
its EDGAR system shall be deemed to have been delivered to the
Representative pursuant to this Section 3.9.1.
14
3.9.2. Transfer
Agent; Transfer Sheets. For a period of three (3) years
after the date of this Agreement, the Company shall retain a
transfer agent and registrar acceptable to the Representative
(the “Transfer
Agent”) and shall furnish to the Representative at the
Company’s sole cost and expense such transfer sheets of the
Company’s securities as the Representative may reasonably
request, including the daily and monthly consolidated transfer
sheets of the Transfer Agent and DTC. West Coast Stock Transfer,
Inc. is acceptable to the Representative to act as Transfer Agent
for the shares of Class B Common Stock.
3.9.3. Trading
Reports. During such time as the Shares are listed on the
Exchange, the Company shall provide to the Representative, at the
Company’s expense, such reports published by Exchange
relating to price trading of the Shares, as the Representative
shall reasonably request.
3.9.4. Payment
of Expenses and Advisory Fee. The Company hereby agrees to
pay on the Closing Date and each Option Closing Date all expenses
incident to the performance of the obligations of the Company under
this Agreement, including, but not limited to: (a) all filing fees
and communication expenses relating to the registration of the
Shares to be sold in the Offering (including the Additional Shares)
with the Commission, (b) all filing fees and other expenses
(including the reasonable fees and disbursements of counsel to the
Underwriters) incurred in connection with qualification of the
Shares for sale under the laws of such jurisdictions as the
Representative designates, (c) costs and expenses related to the
review of the Offering by FINRA, including all filing fees and the
reasonable fees and disbursements of counsel to the Underwriters
relating to such review, (d) costs and reasonable expenses relating
to investor presentations or any “road show” in
connection with the Offering, including, without limitation, the
costs of recording and hosting on the Internet of the
Company’s road show presentation and any reasonable travel
expenses of the Company’s officers and employees and any
other expenses of the Company, (e) fees and expenses incident to
listing or continued listing of the Shares on the Exchange and on
such other stock exchanges as the Company and the Representative
together determine, (f) the fees, disbursements and expenses of the
Company’s counsel, accountants and other advisors in
connection with the Offering, (g) expenses incurred in preparing,
printing and distributing each Preliminary Prospectus and the
Prospectus (including any amendments and supplements thereto) to
the Underwriters and for expenses incurred for preparing, printing
and distributing any issuer free writing prospectuses to investors
or prospective investors, (h) reasonable fees, disbursements and
expenses of the Underwriters’ counsel, (i) the costs and
expenses of a public relations firm selected by the Company in its
sole discretion, if any, (i) the costs of preparing, printing and
delivering certificates representing the Shares, (k) fees and
expenses of the transfer agent for the delivery of the shares of
Shares, (1) stock transfer and/or stamp taxes, if any, payable upon
the transfer of securities from the Company to the Underwriters,
(m) to the extent approved by the Company in writing, the costs
associated with post-closing advertising of the Offering in the
national editions of the Wall Street Journal and New York Times,
(n) fees, expenses and disbursements relating to background checks
of the Company’s officers and directors in connection with
the Offering; provided,
however, that the maximum
amount of fees, costs and expenses incurred by the Underwriters
with respect to subparagraphs (a) through (n) above that the Company
shall be required to pay under this Section 3.9.4 shall be $75,000,
of which amount up to $65,000 shall be used to pay the fees,
disbursements and expenses of counsel to the Underwriters. The
Representative may deduct from the net proceeds of the Offering
payable to the Company on the Closing Date or any Option Closing
Date, the expenses set forth herein to be paid by the Company to
the Underwriters.
3.10 Application
of Net Proceeds. The Company shall apply the net proceeds
from the Offering received by it in a manner consistent with the
application thereof described under the caption “Use of
Proceeds” in the Registration Statement, the Pricing
Disclosure Package and the Prospectus.
3.11 Delivery
of Earnings Statements to Security Holders. The Company
shall make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth
(15th)
full calendar month following the date of this Agreement, an
earnings statement (which need not be certified by independent
registered public accounting firm unless required by the Securities
Act or the Securities Act Regulations, but which shall satisfy the
provisions of Rule 158(a) under Section 11(a) of the Securities
Act) covering a period of at least twelve (12) consecutive months
ending after the date of this Agreement.
3.12 Stabilization.
Neither the Company nor, to its knowledge, any of its employees,
directors or shareholders (without the consent of the
Representative) has taken or shall take, directly or indirectly,
any action designed to or that has constituted or that might
reasonably be expected to cause or result in, under Regulation M of
the Exchange Act, or otherwise, stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of the Shares.
3.13 Internal
Controls. The Company shall maintain a system of internal
accounting controls sufficient to provide reasonable assurances
that: (i) transactions are executed in accordance with
management’s general or specific authorization;
(ii) transactions are recorded as necessary in order to permit
preparation of financial statements in accordance with GAAP and to
maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any
differences.
3.14 Accountants.
The Company shall retain an independent registered public
accounting firm reasonably acceptable to the Representative, and
the Company shall continue to retain a nationally recognized
independent registered public accounting firm for a period of at
least three (3) years after the date of this Agreement. The
Representative acknowledges that Grant Thornton LLP is acceptable
to the Representative.
15
3.15 FINRA.
The Company shall advise the Representative (who shall make an
appropriate filing with FINRA) if it is or becomes aware that (i)
any officer or director of the Company, (ii) any beneficial owner
of 5% or more of any class of the Company’s securities, or
(iii) any beneficial owner of the Company’s unregistered
equity securities which were acquired during the 180-day period
immediately preceding the filing of the Registration Statement is
or becomes an affiliate or associated person of a FINRA member
participating in the Offering (as determined in accordance with the
rules and regulations of FINRA).
3.16 No
Fiduciary Duties. The Company acknowledges and agrees that
the Underwriters’ responsibility to the Company is solely
contractual in nature and that none of the Underwriters or their
affiliates or any selling agent shall be deemed to be acting in a
fiduciary capacity, or otherwise owes any fiduciary duty to the
Company or any of its affiliates in connection with the Offering
and the other transactions contemplated by this
Agreement.
3.17 Company
Lock-Up Agreements.
3.17.1. Restriction
on Sales of Capital Stock. The Company, on behalf of itself
and any successor entity, agrees that, without the prior written
consent of the Representative, it will not, for a period of ninety
(90) days after the date of this Agreement (the “Lock-Up Period”), (a) offer,
pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer
or dispose of, directly or indirectly, any shares of capital stock
of the Company or any securities convertible into or exercisable or
exchangeable for shares of capital stock of the Company, (b) file
or cause to be filed any registration statement with the Commission
relating to the offering of any shares of capital stock of the
Company or any securities convertible into or exercisable or
exchangeable for shares of capital stock of the Company (except for
registration statements on Form S-4 or Form S-8) or (c) enter into
any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences of ownership of
capital stock of the Company, whether any such transaction
described in clause (a), (b) or (c) above is to be settled by
delivery of shares of capital stock of the Company or such other
securities, in cash or otherwise. The restrictions contained in
this Section 3.17.1
shall not apply to (A) sales of shares of capital stock of the
Company under any trading plan pursuant to Rule 10b5-1 under the
Securities Exchange Act of 1934, as amended, existing as of the
date of this Agreement or (B) dispositions or transfers of
shares of capital stock of the Company customarily excluded from
lock-up restrictions of this type. The restrictions contained in
this Section 3.17.1
shall not apply to (i) the Shares to be sold hereunder, (ii) the
issuance by the Company of shares of capital stock of the Company
upon the exercise of a stock option or warrant or the conversion or
vesting of a security outstanding on the date hereof, (iii) the
issuance by the Company of equity awards of the Company under any
equity compensation plan of the Company, (iv) the issuance by the
Company of shares of capital stock of the Company or securities
convertible into, exchangeable for or that represent the right to
receive shares of capital stock of the Company in connection with
the acquisition by the Company of the securities, business,
technology, property or other assets of another person or entity,
(v) the sale of shares of capital stock of the Company to cover the
payment of exercise prices or the payment of taxes associated with
the exercise or vesting of equity awards under any equity
compensation plan of the Company, (vi) the issuance by the
Company of the investor notes described in the Registration
Statement, Pricing Disclosure Package and the Prospectus (the
“Investor Notes”), and the shares of Class B Common
Stock underlying the Investor Notes, (vii) the issuance by the
Company of the 6.75% Convertible Senior Notes due 2025 described in
the Registration Statement, Pricing Disclosure Package and the
Prospectus (the “Notes”), and the shares of Class B
Common Stock underlying the Notes (the “Note Shares”),
(viii) the filing of a resale registration statement by the
Company for the Notes and the Note Shares, or (ix) the filing of a
post-effective amendment to the Company’s registration
statements on Form S-3 (Reg. Nos. 333-234340, 333-231631,
333-233399, 333-223425, 333-225217, 333-226514, 333-228483 and
333-231884) and Form S-8 (Reg. Nos. 333-219203, 333-223428 and
333-226440) with the Commission to maintain effectiveness of such
registration statements, provided that in each of (ii) and (iii)
above, the underlying shares of capital stock of the Company shall
be restricted from sale during the entire Lock-Up
Period.
3.17.2. Restriction
on Continuous Offerings. Notwithstanding the restrictions
contained in Section
3.17.1, the Company, on behalf of itself and any successor
entity, agrees that, without the prior written consent of the
Representative, it will not, for a period of twelve (12) months
after the date of this Agreement, directly or indirectly in any
“at-the-market” or continuous equity transaction, offer
to sell, sell, contract to sell, grant any option to sell or
otherwise dispose of shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for
shares of capital stock of the Company.
3.18 Release
of Lock-up Period. If the Representative, in its sole
discretion, agrees to release or waive the restrictions set forth
in the Lock-Up Agreements described in Section 2.24 for an officer or
director of the Company and provide the Company with notice of the
impending release or waiver at least three (3) Business Days before
the effective date of the release or waiver, the Company agrees to
announce the impending release or waiver by a press release
substantially in the form of Exhibit B hereto through a
major news service at least two (2) Business Days before the
effective date of the release or waiver.
3.19 Blue
Sky Qualifications. The Company shall use its best efforts,
in cooperation with the Representative, if necessary, to qualify
the Shares for offering and sale under the applicable securities
laws of such states and other jurisdictions (domestic or foreign)
as the Representative may designate and to maintain such
qualifications in effect so long as required to complete the
distribution of the Shares; provided, however, that the Company
shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or
to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
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3.20 Reporting
Requirements. The Company, during the period when a
prospectus relating to the Shares is (or, but for the exception
afforded by Rule 172, would be) required to be delivered under the
Securities Act, will file all documents required to be filed with
the Commission pursuant to the Exchange Act within the time periods
required by the Exchange Act and Exchange Act Regulations.
Additionally, the Company shall report the use of proceeds from the
issuance of the Shares as may be required under Rule 463 under the
Securities Act Regulations.
4. Conditions of Underwriters’
Obligations. The obligations of the Underwriters to purchase
and pay for the Shares, as provided herein, shall be subject to (i)
the continuing accuracy of the representations and warranties of
the Company as of the date hereof, as of the Closing Date and each
Option Closing Date, as applicable; (ii) the accuracy of the
statements of officers of the Company made pursuant to the
provisions hereof; (iii) the performance by the Company of its
obligations hereunder; and (iv) the following
conditions:
4.1 Regulatory
Matters.
4.1.1. Effectiveness
of Registration Statement; Rule 430A Information. The Registration Statement is effective under
the Securities Act, no stop order suspending the effectiveness of
the Registration Statement or any post-effective amendment thereto
has been issued under the Securities Act, no order preventing or
suspending the use of the Base Prospectus, any Preliminary Prospectus, the
Prospectus or any part thereof shall have been issued and no
proceedings for that purpose or pursuant to Section 8A under the
Securities Act shall have been initiated or threatened by the
Commission, and all requests for additional information on the part
of the Commission (to be included or incorporated by reference in
the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the reasonable satisfaction of the
Representative; and the Rule 462(b) Registration Statement, if any,
and the Prospectus shall have been filed with the Commission within
the applicable time period prescribed for such filing by, and in
compliance with, the Rules and Securities Act Regulations and in
accordance with Section 3.2
and the Rule 462(b) Registration
Statement, if any, shall have become effective immediately upon its
filing with the Commission. The Prospectus containing the Rule 430A
Information shall have been filed with the Commission in the manner
and within the time frame required by Rule 424(b) (without reliance
on Rule 424(b)(8)) or a post-effective amendment providing such
information shall have been filed with, and declared effective by,
the Commission in accordance with the requirements of Rule
430A.
4.1.2. FINRA
Clearance. On or before the date of this Agreement, the
Representative shall have received clearance from FINRA as to the
amount of compensation allowable or payable to the Underwriters as
described in the Registration Statement.
4.1.3. Exchange
Stock Market Clearance. On the Closing Date and each Option
Closing Date, the Company’s shares of Class B Common Stock,
including the Shares, shall have been approved for listing on the
Exchange, subject only to official notice of issuance.
4.2 Company Counsel
Matters.
4.2.1. Closing
Date Opinion of Company Counsel. On the Closing Date and
each Option Closing Date, the Representative shall have received
(i) the favorable opinion and negative assurance letter of Akerman
LLP, counsel to the Company (“Company Counsel”), and (ii) the
favorable opinion of Snell & Wilmer L.L.P., Nevada counsel to
the Company (“Nevada
Counsel”), in each case, dated the Closing Date and
each Option Closing Date, as applicable, and addressed to the
Representative in form and substance reasonably satisfactory to the
Representative.
4.2.2. Reliance.
In rendering its opinion, Company Counsel and Nevada Counsel may
rely: (i) as to matters involving the application of laws
other than the laws of the United States and jurisdictions in which
it is admitted, to the extent Company Counsel or Nevada Counsel
deems proper and to the extent specified in such opinion, if at
all, upon an opinion or opinions (in form and substance reasonably
satisfactory to the Representative) of other counsel reasonably
acceptable to the Representative, familiar with the applicable
laws; and (ii) as to matters of fact, to the extent they deem
proper, on certificates or other written statements of officers of
the Company and officers of departments of various jurisdictions
having custody of documents respecting the corporate existence or
good standing of the Company, provided that copies of any such
statements or certificates shall be delivered to
Underwriters’ Counsel if requested. The opinion of Company
Counsel and any opinion relied upon by Company Counsel shall
include a statement to the effect that it may be relied upon by
Underwriters’ Counsel in its opinion delivered to the
Underwriters.
17
4.3 Comfort Letters.
4.3.1. Cold
Comfort Letter. At the time this Agreement is executed the
Representative shall have received a cold comfort letter containing
statements and information of the type customarily included in
accountants’ comfort letters with respect to the financial
statements and certain financial information contained in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, addressed to the Representative and in form and
substance satisfactory in all respects to the Representative and to
the Auditor, dated as of the date of this Agreement.
4.3.2. Bring-down
Comfort Letter. At the Closing Date and each Option Closing
Date, the Representative shall have received from the Auditor a
letter, dated as of the Closing Date or such Option Closing Date,
as applicable, to the effect that the Auditor reaffirms the
statements made in the letter furnished pursuant to Section 4.3.1, except that the
specified date referred to shall be a date not more than three (3)
Business Days prior to the Closing Date or Option Closing Date, as
applicable.
4.4 Officers’
Certificates.
4.4.1. Officers’
Certificate. The Company shall have furnished to the
Representative a certificate, dated the Closing Date and each
Option Closing Date, as applicable, of its Chief Executive Officer
and Chairman and its Chief Financial Officer stating that (i) such
officers have carefully examined the Registration Statement, the
Pricing Disclosure Package and the Prospectus and, in their
opinion, the Registration Statement and each amendment thereto, as
of the Applicable Time and as of the Closing Date or such Option
Closing Date, as applicable, did not include any untrue statement
of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and the Pricing Disclosure Package, as of
the Applicable Time and as of the Closing Date and such Option
Closing Date, as applicable, the Prospectus and each amendment or
supplement thereto, as of the respective date thereof and as of the
Closing Date or Option Closing Date, as applicable, did not include
any untrue statement of a material fact and did not omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances in which they were made, not
misleading, (ii) since the effective date of the Registration
Statement, no event has occurred which should have been set forth
in a supplement or amendment to the Registration Statement, the
Pricing Disclosure Package or the Prospectus, (iii) as of the
Closing Date or such Option Closing Date, as applicable, the
representations and warranties of the Company in this Agreement are
true and correct in all material respects and the Company has
complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the
Closing Date or such Option Closing Date, as applicable, and (iv)
there has not been, subsequent to the date of the most recent
audited financial statements included or incorporated by reference
in the Pricing Disclosure Package, any material adverse change in
the financial position or results of operations of the Company, or
any change or development that, singularly or in the aggregate,
would involve a material adverse change or a prospective material
adverse change, in or affecting the condition (financial or
otherwise), results of operations, business, assets or prospects of
the Company, except as set forth in the Prospectus.
4.4.2. Secretary’s
Certificate. At the Closing Date and each Option Closing
Date, the Representative shall have received a certificate of the
Company signed by the Secretary of the Company, dated the Closing
Date or such Option Closing Date, as applicable, certifying:
(i) that each of the Charter and the Bylaws is true and
complete, has not been modified and is in full force and effect;
(ii) that the resolutions of the Company’s Board of
Directors relating to the Offering are in full force and effect and
have not been modified; (iii) as to the accuracy and completeness
of all correspondence between the Company or Company Counsel and
the Commission; and (iv) as to the incumbency of the officers
of the Company. The documents referred to in such certificate shall
be attached to such certificate.
4.5 No Material Changes. Prior to
and on the Closing Date and each Option Closing Date:
(i) there shall have been no Material Adverse Change or
development involving a prospective material adverse change in the
condition or prospects or the business activities, financial or
otherwise, of the Company from the latest dates as of which such
condition is set forth in the Registration Statement, the Pricing
Disclosure Package and the Prospectus; (ii) no action, suit or
proceeding, at law or in equity, shall have been pending or
threatened against the Company or any officer, director or
beneficial owner of 10% or more of any class of the Company’s
securities before or by any court or federal or state commission,
board or other administrative agency wherein an unfavorable
decision, ruling or finding may materially adversely affect the
business, operations, prospects or financial condition or income of
the Company, except as set forth in the Registration Statement, the
Pricing Disclosure Package and the Prospectus; (iii) no stop
order shall have been issued under the Securities Act and no
proceedings therefor shall have been initiated or threatened by the
Commission; and (iv) the Registration Statement, the Pricing
Disclosure Package and the Prospectus and any amendments or
supplements thereto shall contain all material statements which are
required to be stated therein in accordance with the Securities Act
and the Securities Act Regulations and shall conform in all
material respects to the requirements of the Securities Act and the
Securities Act Regulations, and neither the Registration Statement,
the Pricing Disclosure Package nor the Prospectus nor any amendment
or supplement thereto shall contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
4.6 Delivery of
Agreements. On
or before the date of this Agreement, the Company shall have
delivered to the Representative executed copies of the Lock-Up
Agreements from each of the persons listed in Schedule 3 hereto.
4.7 Additional Documents. At the
Closing Date and each Option Closing Date, Underwriters’
Counsel shall have been furnished with such documents and opinions
as they may require for the purpose of enabling Underwriters’
Counsel to deliver an opinion to the Representative, or in order to
evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and
all proceedings taken by the Company in connection with the
issuance and sale of the Shares as herein contemplated shall be
satisfactory in form and substance to the Representative and
Underwriters’ Counsel.
18
5.
Indemnification.
5.1 Indemnification of the
Underwriters.
5.1.1. General.
Subject to the conditions set forth below, the Company agrees to
indemnify and hold harmless the Representative, the Underwriters,
their affiliates and each of their respective directors, officers,
members, employees, representatives, partners, shareholders,
affiliates, counsel, and agents and each person, if any, who
controls each Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively the
“Underwriter Indemnified
Parties,” and each an “Underwriter Indemnified Party”),
against any and all loss, liability, claim, damage and expense
whatsoever (including but not limited to any and all legal or other
expenses reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any
claim whatsoever, whether arising out of any action between any of
the Underwriter Indemnified Parties and the Company or between any
of the Underwriter Indemnified Parties and any third party, or
otherwise) to which they or any of them may become subject under
the Securities Act, the Exchange Act or any other statute or at
common law or otherwise or under the laws of foreign countries (a
“Claim”), (i)
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in (A) the Registration
Statement, the Pricing Disclosure Package, any Preliminary
Prospectus, the Prospectus, or in any Written Testing-the-Waters
Communication (as from time to time each may be amended and
supplemented); (B) any materials or information provided to
investors by, or with the approval of, the Company in connection
with the marketing of the Offering, including any “road
show” or investor presentations made to investors by the
Company; or (C) any application or other document or written
communication (in this Section 5, collectively called
“application”)
executed by the Company or based upon written information furnished
by the Company in any jurisdiction in order to qualify the Shares
under the securities laws thereof or filed with the Commission, any
state securities commission or agency, the Exchange or any other
national securities exchange; or the omission or alleged omission
therefrom of a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, unless
such statement or omission was made in reliance upon, and in
conformity with, the Underwriter’s Information, or (ii)
otherwise arising in connection with or allegedly in connection
with the Offering. The Company also agrees that it will reimburse
each Underwriter Indemnified Party for all fees and expenses
(including but not limited to any and all legal or other expenses
reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim
whatsoever, whether arising out of any action between any of the
Underwriter Indemnified Parties and the Company or between any of
the Underwriter Indemnified Parties and any third party, or
otherwise) (collectively, the “Expenses”), and further agrees
wherever and whenever possible to advance payment of Expenses as
they are incurred by an Underwriter Indemnified Party in
investigating, preparing, pursuing or defending any
Claim.
5.1.2. Procedure. If
any action is brought against an Underwriter Indemnified Party in
respect of which indemnity may be sought against the Company
pursuant to Section
5.1.1, such Underwriter Indemnified Party shall promptly
notify the Company in writing of the institution of such action and
the Company shall assume the defense of such action, including the
employment and fees of counsel (subject to the approval of such
Underwriter Indemnified Party) and payment of actual expenses if an
Underwriter Indemnified Party requests that the Company do so. Such
Underwriter Indemnified Party shall have the right to employ its or
their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the Company, and shall be
advanced by the Company. The Company shall not be liable for any
settlement of any action effected without its consent (which shall
not be unreasonably withheld). In addition, the Company shall not,
without the prior written consent of the Representative, settle,
compromise or consent to the entry of any judgment in or otherwise
seek to terminate any pending or threatened action in respect of
which advancement, reimbursement, indemnification or contribution
may be sought hereunder (whether or not such Underwriter
Indemnified Party is a party thereto) unless such settlement,
compromise, consent or termination (i) includes an unconditional
release of each Underwriter Indemnified Party, acceptable to such
Underwriter Indemnified Party, from all liabilities, expenses and
claims arising out of such action for which indemnification or
contribution may be sought 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 Underwriter Indemnified Party.
5.2 Indemnification of the Company.
The Underwriters, severally and not jointly, agree to indemnify and
hold harmless the Company, its directors, its officers who signed
the Registration Statement and persons who control the Company
within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act against any and all loss, liability, claim,
damage and expense described in the foregoing indemnity from the
Company to the Underwriters, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or
omissions made in the Registration Statement, any Preliminary
Prospectus, the Pricing Disclosure Package or Prospectus or any
amendment or supplement thereto or in any application, in reliance
upon, and in strict conformity with, the Underwriter’s
Information. In case any action shall be brought against the
Company or any other person so indemnified based on any Preliminary
Prospectus, the Registration Statement, the Pricing Disclosure
Package or Prospectus or any amendment or supplement thereto or any
application, and in respect of which indemnity may be sought
against the Underwriters, the Underwriters shall have the rights
and duties given to the Company, and the Company and each other
person so indemnified shall have the rights and duties given to the
Underwriters by the provisions of Section 5.1.2. The Company
agrees promptly to notify the Underwriters of the commencement of
any litigation or proceedings against the Company or any of its
officers, directors or any person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, in connection with the issuance and sale of
the Shares or in connection with the Registration Statement, the
Pricing Disclosure Package, the Prospectus, or any Written
Testing-the-Waters Communication.
19
5.3 Contribution.
5.3.1. Contribution
Rights. If the indemnification provided for in this
Section 5 shall for
any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 5.1 or 5.2 in respect of any loss,
claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid
or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative
benefits received by the Company, on the one hand, and the
Underwriters, on the other, from the Offering of the Shares, or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one hand,
and the Underwriters, on the other, with respect to the statements
or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received
by the Company, on the one hand, and the Underwriters, on the
other, with respect to such Offering shall be deemed to be in the
same proportion as the total net proceeds from the Offering of the
Shares purchased under this Agreement (before deducting expenses)
received by the Company, as set forth in the table on the cover
page of the Prospectus, on the one hand, and the total underwriting
discounts and commissions received by the Underwriters with respect
to the shares of the Class B Common Stock purchased under this
Agreement, as set forth in the table on the cover page of the
Prospectus, on the other hand. The relative fault shall be
determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the
Company or the Representative, the intent of the parties and their
relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 5.3.1 were to be
determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this
Section 5.3.1 shall
be deemed to include, for purposes of this Section 5.3.1, 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 Section 5.3.1 in no event shall
any Underwriter be required to contribute any amount in excess of
the amount by which the total underwriting discounts and
commissions received by such Underwriter with respect to the
Offering of the Shares exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such
fraudulent misrepresentation.
5.3.2. Contribution
Procedure. Within fifteen (15) days after receipt by any
party to this Agreement (or its representative) of notice of the
commencement of any action, suit or proceeding, such party will, if
a claim for contribution in respect thereof is to be made against
another party (“contributing
party”), notify the contributing party of the
commencement thereof, but the failure to so notify the contributing
party will not relieve it from any liability which it may have to
any other party other than for contribution hereunder. In case any
such action, suit or proceeding is brought against any party, and
such party notifies a contributing party or its representative of
the commencement thereof within the aforesaid fifteen (15) days,
the contributing party will be entitled to participate therein with
the notifying party and any other contributing party similarly
notified. Any such contributing party shall not be liable to any
party seeking contribution on account of any settlement of any
claim, action or proceeding affected by such party seeking
contribution on account of any settlement of any claim, action or
proceeding affected by such party seeking contribution without the
written consent of such contributing party. The contribution
provisions contained in this Section 5.3.2 are intended to
supersede, to the extent permitted by law, any right to
contribution under the Securities Act, the Exchange Act or
otherwise available. Each Underwriter’s obligations to
contribute pursuant to this Section 5.3 are several and not
joint.
6.
Reserved.
20
7.
Additional
Covenants.
7.1 Board Composition and Board
Designations. The Company shall ensure that: (i) the
qualifications of the persons serving as members of the Board of
Directors and the overall composition of the Board of Directors
comply with the Sarbanes-Oxley Act, with the Exchange Act and with
the listing rules of the Exchange or any other national securities
exchange, as the case may be, in the event the Company seeks to
have its Shares listed on another exchange or quoted on an
automated quotation system, subject to any applicable cure period,
and (ii) if applicable, at least one member of the Audit
Committee of the Board of Directors qualifies as an “audit
committee financial expert,” as such term is defined under
Regulation S-K and the listing rules of the Exchange.
7.2 Prohibition on Press Releases and
Public Announcements. Prior to the last Option Closing Date,
the Company shall not issue any press release or other
communication directly or indirectly or hold any press conference
with respect to the Company, its condition, financial or otherwise,
or earnings, business affairs or business prospects (except for
routine oral marketing communications in the ordinary course of
business and consistent with the past practices of the Company and
of which the Representative is notified), without the prior written
consent of the Representative, unless in the judgment of the
Company and its counsel, and after notification to the
Representative, such press release or communication is required by
law or applicable Exchange rules.
8.
Effective Date of this Agreement and
Termination Thereof.
8.1 Effective Date. This Agreement
shall become effective when both the Company and the Representative
have executed the same and delivered counterparts of such
signatures to the other party.
8.2 Termination. The Representative
shall have the right to terminate this Agreement at any time prior
to the Closing Date, (i) if any domestic or international
event or act or occurrence has materially disrupted, or in the
Representative’s opinion will in the immediate future
materially disrupt, general securities markets in the United
States; or (ii) if trading on the New York Stock Exchange or
NASDAQ shall have been suspended or materially limited, or minimum
or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required by FINRA
or by order of the Commission or any other government authority
having jurisdiction; or (iii) if the United States shall have
become involved in a new war or an increase in major hostilities;
or (iv) if a banking moratorium has been declared by a New
York State or federal authority; or (v) if a moratorium on
foreign exchange trading has been declared which materially
adversely impacts the United States securities markets; or
(vi) if the Company shall have sustained a material loss by
fire, flood, accident, hurricane, earthquake, theft, sabotage or
other calamity or malicious act which, whether or not such loss
shall have been insured, will, in the Representative’s
opinion, make it inadvisable to proceed with the delivery of the
Shares; or (vii) if the Company is in material breach of any
of its representations, warranties or covenants hereunder; or
(viii) if the Representative shall have become aware after the
date hereof of such a material adverse change in the conditions or
prospects of the Company, or such adverse material change in
general market conditions as in the Representative’s judgment
would make it impracticable to proceed with the offering, sale
and/or delivery of the Shares or to enforce contracts made by the
Underwriters for the sale of the Shares.
21
8.3 Expenses. Notwithstanding
anything to the contrary in this Agreement, in the event that this
Agreement shall not be carried out for any reason whatsoever,
within the time specified herein or any extensions thereof pursuant
to the terms herein, the Company shall be obligated to pay to the
Representative its reasonable accountable out-of-pocket expenses
related to the transactions contemplated herein then due and
payable (including the fees and disbursements of
Underwriters’ Counsel) up to $75,000 and upon demand the
Company shall pay the full amount thereof to the Representative on
behalf of the Underwriters; provided, however, that such expense
cap in no way limits or impairs the indemnification and
contribution provisions of this Agreement. Notwithstanding the
foregoing, any advance received by the Representative will be
reimbursed to the Company to the extent not actually incurred in
compliance with FINRA Rule 5110(f)(2)(C).
8.4 Indemnification.
Notwithstanding any contrary provision contained in this Agreement,
any election hereunder or any termination of this Agreement, and
whether or not this Agreement is otherwise carried out, the
provisions of Section
5 shall remain in full force and effect and shall not be in
any way affected by, such election or termination or failure to
carry out the terms of this Agreement or any part
hereof.
8.5 Representations, Warranties,
Agreements to Survive. All representations, warranties and
agreements contained in this Agreement or in certificates of
officers of the Company submitted pursuant hereto, shall remain
operative and in full force and effect regardless of (i) any
investigation made by or on behalf of any Underwriter or its
affiliates or selling agents, any person controlling any
Underwriter, its officers or directors or any person controlling
the Company or (ii) delivery of and payment for the
Shares.
9.
Miscellaneous.
9.1 Notices. All communications
hereunder, except as herein otherwise specifically provided, shall
be in writing and shall be mailed (registered or certified mail,
return receipt requested), personally delivered or sent by
facsimile transmission and confirmed and shall be deemed given when
so delivered or faxed and confirmed or if mailed, two (2) days
after such mailing.
If to
the Representative:
National Securities
Corporation
200
Vesey Street, 25th Floor
New
York, New York 10281
Attn:
Jonathan C. Rich
Email:
jrich@yournational.com
Fax No:
(212) 380-2828
with a
copy (which shall not constitute notice) to:
McGuireWoods
LLP
1251
Avenue of the Americas, 20th Floor
New
York, NY 10020
Attention: Stephen
Older, Esq. and Rakesh Gopalan, Esq.
Email:
solder@mcguirewoods.com and rgopalan@mcguirewoods.com
Fax No:
(212) 715-2307
22
If to
the Company:
RumbleOn,
Inc.
901
West Walnut Hill Lane
Irving,
Texas 75038
Attention: Marshall
Chesrown, Chairman and Chief Executive Officer
Steven
R. Berrard, Chief Financial Officer
Fax No:
704-980-0038
with a
copy (which shall not constitute notice) to:
Akerman
LLP
350
East Las Olas Boulevard, Suite 1600
Fort
Lauderdale, FL 33301
Attention: Michael
Francis, Esq.
Email:
michael.francis@akerman.com
Fax No:
(954) 463-2224
9.2 Headings. The headings
contained herein are for the sole purpose of convenience of
reference, and shall not in any way limit or affect the meaning or
interpretation of any of the terms or provisions of this
Agreement.
9.3 Amendment. This Agreement may
only be amended by a written instrument executed by each of the
parties hereto.
9.4 Entire Agreement. This
Agreement (together with the other agreements and documents being
delivered pursuant to or in connection with this Agreement)
constitutes the entire agreement of the parties hereto with respect
to the subject matter hereof and thereof, and supersedes all prior
agreements and understandings of the parties, oral and written,
with respect to the subject matter hereof. Notwithstanding anything
to the contrary set forth herein, it is understood and agreed by
the parties hereto that all other terms and conditions of that
certain engagement letter between the Company and National
Securities Corporation dated February 5, 2019, shall remain in full
force and effect.
9.5 Binding Effect. This Agreement
shall inure solely to the benefit of and shall be binding upon the
Representative, the Underwriters, the Company and the controlling
persons, directors and officers referred to in Section 5, and their respective
successors, legal representative, heirs and assigns, and no other
person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of or by virtue of this
Agreement or any provisions herein contained. The term
“successors and assigns” shall not include a purchaser,
in its capacity as such, of securities from the
Underwriters.
9.6 Governing Law; Consent to
Jurisdiction; Trial by Jury. This Agreement shall be
governed by and construed and enforced in accordance with the laws
of the State of New York, without giving effect to conflict of laws
principles thereof. The Company hereby agrees that any action,
proceeding or claim against it arising out of, or relating in any
way to this Agreement shall be brought and enforced in state and
federal courts located in the Borough of Manhattan in the City of
New York, and irrevocably submits to such jurisdiction, which
jurisdiction shall be exclusive. The Company hereby waives any
objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum. Any such process or summons to be
served upon the Company may be served by transmitting a copy
thereof by registered or certified mail, return receipt requested,
postage prepaid, addressed to it at the address set forth in
Section 9.1. Such
mailing shall be deemed personal service and shall be legal and
binding upon the Company in any action, proceeding or claim. The
Company agrees that the prevailing party(ies) in any such action
shall be entitled to recover from the other party(ies) all of its
reasonable attorneys’ fees and expenses relating to such
action or proceeding and/or incurred in connection with the
preparation therefor. The Company (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and
affiliates) and the Underwriters 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.
9.7 Execution in Counterparts. This
Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which
shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of
the parties hereto and delivered to each of the other parties
hereto. Delivery of a signed counterpart of this Agreement by
facsimile or email/pdf transmission shall constitute valid and
sufficient delivery thereof.
9.8 Waiver, etc. The failure of any
of the parties hereto to at any time enforce any of the provisions
of this Agreement shall not be deemed or construed to be a waiver
of any such provision, nor to in any way effect the validity of
this Agreement or any provision hereof or the right of any of the
parties hereto to thereafter enforce each and every provision of
this Agreement. No waiver of any breach, non-compliance or
non-fulfillment of any of the provisions of this Agreement shall be
effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver
is sought; and no waiver of any such breach, non-compliance or
non-fulfillment shall be construed or deemed to be a waiver of any
other or subsequent breach, non-compliance or
non-fulfillment.
[Signature
Page Follows]
23
If the
foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space
provided below for that purpose, whereupon this letter shall
constitute a binding agreement between us.
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Very truly
yours,
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RUMBLEON, INC. |
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By:
|
/s/ Marshall
Chesrown
|
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Name:
Marshall
Chesrown
|
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Title:
Chairman and
CEO
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Confirmed as of the
date first written above mentioned:
NATIONAL SECURITIES CORPORATION
as
Representative of the several Underwriters
|
By: /s/ Jonathan C.
Rich
|
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Name:
Jonathan C. Rich
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Title:
Executive Vice President Head
of Investment Banking
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[Signature Page]
RUMBLEON, INC. – Underwriting Agreement
24
SCHEDULE 1-A
Underwriters
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Name of Underwriter
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Number of Firm Shares
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National
Securities Corporation
|
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17,100,000
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Maxim
Group LLC
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900,000
|
25
SCHEDULE 1-B
Pricing Information
Number
of Shares: 18,000,000
Public
Offering Price per Share: $0.57
Underwriting
Discount per Share: $0.0456
Proceeds
to Company per Share (before expenses): $0.5244
26
SCHEDULE 2
Written Testing-the-Waters Communications
None.
27
SCHEDULE 3
List of Lock-Up Parties
Marshall
Chesrown
Steven
R. Berrard
Denmar
Dixon
Kartik
Kakarala
Kevin
Westfall
Richard
A. Gray
Halcyon
Consulting, LLC
Berrard
Holdings Limited Partnership
Blue
Flame Capital, LLC
28
EXHIBIT A
Form of Lock-Up Agreement
January
__, 2020
National
Securities Corporation
As
Representative of the Several Underwriters
200
Vesey Street, 25th Floor
New
York, New York 10281
Ladies
and Gentlemen:
The
undersigned understands that National Securities Corporation
(hereinafter referred to as the “Representative”) and with the
other underwriters named on Schedule 1-A to the
Underwriting Agreement (as defined below) for which the
Representative is acting as representative (the Representative and
such other underwriters being collectively called the
“Underwriters”
or, individually, an “Underwriter”) proposes to enter
into an Underwriting Agreement (the “Underwriting Agreement”) with
RumbleOn, Inc., a Nevada corporation (the “Company”), providing for the
public offering (the “Public
Offering”) of shares of Class B Common Stock, par
value $0.001 per share, of the Company (the “Shares”).
To
induce the Underwriters to continue their efforts in connection
with the Public Offering, the undersigned hereby agrees that,
without the prior written consent of the Representative, the
undersigned will not, during the period commencing on the date
hereof and ending ninety (90) days after the date of the final
prospectus (the “Prospectus”) relating to the
Public Offering (the “Lock-Up
Period”), (1) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly,
any shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for shares of
capital stock of the Company, whether now owned or hereafter
acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition
(collectively, the “Lock-Up
Securities”); (2) enter into any swap or other
arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of Lock-Up Securities,
whether any such transaction is to be settled by delivery of shares
of Lock-Up Securities, in cash or otherwise; (3) make any demand
for or exercise any right with respect to the registration of any
Lock-Up Securities; or (4) publicly disclose the intention to make
any offer, sale, pledge or disposition, or to enter into any
transaction, swap, hedge or other arrangement relating to any
Lock-Up Securities. Notwithstanding the foregoing, and subject to
the conditions below, the undersigned may transfer Lock-Up
Securities without the prior written consent of the Representative
in connection with (a) transactions relating to Lock-Up Securities
acquired in open market transactions after the completion of the
Public Offering; provided
that no filing under Section 16(a) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), shall be required
or shall be voluntarily made in connection with subsequent sales of
Lock-Up Securities acquired in such open market transactions; (b)
transfers of Lock-Up Securities as a bona fide gift, by will or intestacy or
to a family member or trust for the benefit of a family member (for
purposes of this lock-up agreement, “family member”
means any relationship by blood, marriage or adoption, not more
remote than first cousin); (c) transfers of Lock-Up Securities to a
charity or educational institution; (d) if the undersigned,
directly or indirectly, controls a corporation, partnership,
limited liability company or other business entity, any transfers
of Lock-Up Securities to any shareholder, partner or member of, or
owner of similar equity interests in, the undersigned, as the case
may be, or (e) the sales of Shares to cover the payment of the
exercise prices or the payment of taxes associated with the
exercise or vesting of equity awards under any equity compensation
plan of the Company; provided that in the case of any
transfer pursuant to the foregoing clauses (b), (c) or (d),
(i) any such transfer shall not involve a disposition for value,
(ii) each transferee shall sign and deliver to the Representative a
lock-up agreement substantially in the form of this lock-up
agreement and (iii) no filing under Section 16(a) of the
Exchange Act shall be required or shall be voluntarily made, except
for a Form 5. 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
Lock-Up Securities except in compliance with this lock-up
agreement.
29
If the
undersigned is an officer or director of the Company, (i) the
undersigned agrees that the foregoing restrictions shall be equally
applicable to any issuer-directed or “friends and
family” Shares that the undersigned may purchase in the
Public Offering; (ii) the Representative agrees that, at least
three (3) Business Days (as that term is defined in the
Underwriting Agreement) before the effective date of any release or
waiver of the foregoing restrictions in connection with a transfer
of Lock-Up Securities, the Representative will notify the Company
of the impending release or waiver; and (iii) the Company has
agreed in the Underwriting Agreement to announce the impending
release or waiver by press release through a major news service at
least two (2) Business Days before the effective date of the
release or waiver. Any release or waiver granted by the
Representative hereunder to any such officer or director shall only
be effective two (2) Business Days after the publication date of
such press release. The provisions of this paragraph will not apply
if (a) the release or waiver is effected solely to permit a
transfer of Lock-Up Securities not for consideration and (b) the
transferee has agreed in writing to be bound by the same terms
described in this lock-up agreement to the extent and for the
duration that such terms remain in effect at the time of such
transfer.
No
provision in this agreement shall be deemed to restrict or prohibit
the exercise, exchange or conversion by the undersigned of any
securities exercisable or exchangeable for or convertible into
Shares, as applicable; provided that the undersigned does not
transfer the Shares acquired on such exercise, exchange or
conversion during the Lock-Up Period, unless otherwise permitted
pursuant to the terms of this lock-up agreement. In addition, no
provision herein shall be deemed to restrict or prohibit the entry
into or modification of a so-called “10b5-1” plan at
any time (other than the entry into or modification of such a plan
in such a manner as to cause the sale of any Lock-Up Securities
within the Lock-Up Period).
The
undersigned understands that the Company and the Underwriters are
relying upon this lock-up agreement in proceeding toward
consummation of the Public Offering. The undersigned further
understands that this lock-up agreement is irrevocable and shall be
binding upon the undersigned’s heirs, legal representative,
successors and assigns.
The
undersigned understands that, if the Underwriting Agreement is not
executed by January 31, 2020, or if the Underwriting Agreement
(other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the
Shares to be sold thereunder, then this lock-up agreement shall be
void and of no further force or effect.
Whether
or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only
be made pursuant to an Underwriting Agreement, the terms of which
are subject to negotiation between the Company and the
Underwriters.
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Very truly
yours,
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_______________________________________________
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(Name - Please
Print)
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_______________________________________________
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(Signature)
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_______________________________________________
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(Name of Signatory,
in the case of entities - Please Print)
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_______________________________________________
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(Title of
Signatory, in the case of entities - Please Print)
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Address:
_________________________________
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_________________________________
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_________________________________
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30
EXHIBIT B
Form of Press Release
RUMBLEON, INC.
[Date]
RumbleOn,
Inc. (the “Company”) announced today that National
Securities Corporation acting as representative of the Underwriters
for the Company’s recent public offering of [___] shares
of the Company’s Class B Common Stock, is [waiving]
[releasing] a lock-up restriction with respect to
_________ shares of the Company’s Class B Common Stock
[and _________ shares of the Company’s Class A Common
Stock] held by [certain officers or directors] [an officer or
director] of the Company. The [waiver] [release] will take
effect on _________, 20___, and the shares may be sold on or
after such date.
This press release is not an offer or sale of the securities in the
United States or in any other jurisdiction where such offer or sale
is prohibited, and such securities may not be offered or sold in
the United States absent registration or an exemption from
registration under the Securities Act of 1933, as
amended.
31
SCHEDULE 2.25
RMBL
Tennessee, LLC was converted into RumbleOn Dealers, Inc. in
September 2019.
32
Exhibit 4.1
RUMBLEON, INC.
AND
WILMINGTON TRUST, NATIONAL ASSOCIATION
as Trustee
INDENTURE
Dated as of January 14, 2020
6.75% Convertible Senior Notes due 2025
TABLE OF CONTENTS
Page
|
Article
1 DEFINITIONS
|
1
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|
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Section
1.01
|
Definitions
|
1
|
|
Section
1.02
|
References to Interest
|
15
|
|
Article 2 ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE
OF NOTES
|
16
|
|
|
Section
2.01
|
Designation and Amount
|
16
|
|
Section
2.02
|
Form of Notes
|
16
|
|
Section
2.03
|
Date and Denomination of Notes; Payments of Interest and Defaulted
Amounts
|
17
|
|
Section
2.04
|
Execution, Authentication and Delivery of Notes
|
18
|
|
Section
2.05
|
Exchange and Registration of Transfer of Notes; Restrictions on
Transfer; Depositary
|
19
|
|
Section
2.06
|
Mutilated, Destroyed, Lost or Stolen Notes
|
25
|
|
Section
2.07
|
Temporary Notes
|
26
|
|
Section
2.08
|
Cancellation of Notes Paid, Converted, Etc
|
26
|
|
Section
2.09
|
CUSIP Numbers
|
26
|
|
Section
2.10
|
Repurchases
|
26
|
|
Article
3 SATISFACTION AND DISCHARGE
|
27
|
|
|
Section
3.01
|
Satisfaction and Discharge
|
27
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|
Article 4 PARTICULAR COVENANTS OF THE COMPANY
|
27
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|
Section
4.01
|
Payment of Principal and Interest
|
27
|
|
Section
4.02
|
Maintenance of Office or Agency
|
27
|
|
Section
4.03
|
Appointments to Fill Vacancies in Trustee’s
Office
|
28
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|
Section
4.04
|
Provisions as to Paying Agent
|
28
|
|
Section
4.05
|
Existence
|
29
|
|
Section
4.06
|
Rule 144A Information Requirement and Annual
Reports
|
29
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|
Section
4.07
|
Stay, Extension and Usury Laws
|
30
|
|
Section
4.08
|
Compliance Certificate; Statements as to Defaults
|
30
|
|
Section
4.09
|
Additional Interest pursuant to the Registration Rights
Agreement
|
31
|
|
Section
4.10
|
Limitation on Liens Securing Indebtedness
|
31
|
|
Section
4.11
|
Further Instruments and Acts
|
31
|
|
Article 5 LISTS OF HOLDERS AND REPORTS BY THE COMPANY AND THE
TRUSTEE
|
32
|
|
|
Section
5.01
|
Lists of Holders
|
32
|
|
Section
5.02
|
Preservation and Disclosure of Lists
|
32
|
|
Article
6 DEFAULTS AND REMEDIES
|
32
|
|
|
Section
6.01
|
Events of Default
|
32
|
|
Section
6.02
|
Acceleration; Rescission and Annulment
|
33
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|
Section
6.03
|
Additional Interest
|
34
|
|
Section
6.04
|
Payments of Notes on Default; Suit Therefor
|
35
|
|
Section
6.05
|
Application of Monies Collected by Trustee
|
36
|
|
Section
6.06
|
Proceedings by Holders
|
37
|
|
Section
6.07
|
Proceedings by Trustee
|
38
|
i
|
Section
6.08
|
Remedies Cumulative and Continuing
|
38
|
|
Section
6.09
|
Direction of Proceedings and Waiver of Defaults by Majority of
Holders
|
39
|
|
Section
6.10
|
Notice of Defaults
|
39
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|
Section
6.11
|
Undertaking to Pay Costs
|
39
|
|
Article
7 CONCERNING THE TRUSTEE
|
40
|
|
|
Section
7.01
|
Duties and Responsibilities of Trustee
|
40
|
|
Section
7.02
|
Reliance on Documents, Opinions, Etc
|
41
|
|
Section
7.03
|
No Responsibility for Recitals, Etc
|
43
|
|
Section
7.04
|
Trustee, Paying Agents, Conversion Agents, Bid Solicitation Agent
or Note Registrar May Own Notes
|
43
|
|
Section
7.05
|
Monies to Be Held in Trust
|
43
|
|
Section
7.06
|
Compensation and Expenses of Trustee
|
44
|
|
Section
7.07
|
Officers’ Certificate as Evidence
|
44
|
|
Section
7.08
|
Eligibility of Trustee
|
44
|
|
Section
7.09
|
Resignation or Removal of Trustee
|
45
|
|
Section
7.10
|
Acceptance by Successor Trustee
|
46
|
|
Section
7.11
|
Succession by Merger, Etc
|
46
|
|
Section
7.12
|
Trustee’s Application for Instructions from the
Company
|
47
|
|
Article
8 CONCERNING THE HOLDERS
|
47
|
|
|
Section
8.01
|
Action by Holders
|
47
|
|
Section
8.02
|
Proof of Execution by Holders
|
47
|
|
Section
8.03
|
Who Are Deemed Absolute Owners
|
47
|
|
Section
8.04
|
Company-Owned Notes Disregarded
|
48
|
|
Section
8.05
|
Revocation of Consents; Future Holders Bound
|
48
|
|
Article
9 HOLDERS’ MEETINGS
|
48
|
|
|
Section
9.01
|
Purpose of Meetings
|
48
|
|
Section
9.02
|
Call of Meetings by Trustee
|
49
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|
Section
9.03
|
Call of Meetings by Company or Holders
|
49
|
|
Section
9.04
|
Qualifications for Voting
|
49
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|
Section
9.05
|
Regulations
|
49
|
|
Section
9.06
|
Voting
|
50
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|
Section
9.07
|
No Delay of Rights by Meeting
|
50
|
|
Article
10 SUPPLEMENTAL INDENTURES
|
50
|
|
|
Section
10.01
|
Supplemental Indentures Without Consent of Holders
|
50
|
|
Section
10.02
|
Supplemental Indentures with Consent of Holders
|
51
|
|
Section
10.03
|
Effect of Supplemental Indentures
|
52
|
|
Section
10.04
|
Notation on Notes
|
53
|
|
Section
10.05
|
Evidence of Compliance of Supplemental Indenture to Be Furnished
Trustee
|
53
|
|
Article 11 CONSOLIDATION, MERGER, SALE, CONVEYANCE AND
LEASE
|
53
|
|
|
Section
11.01
|
Company May Consolidate, Etc. on Certain Terms
|
53
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|
Section
11.02
|
Successor Corporation to Be Substituted
|
54
|
|
Section
11.03
|
Officers’ Certificate and Opinion of Counsel to Be Given to
Trustee
|
54
|
|
Article 12 IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
DIRECTORS
|
54
|
|
|
Section
12.01
|
Indenture and Notes Solely Corporate Obligations
|
54
|
ii
|
Article
13 [INTENTIONALLY OMITTED]
|
55
|
|
|
Article
14 CONVERSION OF NOTES
|
55
|
|
|
Section
14.01
|
Conversion Privilege
|
55
|
|
Section
14.02
|
Conversion Procedure; Settlement Upon Conversion
|
58
|
|
Section
14.03
|
Increased Conversion Rate Applicable to Certain Notes Surrendered
in Connection with Make-Whole Fundamental Changes or Redemption
Notice
|
63
|
|
Section
14.04
|
Adjustment of Conversion Rate
|
65
|
|
Section
14.05
|
Adjustments of Prices
|
73
|
|
Section
14.06
|
Shares to Be Fully Paid
|
73
|
|
Section
14.07
|
Effect of Recapitalizations, Reclassifications and Changes of the
Common Stock
|
73
|
|
Section
14.08
|
Certain Covenants
|
75
|
|
Section
14.09
|
Responsibility of Trustee
|
76
|
|
Section
14.10
|
Notice to Holders Prior to Certain Actions
|
76
|
|
Section
14.11
|
Stockholder Rights Plans
|
77
|
|
Section
14.12
|
Ownership Limitation
|
77
|
|
Article 15 REPURCHASE OF NOTES AT OPTION OF HOLDERS
|
78
|
|
|
Section
15.01
|
[Intentionally Omitted]
|
78
|
|
Section
15.02
|
Repurchase at Option of Holders Upon a Fundamental
Change
|
78
|
|
Section
15.03
|
Withdrawal of Fundamental Change Repurchase Notice
|
80
|
|
Section
15.04
|
Deposit of Fundamental Change Repurchase Price
|
81
|
|
Section
15.05
|
Covenant to Comply with Applicable Laws Upon Repurchase of
Notes
|
81
|
|
Article
16 OPTIONAL REDEMPTION
|
82
|
|
|
Section
16.01
|
Optional Redemption
|
82
|
|
Section
16.02
|
Notice of Optional Redemption; Selection of Notes
|
82
|
|
Section
16.03
|
Payment of Notes Called for Redemption
|
83
|
|
Section
16.04
|
Restrictions on Redemption
|
83
|
|
Article
17 MISCELLANEOUS PROVISIONS
|
84
|
|
|
Section
17.01
|
Provisions Binding on Company’s Successors
|
84
|
|
Section
17.02
|
Official Acts by Successor Corporation
|
84
|
|
Section
17.03
|
Addresses for Notices, Etc
|
84
|
|
Section
17.04
|
Governing Law; Jurisdiction
|
84
|
|
Section
17.05
|
Evidence of Compliance with Conditions Precedent; Certificates and
Opinions of Counsel to Trustee
|
85
|
|
Section
17.06
|
Legal Holidays
|
85
|
|
Section
17.07
|
No Security Interest Created
|
86
|
|
Section
17.08
|
Benefits of Indenture
|
86
|
|
Section
17.09
|
Table of Contents, Headings, Etc
|
86
|
|
Section
17.10
|
Authenticating Agent
|
86
|
|
Section
17.11
|
Execution in Counterparts
|
87
|
|
Section
17.12
|
Severability
|
87
|
|
Section
17.13
|
Waiver of Jury Trial
|
87
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|
Section
17.14
|
Force Majeure
|
87
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|
Section
17.15
|
Calculations
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87
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|
Section
17.16
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USA PATRIOT Act
|
87
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iii
EXHIBIT
Exhibit A
Form of Note
A-1
iv
INDENTURE dated as of January 14, 2020
between RUMBLEON, INC., a
Delaware corporation, as issuer (the “Company,” as more fully set forth
in Section 1.01) and
WILMINGTON TRUST, NATIONAL
ASSOCIATION, a national banking association, as trustee (the
“Trustee,” as
more fully set forth in Section 1.01).
W I T N E S S E T H:
WHEREAS, for its lawful corporate
purposes, the Company has duly authorized the issuance of its 6.75%
Convertible Senior Notes due 2025 (the “Notes”), initially in an aggregate
principal amount not to exceed $38,750,000, and in order to provide
the terms and conditions upon which the Notes are to be
authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture;
and
WHEREAS, the Form of Note, the
certificate of authentication to be borne by each Note, the Form of
Notice of Conversion, the Form of Fundamental Change Repurchase
Notice and the Form of Assignment and Transfer to be borne by the
Notes are to be substantially in the forms hereinafter provided;
and
WHEREAS, all acts and things necessary
to make the Notes, when executed by the Company and authenticated
and delivered by the Trustee or a duly authorized authenticating
agent, as in this Indenture provided, the valid, binding and legal
obligations of the Company, and this Indenture a valid agreement
according to its terms, have been done and performed, and the
execution of this Indenture and the issuance hereunder of the Notes
have in all respects been duly authorized.
NOW,
THEREFORE, THIS INDENTURE WITNESSETH:
That in
order to declare the terms and conditions upon which the Notes are,
and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of
the Notes by the Holders thereof, the Company covenants and agrees
with the Trustee for the equal and proportionate benefit of the
respective Holders from time to time of the Notes (except as
otherwise provided below), as follows:
ARTICLE 1
DEFINITIONS
Section 1.01
Definitions.
The terms defined in this Section 1.01 (except as
herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified in
this Section 1.01. The words
“herein,” “hereof,” “hereunder”
and words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision. The
terms defined in this Article include the plural as well as the
singular.
“Additional Interest” means all
amounts, if any, payable pursuant to Section 4.06(d) and
Section 6.03
hereof and pursuant to the Registration Rights Agreement, as
applicable.
“Additional Shares” shall have the
meaning specified in Section 14.03(a).
“Affiliate” of any specified Person
means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such
specified Person. For the purposes of this definition,
“control,” when used with respect to any specified
Person means the power to direct or cause the direction of the
management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the
foregoing. Notwithstanding anything to the contrary herein, the
determination of whether one Person is an “Affiliate” of another Person for
purposes of this Indenture shall be made based on the facts at the
time such determination is made or required to be made, as the case
may be, hereunder.
“Affiliated Holders” means, (1)
with respect to any specified natural Person, any company,
partnership, trust, foundation or other entity or investment
vehicle for which such specified natural Person (or such specified
Person’s estate) retains sole dispositive and exclusive
voting power with respect to the Class A Common Stock and/or the
Common Stock, as the case may be, held by such company,
partnership, trust, foundation or other entity or investment
vehicle, and the trustees, legal representatives, beneficiaries
and/or beneficial owners, but solely in such capacity, of such
company, partnership, trust, foundation or other entity or
investment vehicle and (2) the estates of such specified natural
Person (it being understood, for the avoidance of doubt, that this
clause (2) will not cover any Person to whom any securities are
transferred from any such estate).
“beneficial owner,”
“beneficial
ownership” or “beneficially owned” shall have the
meaning ascribed to such term in Rule 13d-3 under the Exchange
Act.
“Bid Solicitation Agent” means the
Company or the Person appointed by the Company to solicit bids for
the Trading Price of the Notes in accordance with Section 14.01(b)(i). The
Company shall initially act as the Bid Solicitation
Agent.
“Board of Directors” means the
board of directors of the Company or a committee of such board duly
authorized to act for it hereunder.
“Board Resolution” means a copy of
a resolution certified by the Secretary or an Assistant Secretary
of the Company to have been duly adopted by the Board of Directors,
and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
“Business Day” means, with respect
to any Note, any day other than a Saturday, a Sunday or a day on
which the Federal Reserve Bank of New York is authorized or
required by law or executive order to close or be
closed.
“Capital Lease Obligation” means,
at the time any determination is to be made, the amount of the
liability in respect of a capital lease that would at that time be
required to be capitalized on a balance sheet prepared in
accordance with U.S. GAAP, and the stated maturity thereof shall be
the date of the last payment of rent or any other amount due under
such lease prior to the first date upon which such lease may be
prepaid by the lessee without payment of a penalty.
“Capital Stock” means, for any
entity, any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that
entity.
“Cash Settlement” shall have the
meaning specified in Section 14.02(a).
2
“Class A Common Stock” means the
Class A common stock of the Company, par value $0.001 per share, at
the date of this Indenture.
“Clause A Distribution” shall have
the meaning specified in Section 14.04(c).
“Clause B Distribution” shall have
the meaning specified in Section 14.04(c).
“Clause C Distribution” shall have
the meaning specified in Section 14.04(c).
“close of business” means
5:00 p.m. (New York City time).
“Combination Settlement” shall have
the meaning specified in Section 14.02(a).
“Commission” means the U.S.
Securities and Exchange Commission.
“Common Equity” of any Person means
Capital Stock of such Person that is generally entitled (a) to
vote in the election of directors of such Person or (b) if
such Person is not a corporation, to vote or otherwise participate
in the selection of the governing body, partners, managers or
others that will control the management or policies of such
Person.
“Common Stock” means the Class B
common stock of the Company, par value $0.001 per share, at the
date of this Indenture, subject to Section 14.07.
“Company” shall have the meaning
specified in the first paragraph of this Indenture, and subject to
the provisions of Article 11, shall include
its successors and assigns.
“Company Order” means a written
order of the Company, signed by the Company’s Chief Executive
Officer, Chief Financial Officer, President, Executive or Senior
Vice President or any Vice President (whether or not designated by
a number or numbers or word or words added before or after the
title “Vice
President”), and delivered to the
Trustee.
“Consumer Warehouse Facilities”
means a revolving credit or repurchase facility intended to finance
the loans made by the Company or any of its Subsidiaries to
consumers acquiring vehicles of any nature from any of the
Company’s Subsidiaries which facility may include Liens on
the accounts, documents and other property of the entity making or
acquiring or otherwise involved with such consumer
loans.
“Conversion Agent” shall have the
meaning specified in Section 4.02.
“Conversion Date” shall have the
meaning specified in Section 14.02(c).
“Conversion Obligation” shall have
the meaning specified in Section 14.01(a).
“Conversion Price” means as of any
time, $1,000, divided by
the Conversion Rate as of such time.
“Conversion Rate” shall have the
meaning specified in Section 14.01(a).
“Corporate Event” shall have the
meaning specified in Section
14.01(b)(iii).
3
“Corporate Trust Office” means the
designated office of the Trustee at which at any time this
Indenture shall be administered, which office at the date hereof is
located at Wilmington Trust, National Association, Global Capital
Markets, 50 South Sixth Street, Suite 1290, Minneapolis, Minnesota
55402, Attention: RumbleOn Notes Administrator, or such other
address as the Trustee may designate from time to time by notice to
the Holders and the Company, or the designated corporate trust
office of any successor trustee (or such other address as such
successor trustee may designate from time to time by notice to the
Holders and the Company).
“Credit Facilities” means one or
more (i) debt facilities or commercial paper facilities, providing
for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to lenders or to special
purpose entities formed to borrow from lenders against such
receivables), letters of credit, (ii) debt securities, indentures
or other forms of debt financing (including convertible or
exchangeable debt instruments or bank guarantees or bankers’
acceptances) or (iii) instruments or agreements evidencing any
other Indebtedness, in each case, as amended, supplemented,
modified, extended, restructured, renewed, refinanced, restated,
replaced or refunded in whole or in part from time to time
(including increasing the amount of available borrowings thereunder
or adding the Company’s Subsidiaries as additional borrowers
or guarantors thereunder).
“Custodian” means the Trustee, as
custodian for The Depository Trust Company, with respect to the
Global Notes, or any successor entity thereto.
“Daily Conversion Value” means, for
each of the 40 consecutive Trading Days during the Observation
Period, one-fortieth (1/40th) of the product of (a) the
Conversion Rate on such Trading Day and (b) the Daily VWAP for
such Trading Day.
“Daily Measurement Value” means the
Specified Dollar Amount (if any), divided by 40.
“Daily Settlement Amount,” for each
of the 40 consecutive Trading Days during the Observation Period,
shall consist of:
(a) cash
in an amount equal to the lesser of (i) the Daily Measurement
Value and (ii) the Daily Conversion Value on such Trading Day;
and
(b) if
the Daily Conversion Value on such Trading Day exceeds the Daily
Measurement Value, a number of shares of Common Stock equal to
(i) the difference between the Daily Conversion Value and the
Daily Measurement Value, divided by (ii) the Daily VWAP for such Trading
Day.
“Daily VWAP” means the per share
volume-weighted average price as displayed under the heading
“Bloomberg VWAP” on Bloomberg page “RMBL
<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 Trading Day (or if such volume-weighted
average price is unavailable, the market value of one share of the
Common Stock on such 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” shall be determined
without regard to after-hours trading or any other trading outside
of the regular trading session trading hours.
“Default” means any event that is,
or after notice or passage of time, or both, would be, an Event of
Default.
4
“Defaulted Amounts” means any
amounts on any Note (including, without limitation, the Redemption
Price, the Fundamental Change Repurchase Price, principal and
interest) that are payable but are not punctually paid or duly
provided for, in each case, when due.
“delivered” means, with respect to
any notice to be delivered, given or mailed to a Holder pursuant to
this Indenture, notice (x) given to the Depositary (or its
designee) pursuant to the standing instructions from the Depositary
or its designee, including by electronic mail in accordance with
accepted practices or procedures at the Depositary (in the case of
a Global Note) or (y) mailed to such Holder by first class mail,
postage prepaid, at its address as it appears on the Note Register,
in each case in accordance with Section 17.03. Notice so
“delivered” shall be deemed to include any notice to be
“mailed” or “given,” as applicable, under
this Indenture.
“Depositary” means, with respect to
each Global Note, the Person specified in Section 2.05(c) as the
Depositary with respect to such Notes, until a successor shall have
been appointed and become such pursuant to the applicable
provisions of this Indenture, and thereafter, “Depositary” shall mean or include
such successor.
“Distributed Property” shall have
the meaning specified in Section 14.04(c).
“Effective Date” shall have the
meaning specified in Section 14.03(c), except
that, as used in Section 14.04 and
Section 14.05,
“Effective Date”
means the first date on which shares of the Common Stock trade on
the applicable exchange or in the applicable market, regular way,
reflecting the relevant share split or share combination, as
applicable.
“Event of Default” shall have the
meaning specified in Section 6.01.
“Ex-Dividend Date” means the first
date on which shares of the Common Stock trade on the applicable
exchange or in the applicable market, regular way, without the
right to receive the issuance, dividend or distribution in
question, from the Company or, if applicable, from the seller of
Common Stock on such exchange or market (in the form of due bills
or otherwise) as determined by such exchange or
market.
“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
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 Note” means 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.
“Fundamental Change” shall be
deemed to have occurred at the time after the Notes are originally
issued if any of the following occurs:
5
(a) a
“person” or “group” within the meaning of
Section 13(d) of the Exchange Act, other than the Company, its
Wholly Owned Subsidiaries and the employee benefit plans of the
Company and its Wholly Owned Subsidiaries, has become the direct or
indirect beneficial owner, of (i) the Common Stock representing
more than 50% of the voting power of the Common Stock or (ii) the
Company’s common equity representing more than 50% of the
voting power of its Common Equity on an aggregate basis; provided
that, for purposes of both clauses (i) and (ii), the voting power
of the Company’s Class A Common Stock and the Common Stock
directly or indirectly beneficially owned, by a Permitted Holder
(as defined below) or a “group” (composed solely of
Permitted Holders) will exclude (A) any shares of Class A Common
Stock and Common Stock directly or indirectly beneficially owned by
such Permitted Holder on the date of this Indenture for so long as
such shares of the Company’s Class A Common Stock or Common
Stock, as the case may be, are directly or indirectly beneficially
owned by such Permitted Holder and (B) any shares of Common Stock
directly or indirectly beneficially owned by such Permitted Holder
that are acquired after the date of this Indenture by such
Permitted Holder pursuant to equity grants (or the exercise,
vesting, settlement or conversion thereof by such Permitted Holder
outstanding on the date of this Indenture or subsequently granted
under one or more of the Company’s equity incentive plans;
or
(b) the
consummation of (A) any recapitalization, reclassification or
change of the Common Stock (other than changes resulting from a
subdivision or combination) as a result of which the Common Stock
would be converted into, or exchanged for, stock, other securities,
other property or assets; (B) any share exchange,
consolidation or merger of the Company pursuant to which the Common
Stock will be converted into cash, securities or other property or
assets; or (C) any sale, lease or other transfer in one
transaction or a series of transactions of all or substantially all
of the consolidated assets of the Company and its Subsidiaries,
taken as a whole, to any Person other than one of the
Company’s direct or indirect Wholly Owned
Subsidiaries; provided,
however, that a transaction
described in clause (B) in which the holders of all classes of
the Company’s Common Equity immediately prior to such
transaction own, directly or indirectly, more than 50% of all
classes of Common Equity of the continuing or surviving corporation
or transferee or the parent thereof immediately after such
transaction in substantially the same proportions as such ownership
immediately prior to such transaction shall not be a Fundamental
Change pursuant to this clause (b); or
(c) the
stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company; or
(d) the
Common Stock (or other common stock underlying the Notes) ceases to
be listed or quoted on any of The New York Stock Exchange, The
NASDAQ Capital Market, The NASDAQ Global Select Market or The
NASDAQ Global Market (or any of their respective
successors);
provided, however,
that a transaction or transactions described in clause (a) or
clause (b) above shall not constitute a Fundamental Change, if
at least 90% of the consideration received or to be received by the
holders of the Common Stock of the Company, excluding cash payments
for fractional shares, in connection with such transaction or
transactions consists of shares of common stock that are listed or
quoted on any of The New York Stock Exchange, The NASDAQ Capital
Market, The NASDAQ Global Select Market or The NASDAQ Global Market
(or any of their respective successors) or will be so listed or
quoted when issued or exchanged in connection with such transaction
or transactions and as a result of such transaction or transactions
the Notes become convertible into such consideration, excluding
cash payments for fractional shares (subject to the provisions of
Section 14.02(a)). If any
transaction in which the Common Stock is replaced by the securities
of another entity occurs, 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 proviso immediately
following clause (d) of the definition thereof, following the
effective date of such transaction), references to the Company in
this definition shall instead be references to such other
entity.
6
For
purposes of this definition, any transaction that constitutes a
“Fundamental Change” pursuant to both clause (a) and
clause (b) above (without giving effect to the proviso to clause
(b)) shall be deemed a “Fundamental Change” solely
under clause (b) (subject to the proviso to clause
(b)).
“Fundamental Change Company Notice”
shall have the meaning specified in Section 15.02(c).
“Fundamental Change Repurchase
Date” shall have the meaning specified in Section 15.02(a).
“Fundamental Change Repurchase
Notice” shall have the meaning specified in
Section 15.02(b)(i).
“Fundamental Change Repurchase
Price” shall have the meaning specified in
Section 15.02(a).
“Global Note” shall have the
meaning specified in Section 2.05(b).
“Guarantee” means a guarantee other
than by endorsement of negotiable instruments for collection in the
ordinary course of business, direct or indirect, in any manner
including, without limitation, by way of a pledge of assets or
through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by
virtue of partnership arrangements, or by agreements to keep-well,
to purchase assets, goods, securities or services, to take or pay
or to maintain financial statement conditions or
otherwise).
“Hedging Obligations” means, with
respect to any specified Person, the obligations of such Person
under:
(1)
interest rate swap
agreements (whether from fixed to floating or from floating to
fixed), interest rate cap agreements and interest rate collar
agreements;
(2)
other agreements or
arrangements designed to manage interest rates or interest rate
risk; and
(3)
other agreements or
arrangements designed to protect such Person against fluctuations
in currency exchange rates or commodity prices.
“Holder,” as applied to any Note,
or other similar terms (but excluding the term “beneficial
holder”), means any Person in whose name at the time a
particular Note is registered on the Note Register.
“Indebtedness” means, with respect
to any specified Person, any indebtedness of such Person (excluding
accrued expenses and trade payables), whether or not
contingent:
7
(1)
in respect of
borrowed money;
(2)
evidenced by bonds,
notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof);
(3)
in respect of
banker’s acceptances;
(4)
representing
Capital Lease Obligations;
(5)
representing the
balance deferred and unpaid of the purchase price of any property
or services (other than trade payables not overdue by more than 60
days incurred in the ordinary course of such Person’s
business); or
(6)
representing any
Hedging Obligations,
if and
to the extent any of the preceding items (other than letters of
credit and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with
U.S. GAAP. In addition, the term “Indebtedness”
includes all Indebtedness of others secured by a Lien on any asset
of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise
included, the Guarantee by the specified Person of any Indebtedness
of any other Person, to the extent, as applicable, of the amount of
Indebtedness covered by such Guarantee, or the lesser of the fair
market value (as determined in good faith by the Company) of the
asset or assets subject to such Lien or the principal (or accreted)
amount of the Indebtedness secured by such Lien; provided that
Indebtedness shall not include post-closing payment adjustments to
which the seller may become entitled to the extent such payment is
determined by a final closing balance sheet or such payment depends
on the performance of such business after the closing. Indebtedness
shall be calculated without giving effect to the effects of
Accounting Standards Codification 815 — Derivatives and
Hedging and related interpretations to the extent such effects
would otherwise increase or decrease an amount of Indebtedness for
any purpose under this Indenture as a result of accounting for any
embedded derivatives created by the terms of such
Indebtedness.
The
amount of any Indebtedness outstanding as of any date will
be:
(1)
the accreted value
of the Indebtedness, in the case of any Indebtedness issued with
original issue discount;
(2)
the principal
amount of the Indebtedness, in the case of any other
Indebtedness;
(3)
in the case of the
Guarantee by the specified Person of any Indebtedness of any other
Person where the amount of the Guarantee is less than the principal
amount of such Indebtedness, such lesser amount; and
(4)
in respect of
Indebtedness of another Person secured by a Lien on the assets of
the specified Person, the lesser of:
(a)
the fair market
value of such assets at the date of determination, as determined in
good faith by the Company; and
(b)
the amount of the
Indebtedness of the other Person so secured.
8
“Indenture” means this instrument
as originally executed or, if amended or supplemented as herein
provided, as so amended or supplemented.
“Interest Make-Whole Payment” shall
have the meaning specified in Section 14.01(c).
“Interest Payment Date” means each
January 1 and July 1 of each year, beginning on
July 1, 2020.
“Inventory Financing Agreement”
means that certain Inventory Financing and Security Agreement, by
and among Inventory Financing Lenders and RMBL Missouri, dated
February 16, 2018, as it may be amended, and any similar agreements
entered into with any Inventory Financing Lender.
“Inventory Financing Lenders” means
Ally Bank and Ally Financial Inc., collectively and each of their
assigns or successors in interest, and any additional or
replacement lenders providing inventory financing to the Company or
any of its Subsidiaries, provided that such lender shall be
domiciled in the United States and shall be in the business of
extending credit of such type in the ordinary course of
business.
“Last Reported Sale Price” of the
Common Stock on any date means the closing sale price per share (or
if no closing sale price is reported, the average of the bid and
ask prices or, if more than one in either case, the average of the
average bid and the average ask prices) on that date as reported in
composite transactions for the principal U.S. national or regional
securities exchange on which the Common Stock is traded. If the
Common Stock is not listed for trading on a U.S. national or
regional securities exchange on the relevant date, the
“Last Reported Sale
Price” shall be the last quoted bid price for the
Common Stock in the over-the-counter market on the relevant date as
reported by OTC Markets Group Inc. or a similar organization. If
the Common Stock is not so quoted, the “Last Reported Sale Price” shall be
the average of the mid-point of the last bid and ask prices for the
Common Stock on the relevant date from each of at least three
nationally recognized independent investment banking firms selected
by the Company for this purpose. The “Last Reported Sale
Price” shall be determined without regard to after-hours
trading or any other trading outside of the regular trading session
trading hours.
“Liens” means, with respect to any
asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in the nature of a security interest in
respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law, including any conditional sale or
other title retention agreement or any lease in the nature thereof.
For the avoidance of doubt, a license shall not constitute a
“Lien” for
purposes of this section.
“Make-Whole Adjustment Reference
Price” shall have the meaning specified in
Section
14.03(f)(i).
“Make-Whole Fundamental Change”
means any transaction or event that constitutes a Fundamental
Change (as defined above and determined after giving effect to any
exceptions to or exclusions from such definition, but without
regard to the proviso in
clause (b) of the definition thereof).
“Make-Whole Fundamental Change
Period” shall have the meaning specified in
Section 14.03(a).
9
“Make-Whole Fundamental Change
VWAP” means 95.0% of the simple average of the Daily
VWAP for the Common Stock for the 10 consecutive Trading Days
ending on and including the Trading Day immediately preceding the
Effective Date.
“Market Disruption Event” means,
for the purposes of determining amounts due upon conversion and the
number of shares of Common Stock deliverable in respect of an
Interest Make-Whole Payment if the Company elects (or is deemed to
have elected) to make an Interest Make-Whole Payment in shares of
its Common Stock, (a) 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 (b) 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 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 stock exchange or
otherwise) in the Common Stock or in any options contracts or
futures contracts relating to the Common Stock.
“Maturity Date” means January 1,
2025.
“Measurement Period” shall have the
meaning specified in Section 14.01(b)(i).
“Note” or “Notes” shall have the meaning
specified in the first paragraph of the recitals of this
Indenture.
“Note Register” shall have the
meaning specified in Section 2.05(a).
“Note Registrar” shall have the
meaning specified in Section 2.05(a).
“Notice of Conversion” shall have
the meaning specified in Section 14.02(b).
“Observation Period” with respect
to any Note surrendered for conversion means: (i) subject to
clause (ii), if the relevant Conversion Date occurs prior to
July 1, 2024, the 40 consecutive Trading Day period beginning
on, and including, the second Trading Day immediately succeeding
such Conversion Date; (ii) if the relevant Conversion Date
occurs during a Redemption Period with respect to the Notes
pursuant to Section 16.02 and prior to
the relevant Redemption Date, the 40 consecutive Trading Days
beginning on, and including, the 41st Scheduled Trading Day
immediately preceding such Redemption Date; and (iii) if the
relevant Conversion Date occurs on or after July 1, 2024, the 40
consecutive Trading Days beginning on, and including, the 41st
Scheduled Trading Day immediately preceding the Maturity
Date.
“Officer”
means, with respect to the Company, the President, the Chief
Executive Officer, the Chief Financial Officer, the Treasurer, the
Secretary, any Executive or Senior Vice President or any Vice
President (whether or not designated by a number or numbers or word
or words added before or after the title “Vice
President”).
“Officers’ Certificate,” when
used with respect to the Company, means a certificate that is
delivered to the Trustee and that is signed by (a) two
Officers of the Company or (b) one Officer of the Company and
one of the Treasurer, any Assistant Treasurer, the Secretary, any
Assistant Secretary or the Controller of the Company. Each such
certificate shall include the statements provided for in
Section 17.05
if and to the extent required by the provisions of such Section.
One of the Officers giving an Officers’ Certificate pursuant
to Section 4.08 shall be the
principal executive, financial or accounting officer of the
Company.
10
“open of business” means
9:00 a.m. (New York City time).
“Opinion of Counsel” means an
opinion in writing signed by legal counsel, who may be an employee
of or counsel to the Company, or other counsel who is acceptable to
the Trustee, that is delivered to the Trustee. Each such opinion
shall include the statements provided for in Section 17.05 if and to
the extent required by the provisions of such Section 17.05.
“Optional Redemption” shall have
the meaning specified in Section 16.01.
“outstanding,” when used with
reference to Notes, shall, subject to the provisions of
Section 8.04,
mean, as of any particular time, all Notes authenticated and
delivered by the Trustee under this Indenture, except:
(a) Notes
theretofore canceled by the Trustee or accepted by the Trustee for
cancellation;
(b) Notes,
or portions thereof, that have become due and payable and in
respect of which monies in the necessary amount shall have been
deposited in trust with the Trustee or with any Paying Agent (other
than the Company) or shall have been set aside and segregated in
trust by the Company (if the Company shall act as its own Paying
Agent);
(c) Notes
that have been paid pursuant to Section 2.06
or Notes in lieu of which, or in
substitution for which, other Notes shall have been authenticated
and delivered pursuant to the terms of Section 2.06
unless proof satisfactory to the
Trustee is presented that any such Notes are held by protected
purchasers in due course;
(d) Notes
converted pursuant to Article 14
and required to be cancelled pursuant
to Section 2.08;
(e) Notes
redeemed pursuant to Article 16;
and
(f) Notes
repurchased by the Company pursuant to the penultimate sentence
of Section 2.10.
“Ownership Limitation” shall have
the meaning specified in Section 14.12.
“Paying Agent” shall have the
meaning specified in Section 4.02.
“Permitted Holder” means any of (1)
Marshall Chesrown, the Company’s Chief Executive Officer as
of the date hereof, (2) Steven Berrard, the Company’s Chief
Financial Officer as of the date hereof and (3) each of the
Affiliated Holders (as defined below) of either of the natural
persons referred to in clauses (1) and (2) of this
definition.
“Permitted Liens”
means:
(1)
Liens on any or all
of the Company’s and its Subsidiaries’ assets securing
one or more Credit Facilities (and borrowings thereunder) other
than Inventory Financing Agreements and Credit Facilities for
Consumer Warehouse Facilities; provided that the aggregate secured
borrowings under such Credit Facilities shall not at any one time
exceed $5.0 million in the aggregate;
11
(2)
Liens on property
(including equity interests) existing at the time of acquisition of
the property and/or person by the Company or any of its
Subsidiaries (plus improvements and accessions to such property or
proceeds or distributions thereof); provided that such Liens were
in existence prior to such acquisition and not incurred in
contemplation of such acquisition;
(3)
Liens arising under
this Indenture, including those that are for the benefit of the
Trustee;
(4)
Liens securing
Hedging Obligations entered into by the Company and/or any of its
Subsidiaries in the ordinary course of business and entered into
for bona fide hedging purposes (and not for speculative purposes)
as determined in good faith by the Company;
(5)
Liens securing
Indebtedness pursuant to a Qualified Inventory
Financing;
(6)
Liens securing
Indebtedness constituting Consumer Warehouse
Facilities;
(7)
Liens securing
Capital Lease Obligations in an amount not in excess of
$1,000,000.00; and
(8)
Liens securing
letters of credit (or reimbursement agreements in respect thereof)
in an amount not to exceed $500,000.00 at any time outstanding, and
Liens securing reimbursement obligations in connection with letters
of credit serving as a lease deposit.
“Person” means an individual, a
corporation, a limited liability company, an association, a
partnership, a joint venture, a joint stock company, a trust, an
unincorporated organization or a government or an agency or a
political subdivision thereof.
“Physical Notes” means permanent
certificated Notes in registered form issued in minimum
denominations of $1,000 principal amount and integral multiples of
$1,000 in excess thereof.
“Physical Settlement” shall have
the meaning specified in Section 14.02(a).
“Predecessor Note” of any
particular Note means every previous Note evidencing all or a
portion of the same debt as that evidenced by such particular Note;
and, for the purposes of this definition, any Note authenticated
and delivered under Section 2.06 in lieu of or
in exchange for a mutilated, lost, destroyed or stolen Note shall
be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Note that it replaces.
“Qualified Inventory Financing”
means Indebtedness owing to Inventory Financing Lenders pursuant to
an Inventory Financing Agreement, provided that, the aggregate
outstanding amount of the aggregate amount of such Indebtedness at
any time outstanding shall not exceed the aggregate book value of
all inventory of the Company and its Subsidiaries, on a
consolidated basis.
12
“Record Date” means, with respect
to any dividend, distribution or other transaction or event in
which the holders of Common Stock (or other applicable security)
have the right to receive any cash, securities or other property or
in which the Common Stock (or such other security) is exchanged for
or converted into any combination of cash, securities or other
property, the date fixed for determination of holders of the Common
Stock (or such other security) entitled to receive such cash,
securities or other property (whether such date is fixed by the
Board of Directors, by statute, by contract or
otherwise).
“Redemption Date” shall have the
meaning specified in Section 16.02(a).
“Redemption Notice” shall have the
meaning specified in Section 16.02(a).
“Redemption Period” shall the
meaning specified in Section
14.02(a)(i).
“Redemption Price” means, for any
Notes to be redeemed pursuant to Section 16.01, 100% of the
principal amount of such Notes, plus accrued and unpaid interest, if
any, 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
interest accrued to the Interest Payment Date will be paid to
Holders of record of such Notes on such Regular Record Date, and
the Redemption Price will be equal to 100% of the principal amount
of such Notes).
“Reference Property” shall have the
meaning specified in Section 14.07(a).
“Registration Rights Agreement”
means that certain Registration Rights Agreement, dated as of
January 14, 2020, among the Company and the Initial Purchaser, as
amended from time to time.
“Regular Record Date,” with respect
to any Interest Payment Date, means the December 15 or
June 15 (whether or not such day is a Business Day)
immediately preceding the applicable January 1 or July 1
Interest Payment Date, respectively.
“Responsible Officer” means, when
used with respect to the Trustee, any officer within the Corporate
Trust Office of the Trustee, including any vice president,
assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily
performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any
corporate trust matter relating to this Indenture is referred
because of such person’s knowledge of and familiarity with
the particular subject and, in each case, who shall have direct
responsibility for the administration of this
Indenture.
“Restricted Securities” shall have
the meaning specified in Section 2.05(c).
“Rule 144” means Rule 144
as promulgated under the Securities Act.
“Rule 144A” means
Rule 144A as promulgated under the Securities
Act.
“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 so listed or admitted for trading, “Scheduled Trading Day” means a
Business Day.
13
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Settlement Amount” has the meaning
specified in Section 14.02(a)(iv).
“Settlement Method” means, with
respect to any conversion of Notes, Physical Settlement, Cash
Settlement or Combination Settlement, as elected (or deemed to have
been elected) by the Company.
“Settlement Notice” has the meaning
specified in Section 14.02(a)(iii).
“Share Exchange Event” shall have
the meaning specified in Section 14.07(a).
“Significant Subsidiary” means a
Subsidiary of the Company that meets the definition of
“significant subsidiary” in Article 1,
Rule 1-02 of Regulation S-X under the Exchange
Act.
“Specified Dollar Amount” means the
maximum cash amount per $1,000 principal amount of Notes to be
received upon conversion as specified in the Settlement Notice (or
as deemed specified pursuant to Section 14.02) related to any
converted Notes.
“Spin-Off” shall have the meaning
specified in Section 14.04(c).
“Stock Price” shall have the
meaning specified in Section 14.03(c).
“Subsidiary” means, with respect to
any Person, any corporation, association, partnership or other
business entity of which more than 50% of the total voting power of
shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers,
general partners or trustees thereof is at the time owned or
controlled, directly or indirectly, by (i) such Person;
(ii) such Person and one or more Subsidiaries of such Person;
or (iii) one or more Subsidiaries of such Person.
“Successor Company” shall have the
meaning specified in Section 11.01(a).
“Trading Day”, except for purposes
of determining amounts due upon conversion and the number of shares
of Common Stock, if any, deliverable in respect of an Interest
Make-Whole Payment, means a day on which (i) trading in the
Common Stock (or other security for which a closing sale price must
be determined) generally occurs on The NASDAQ Capital Market or, if
the Common Stock (or such other security) is not then listed on The
NASDAQ Capital 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 and
(ii) a Last Reported Sale Price for the Common Stock (or such
other security) is available on such securities exchange or market;
provided that if the Common
Stock (or such other security) is not so listed or traded,
“Trading Day”
means a Business Day; and provided further that, for purposes of
determining amounts due upon conversion and the number of shares of
Common Stock deliverable in respect of an Interest Make-Whole
Payment if the Company elects (or is deemed to have elected) to
make an Interest Make-Whole Payment in shares of its Common Stock
only, “Trading
Day” means a day on which (x) there is no Market
Disruption Event and (y) trading in the Common Stock generally
occurs on The NASDAQ Capital Market or, if the Common Stock is not
then listed on The NASDAQ Capital 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, except that if the Common Stock is not so listed or
admitted for trading, “Trading Day” means a Business
Day.
14
“Trading Price” of the Notes on any
date of determination means the average of the secondary market bid
quotations obtained by the Bid Solicitation Agent for $2,000,000
principal amount of Notes at approximately 3:30 p.m., New York
City time, on such determination date from three independent
nationally recognized securities dealers the Company selects for
this purpose; 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 Notes
from a nationally recognized securities dealer on any determination
date, then the Trading Price per $1,000 principal amount of Notes
on such determination date shall be deemed to be less than 98% of
the product of the Last Reported Sale Price of the Common Stock and
the Conversion Rate.
“transfer” shall have the meaning
specified in Section 2.05(c).
“Trigger Event” shall have the
meaning specified in Section 14.04(c).
“Trust Indenture Act” means the
Trust Indenture Act of 1939, as amended, as it was in force at the
date of execution of this Indenture; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after the date hereof, the term
“Trust Indenture Act” shall mean, to the extent
required by such amendment, the Trust Indenture Act of 1939, as so
amended.
“Trustee” means the Person named as
the “Trustee” in
the first paragraph of this Indenture until a successor trustee
shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter “Trustee” shall mean or include
each Person who is then a Trustee hereunder.
“U.S. GAAP” means generally
accepted accounting principles in the United States as in effect on
the date of this Indenture, without giving effect to ASU 2016-02,
Leases (Topic 842).
“unit of Reference Property” shall
have the meaning specified in Section 14.07(a).
“Valuation Period” shall have the
meaning specified in Section 14.04(c).
“Wholly Owned Subsidiary” means,
with respect to any Person, any Subsidiary of such Person, except
that, solely for purposes of this definition, the reference to
“more than 50%” in the definition of
“Subsidiary” shall be deemed replaced by a reference to
“100%”.
Section
1.02 References to
Interest. Unless the context otherwise
requires, any reference to interest on, or in respect of, any Note
in this Indenture shall be deemed to include Additional Interest
if, in such context, Additional Interest is, was or would be
payable pursuant to any of Section 4.06(d) and
Section 6.03
hereof or pursuant to the Registration Rights Agreement. Unless the
context otherwise requires, any express mention of Additional
Interest in any provision hereof shall not be construed as
excluding Additional Interest in those provisions hereof where such
express mention is not made.
15
ARTICLE 2
ISSUE, DESCRIPTION,
EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
Section 2.01
Designation and
Amount. The Notes shall be designated as the
“6.75% Convertible Senior Notes due 2025.” The
aggregate principal amount of Notes that may be authenticated and
delivered under this Indenture is limited to $38,750,000. Except
for Notes authenticated and delivered upon registration or transfer
of, or in exchange for, or in lieu of other Notes to the extent
expressly permitted hereunder, the Company may not issue additional
Notes without the consent of at least a majority of the aggregate
principal amount of the Notes then outstanding (determined in
accordance with Article
8).
Section 2.02
Form of
Notes. The Notes and the Trustee’s
certificate of authentication to be borne by such Notes shall be
substantially in the respective forms set forth in Exhibit A, the terms and
provisions of which shall constitute, and are hereby expressly
incorporated in and made a part of this Indenture. To the extent
applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Any
Global Note may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with
the provisions of this Indenture as may be required by the
Custodian or the Depositary, or as may be required to comply with
any applicable law or any regulation thereunder or with the rules
and regulations of any securities exchange or automated quotation
system upon which the Notes may be listed or traded or designated
for issuance or to conform with any usage with respect thereto, or
to indicate any special limitations or restrictions to which any
particular Notes are subject.
Any of
the Notes may have such letters, numbers or other marks of
identification and such notations, legends or endorsements as the
Officer executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent
with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange
or automated quotation system on which the Notes may be listed or
designated for issuance, or to conform to usage or to indicate any
special limitations or restrictions to which any particular Notes
are subject.
Each
Global Note shall represent such principal amount of the
outstanding Notes as shall be specified therein and shall provide
that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Notes represented thereby
may from time to time be increased or reduced to reflect
redemptions, repurchases, cancellations, conversions, transfers or
exchanges permitted hereby. Any endorsement of a Global Note to
reflect the amount of any increase or decrease in the amount of
outstanding Notes represented thereby shall be made by the Trustee
or the Note Registrar, at the direction of the Trustee, in such
manner and upon instructions given by the Holder of such Notes in
accordance with this Indenture. Payment of principal (including the
Redemption Price and the Fundamental Change Repurchase Price, if
applicable) of, and accrued and unpaid interest on, a Global Note
shall be made to the Holder of such Note on the date of payment,
unless a record date or other means of determining Holders eligible
to receive payment is provided for herein.
16
Section 2.03
Date and Denomination
of Notes; Payments of Interest and Defaulted
Amounts. (a) The Notes shall be issuable only
in registered form without coupons and only in minimum
denominations of $1,000 principal amount and integral multiples of
$1,000 in excess thereof. Each Note shall be dated the date of its
authentication and shall bear interest from, and including, the
date specified on the face of such Note. Accrued interest on the
Notes shall be computed on the basis of a 360-day year composed of
twelve 30-day months and, for partial months, on the basis of the
number of days actually elapsed in a 30-day month.
(b) The
Person in whose name any Note (or its Predecessor Note) is
registered on the Note Register at the close of business on any
Regular Record Date with respect to any Interest Payment Date shall
be entitled to receive the interest payable on such Interest
Payment Date. The principal amount of any Note (x) in the case
of any Physical Note, shall be payable at the office or agency of
the Company maintained by the Company for such purposes in the
contiguous United States, which shall initially be the Corporate
Trust Office and (y) in the case of any Global Note, shall be
payable by wire transfer of immediately available funds to the
account of the Depositary or its nominee. The Company shall pay, or
cause the Paying Agent to pay (to the extent funded by the
Company),interest (i) on any Physical Notes (A) to
Holders holding Physical Notes having an aggregate principal amount
of $5,000,000 or less, by check mailed (at the Company’s
expense) to the Holders of these Notes at their address as it
appears in the Note Register and (B) to Holders holding
Physical Notes having an aggregate principal amount of more than
$5,000,000, either by check mailed to each Holder or, upon
application by such a Holder to the Trustee not later than the
relevant Regular Record Date, by wire transfer in immediately
available funds to that Holder’s account within the United
States, which application shall remain in effect until the Holder
notifies, in writing, the Trustee to the contrary or (ii) on
any Global Note by wire transfer of immediately available funds to
the account of the Depositary or its nominee.
(c) Any
Defaulted Amounts shall forthwith cease to be payable to the Holder
on the relevant payment date but shall accrue interest per annum at
the rate borne by the Notes, subject to the enforceability thereof
under applicable law, from, and including, such relevant payment
date, and such Defaulted Amounts together with such interest
thereon shall be paid by the Company, at its election in each case,
as provided in clause (i) or (ii) below:
17
(i) The
Company may elect to make payment of any Defaulted Amounts to the
Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a special record
date for the payment of such Defaulted Amounts, which shall be
fixed in the following manner. The Company shall notify the Trustee
in writing of the amount of the Defaulted Amounts proposed to be
paid on each Note and the date of the proposed payment (which shall
be not less than 25 days after the receipt by the Trustee of such
notice), and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount to be paid
in respect of such Defaulted Amounts or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the
date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted
Amounts as in this clause provided. Thereupon the Company shall fix
a special record date for the payment of such Defaulted Amounts
which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment, and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Company shall promptly notify the Trustee of such
special record date at least five (5) Business Days before
such notice is to be sent to the Holders, and the Trustee, in the
name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Amounts and the special record
date therefor to be sent to each Holder not less than 10 days
prior to such special record date. Notice of the proposed payment
of such Defaulted Amounts and the special record date therefor
having been so sent, such Defaulted Amounts shall be paid to the
Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on such special
record date and shall no longer be payable pursuant to the
following clause (ii) of this Section 2.03(c).
The Trustee shall have no responsibility for the calculation of
Defaulted Amounts.
(ii) The
Company may make payment of any Defaulted Amounts in any other
lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the
Notes may be listed or designated for issuance, and upon such
notice as may be required by such exchange or automated quotation
system, if, after written notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be practicable in consultation with the
Trustee.
Section
2.04
Execution,
Authentication and Delivery of Notes. The Notes shall be signed in the name
and on behalf of the Company by the manual or facsimile signature
by one of its Chief Executive Officer, President, Chief Financial
Officer, Treasurer, Secretary or any of its Executive or Senior
Vice Presidents.
At any
time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes executed by the Company to
the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Notes, such Company Order
to specify the amount of Notes to be authenticated, the applicable
rate at which interest will accrue on such Notes, the date on which
the original issuance of such Notes is to be authenticated, the
date from which interest on such Notes will begin to accrue, the
date or dates on which interest on such Notes will be payable and
the date on which the principal of such Notes will be payable and
other terms relating to such Notes; provided that the Trustee shall
be entitled to receive an Officers’ Certificate and an
Opinion of Counsel with respect to the issuance, authentication and
delivery of such Notes as provided in Section 17.05. The Trustee
shall thereupon in accordance with such Company Order manually
authenticate and deliver such Notes, without any further action by
the Company hereunder.
Only
such Notes as shall bear thereon a certificate of authentication
substantially in the form set forth on the Form of Note attached as
Exhibit A
hereto, executed manually by an authorized officer of the Trustee
(or an authenticating agent appointed by the Trustee as provided by
Section 17.10), shall be
entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. Such certificate by the Trustee (or
such an authenticating agent) upon any Note executed by the Company
shall be conclusive evidence that the Note so authenticated has
been duly authenticated and delivered hereunder and that the Holder
is entitled to the benefits of this Indenture.
In case
any Officer of the Company who shall have signed any of the Notes
shall cease to be such Officer before the Notes so signed shall
have been authenticated and delivered by the Trustee, or disposed
of by the Company, such Notes nevertheless may be authenticated and
delivered or disposed of as though the person who signed such Notes
had not ceased to be such Officer of the Company; and any Note may
be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Note, shall be the Officers of
the Company, although at the date of the execution of this
Indenture any such person was not such an Officer.
18
Section
2.05
Exchange
and Registration of Transfer of Notes; Restrictions on Transfer;
Depositary. (a) The Company shall cause to be
kept at the Corporate Trust Office a register (the register
maintained in such office or in any other office or agency of the
Company designated pursuant to Section 4.02, the
“Note Register”)
in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Notes
and of transfers of Notes. Such register shall be in written form
or in any form capable of being converted into written form within
a reasonable period of time. The Trustee is hereby initially
appointed the “Note
Registrar” for the purpose of registering Notes and
transfers of Notes as herein provided. The Company may appoint one
or more co-Note Registrars in accordance with Section 4.02.
Upon
surrender for registration of transfer of any Note to the Note
Registrar or any co-Note Registrar, and satisfaction of the
requirements for such transfer set forth in this Section 2.05, the Company
shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more
new Notes of any authorized denominations and of a like aggregate
principal amount and bearing such restrictive legends as may be
required by this Indenture.
Notes
may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the
Notes to be exchanged at any such office or agency maintained by
the Company pursuant to Section 4.02. Whenever any
Notes are so surrendered for exchange, the Company shall execute,
and the Trustee shall authenticate and deliver, the Notes that the
Holder making the exchange is entitled to receive, bearing
registration numbers not contemporaneously
outstanding.
All
Notes presented or surrendered for registration of transfer or for
exchange, repurchase or conversion shall (if so required by the
Company, the Trustee, the Note Registrar or any co-Note Registrar)
be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the
Note Registrar and duly executed, by the Holder thereof or its
attorney-in-fact duly authorized in writing. Each Holder presenting
or surrendering for registration or transfer or for exchange shall
(if so required by the Trustee), provide to the Trustee such security or
indemnity satisfactory to the Trustee against any loss, liability
or expense to be incurred therein or thereby.
No
service charge shall be imposed by the Company, the Trustee, the
Note Registrar, any co-Note Registrar or the Paying Agent for any
exchange or registration of transfer of Notes, but the Company may
require a Holder to pay a sum sufficient to cover any documentary,
stamp or similar issue or transfer tax required in connection
therewith as a result of the name of the Holder of new Notes issued
upon such exchange or registration of transfer being different from
the name of the Holder of the old Notes surrendered for exchange or
registration of transfer.
None of
the Company, the Trustee, the Note Registrar or any co-Note
Registrar shall be required to exchange or register a transfer of
(i) any Notes surrendered for conversion or, if a portion of
any Note is surrendered for conversion, such portion thereof
surrendered for conversion, (ii) any Notes, or a portion of
any Note, surrendered for repurchase (and not withdrawn) in
accordance with Article 15 or
(iii) any Notes selected for redemption in accordance with
Article 16,
except the unredeemed portion of any Note being redeemed in
part.
19
All
Notes issued upon any registration of transfer or exchange of Notes
in accordance with this Indenture 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.
(b) So
long as the Notes are eligible for book-entry settlement with the
Depositary, unless otherwise required by law, subject to the fourth
paragraph from the end of Section 2.05(c)
all Notes shall be represented by one
or more Notes in global form (each, a “Global Note”) registered in the name of the Depositary
or the nominee of the Depositary. The transfer and exchange of
beneficial interests in a Global Note that does not involve the
issuance of a Physical Note shall be effected through the
Depositary (but not the Trustee or the Custodian) in accordance
with this Indenture (including the restrictions on transfer set
forth herein) and the procedures of the Depositary
therefor.
(c) Every
Note that bears or is required under this Section 2.05(c)
to bear the legend set forth in
this Section 2.05(c)
(together with any Common Stock issued
upon conversion of the Notes that is required to bear the legend
set forth in Section 2.05(d),
collectively, the “Restricted
Securities”) shall be
subject to the restrictions on transfer set forth in this
Section 2.05(c)
(including the legend set forth
below), unless such restrictions on transfer shall be eliminated or
otherwise waived by written consent of the Company, and the Holder
of each such Restricted Security, by such Holder’s acceptance
thereof, agrees to be bound by all such restrictions on transfer.
As used in this Section 2.05(c)
and Section 2.05(d),
the term “transfer” encompasses any sale, pledge, transfer or
other disposition whatsoever of any Restricted
Security.
Any
certificate evidencing such Note (and all securities issued in
exchange therefor or substitution thereof, other than Common Stock,
if any, issued upon conversion thereof, which shall bear the legend
set forth in Section 2.05(d), if
applicable) shall bear a legend in substantially the following form
(unless (i) such Notes have been transferred pursuant to a
registration statement that has become or been declared effective
under the Securities Act and that continues to be effective at the
time of such transfer, (ii) such Notes have been or sold pursuant
to the exemption from registration provided by Rule 144 or any
similar provision then in force under the Securities Act, which
results in such Notes not being subject to transfer restrictions
under the Securities Act and pursuant to which the Company
reasonably believes such legend may be removed in compliance with
applicable law, or (iii) otherwise agreed by the Company in
writing, with notice thereof to the Trustee):
THIS
SECURITY AND THE CLASS B 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 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
20
(2) AGREES
FOR THE BENEFIT OF RUMBLEON, INC. (THE “COMPANY”) THAT IT WILL NOT OFFER,
SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL
INTEREST HEREIN, EXCEPT:
(A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT
TO, AND IN ACCORDANCE WITH, A REGISTRATION STATEMENT THAT IS
EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER,
OR
(C) TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, OR
(D) PURSUANT
TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
PRIOR
TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH
CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE
RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN
ORDER FOR THE COMPANY TO DETERMINE THAT THE PROPOSED TRANSFER IS
BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE
AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT.
No
transfer of any Note that bears the legend set forth in this
Section 2.05(c) will be registered by the Note Registrar unless the
applicable box on the Form of Assignment and Transfer has been
checked.
Any
Note (or security issued in exchange or substitution therefor)
(i) that has been transferred pursuant to a registration
statement that has become effective or been declared effective
under the Securities Act and that continues to be effective at the
time of such transfer or (ii) that has been sold pursuant to
the exemption from registration provided by Rule 144 or any
similar provision then in force under the Securities Act which
results in such Notes not being subject to transfer restrictions
under the Securities Act and pursuant to which the Company
reasonably believes such legend may be removed in compliance with
applicable laws, may, upon surrender of such Note for exchange to
the Note Registrar in accordance with the provisions of this
Section 2.05,
be exchanged for a new Note or Notes, of like tenor and aggregate
principal amount, which shall not bear the restrictive legend
required by this Section 2.05(c) and shall
not be assigned a restricted CUSIP number. The Company shall be
entitled to instruct the Custodian in writing to so surrender any
Global Note as to which any of the conditions set forth in
clause (i) through (iii) of the immediately preceding sentence
have been satisfied, and, upon such instruction, the Custodian
shall so surrender such Global Note for exchange in accordance with
the applicable procedures of the Depositary; and any new Global
Note so exchanged therefor shall not bear the restrictive legend
specified in this Section 2.05(c) and shall
not be assigned a restricted CUSIP number. The Company shall
promptly notify the Trustee after a registration statement, if any,
with respect to the Notes or any Common Stock issued upon
conversion of the Notes has been declared effective under the
Securities Act. Any exchange pursuant to the forgoing paragraph
shall be in accordance with the applicable procedures of the
Depositary.
21
Notwithstanding any
other provisions of this Indenture (other than the provisions set
forth in this Section 2.05(c)), a Global
Note may not be transferred as a whole or in part except
(i) by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of
the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary and
(ii) for exchange of a Global Note or a portion thereof for
one or more Physical Notes in accordance with the second
immediately succeeding paragraph.
The
Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to
act as Depositary with respect to each Global Note. Initially, each
Global Note shall be issued to the Depositary, registered in the
name of Cede & Co., as the nominee of the Depositary, and
deposited with the Trustee as custodian for Cede &
Co.
If
(i) the Depositary notifies the Company at any time that the
Depositary is unwilling or unable to continue as depositary for the
Global Notes and a successor depositary is not appointed within
90 days, (ii) the Depositary ceases to be registered as a
clearing agency under the Exchange Act and a successor depositary
is not appointed within 90 days or (iii) an Event of Default
with respect to the Notes has occurred and is continuing, subject
to the Depositary’s applicable procedures, and a beneficial
owner of any Note requests that its beneficial interest therein be
issued as a Physical Note, the Company shall execute, and the
Trustee, upon receipt of an Officers’ Certificate and a
Company Order for the authentication and delivery of Notes, shall
authenticate and deliver (x) in the case of clause (iii),
a Physical Note to such beneficial owner in a principal amount
equal to the principal amount of such Note corresponding to such
beneficial owner’s beneficial interest and (y) in the
case of clause (i) or (ii), Physical Notes to each beneficial
owner of the related Global Notes (or a portion thereof) in an
aggregate principal amount equal to the aggregate principal amount
of such Global Notes in exchange for such Global Notes, and upon
delivery of the Global Notes to the Trustee such Global Notes shall
be canceled.
Physical Notes
issued in exchange for all or a part of the Global Note pursuant to
this Section 2.05(c) shall be
registered in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, or, in the case of clause
(iii) of the immediately preceding paragraph, the relevant
beneficial owner, shall instruct the Trustee. Upon execution and
authentication, the Trustee shall deliver such Physical Notes to
the Persons in whose names such Physical Notes are so
registered.
At such
time as all interests in a Global Note have been converted,
canceled, repurchased, redeemed or transferred, such Global Note
shall be, upon receipt thereof, canceled by the Trustee in
accordance with standing procedures and existing instructions
between the Depositary and the Custodian. At any time prior to such
cancellation, if any interest in a Global Note is exchanged for
Physical Notes, converted, canceled, repurchased, redeemed or
transferred to a transferee who receives Physical Notes therefor or
any Physical Note is exchanged or transferred for part of such
Global Note, the principal amount of such Global Note shall, in
accordance with the standing procedures and instructions existing
between the Depositary and the Custodian, be appropriately reduced
or increased, as the case may be, and an endorsement shall be made
on such Global Note, by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction or
increase.
22
None of
the Company, the Trustee, the Paying Agent, the Conversion Agent or
any agent of the Company or the Trustee shall have any
responsibility or liability for the payment of amounts to
beneficial holders, any aspect of the records relating to or
payments made on account of beneficial ownership interests of a
Global Note or maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
(d) Any
stock certificate representing Common Stock issued upon conversion
of a Note (including any Common Stock delivered in connection with
the payment of an Interest Make-Whole Payment) shall bear a legend
in substantially the following form (unless (i) such Common Stock
has been transferred pursuant to a registration statement that has
become or been declared effective under the Securities Act and that
continues to be effective at the time of such transfer, or (ii) the
Note or such Common Stock has been sold pursuant to the exemption
from registration provided by Rule 144 or any similar
provision then in force under the Securities Act, which results in
such Common Stock not being subject to transfer restrictions under
the Securities Act and pursuant to which the Company reasonably
believes such legend may be removed in compliance with applicable
law, or (iii) such Common Stock has been issued upon conversion of
a Note that has transferred pursuant to a registration statement
that has become or been declared effective under the Securities Act
and that continues to be effective at the time of such transfer, or
pursuant to the exemption from registration provided by
Rule 144 or any similar provision then in force under the
Securities Act, which results in such Notes not being subject to
transfer restrictions under the Securities Act and pursuant to
which the Company reasonably believes such legend may be removed in
compliance with applicable law, or unless otherwise agreed by the
Company with written notice thereof to the Trustee and any transfer
agent for the Common Stock):
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES
ACT”), AND 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 RUMBLEON, INC. (THE “COMPANY”) THAT IT WILL NOT OFFER,
SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL
INTEREST HEREIN, EXCEPT:
(A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT
TO, AND IN ACCORDANCE WITH A REGISTRATION STATEMENT THAT IS
EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER,
OR
(C) TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, OR
23
(D) PURSUANT
TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
PRIOR
TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH
CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRANSFER AGENT FOR
THE COMPANY’S CLASS B COMMON STOCK RESERVE THE RIGHT TO
REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR
OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER FOR THE
COMPANY TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN
COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.
Any
such Common Stock (i) as to which such restrictions on
transfer shall have expired in accordance with their terms,
(ii) that has been transferred pursuant to a registration
statement that has become or been declared effective under the
Securities Act and that continues to be effective at the time of
such transfer or (iii) that has been sold pursuant to the
exemption from registration provided by Rule 144 or any
similar provision then in force under the Securities Act, which
results in such Common Stock not being subject to transfer
restrictions under the Securities Act and pursuant to which the
Company reasonably believes such legend may be removed in
compliance with applicable law, may, upon surrender of the
certificates representing such shares of Common Stock for exchange
in accordance with the procedures of the transfer agent for the
Common Stock, be exchanged for a new certificate or certificates
for a like aggregate number of shares of Common Stock, which shall
not bear the restrictive legend required by this Section 2.05(d).
(e) Any
Note or Common Stock issued upon the conversion or exchange of a
Note that is repurchased or owned by any Affiliate of the Company
(or any Person who was an Affiliate of the Company at any time
during the three months immediately preceding) may not be resold by
such Affiliate (or such Person, as the case may be) unless
registered under the Securities Act or resold pursuant to an
exemption from the registration requirements of the Securities Act
in a transaction that results in such Note or Common Stock, as the
case may be, no longer being a “restricted security”
(as defined under Rule 144). The Company shall cause any Note
that is repurchased or owned by it to be surrendered to the Trustee
for cancellation in accordance with Section 2.08.
(f) The
Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any securities laws or 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.
(g) Neither
the Trustee nor any agent shall have any responsibility or
liability for any actions taken or not taken by the
Depositary.
24
Section
2.06
Mutilated,
Destroyed, Lost or Stolen Notes. In case any Note shall become
mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon receipt of a Company Order the
Trustee or an authenticating agent appointed by the Trustee shall
authenticate and deliver, a new Note, bearing a registration number
not contemporaneously outstanding, in exchange and substitution for
the mutilated Note, or in lieu of and in substitution for the Note
so destroyed, lost or stolen. In every case the applicant for a
substituted Note shall furnish to the Company, to the Trustee and,
if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless
from any loss, liability, cost or expense caused by or connected
with such substitution, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent evidence
to their satisfaction of the destruction, loss or theft of such
Note and of the ownership thereof.
The
Trustee or such authenticating agent may authenticate any such
substituted Note and deliver the same upon the receipt of a Company
Order and such security or indemnity as the Trustee, the Company
and, if applicable, such authenticating agent may require. No
service charge shall be imposed by the Company, the Trustee, the
Note Registrar, any co-Note Registrar or the Paying Agent upon the
issuance of any substitute Note, but the Company may require a
Holder to pay a sum sufficient to cover any documentary, stamp or
similar issue or transfer tax required in connection therewith as a
result of the name of the Holder of the new substitute Note being
different from the name of the Holder of the old Note that became
mutilated or was destroyed, lost or stolen. In case any Note that
has matured or is about to mature or has been surrendered for
required repurchase or is about to be converted in accordance with
Article 14
shall become mutilated or be destroyed, lost or stolen, the Company
may, in its sole discretion, instead of issuing a substitute Note,
pay or authorize the payment of or convert or authorize the
conversion of the same (without surrender thereof except in the
case of a mutilated Note), as the case may be, if the applicant for
such payment or conversion shall furnish to the Company, to the
Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of
them harmless for any loss, liability, cost or expense caused by or
connected with such substitution, and, in every case of
destruction, loss or theft, evidence satisfactory to the Company,
the Trustee and, if applicable, any Paying Agent or Conversion
Agent evidence of their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.
Every
substitute Note issued pursuant to the provisions of this
Section 2.06
by virtue of the fact that any Note is destroyed, lost or stolen
shall constitute an additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Note shall be
found at any time, and shall be entitled to all the benefits of
(but shall be subject to all the limitations set forth in) this
Indenture equally and proportionately with any and all other Notes
duly issued hereunder. To the extent permitted by law, all Notes
shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement,
payment, redemption, conversion or repurchase of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all
other rights or remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the
replacement, payment, redemption, conversion or repurchase of
negotiable instruments or other securities without their
surrender.
25
Section
2.07
Temporary
Notes. Pending the preparation of Physical
Notes, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon written request of the
Company, authenticate and deliver temporary Notes (printed or
lithographed). Temporary Notes shall be issuable in any authorized
denomination, and substantially in the form of the Physical Notes
but with such omissions, insertions and variations as may be
appropriate for temporary Notes, all as may be determined by the
Company. Every such temporary Note shall be executed by the Company
and authenticated by the Trustee or such authenticating agent upon
the same conditions and in substantially the same manner, and with
the same effect, as the Physical Notes. Without unreasonable delay,
the Company shall execute and deliver to the Trustee or such
authenticating agent Physical Notes (other than any Global Note)
and thereupon any or all temporary Notes (other than any Global
Note) may be surrendered in exchange therefor, at each office or
agency maintained by the Company pursuant to Section 4.02 and the
Trustee or such authenticating agent upon receipt of a Company
Order shall authenticate and deliver in exchange for such temporary
Notes an equal aggregate principal amount of Physical Notes. Such
exchange shall be made by the Company at its own expense and
without any charge therefor. Until so exchanged, the temporary
Notes shall in all respects be entitled to the same benefits and
subject to the same limitations under this Indenture as Physical
Notes authenticated and delivered hereunder.
Section
2.08
Cancellation of Notes
Paid, Converted, Etc. The Company shall
cause all Notes surrendered for the purpose of payment, repurchase,
redemption, registration of transfer or exchange or conversion, if
surrendered to any Person other than the Trustee (including any of
the Company’s agents, Subsidiaries or Affiliates), to be
surrendered to the Trustee for cancellation. All Notes delivered to
the Trustee shall be canceled promptly by it, and, except for Notes
surrendered for transfer or exchange, no Notes shall be
authenticated in exchange thereof except as expressly permitted by
any of the provisions of this Indenture. The Trustee shall deliver
an acknowledgment of such cancellation to the Company, at the
Company’s written request in a Company Order.
Section
2.09 CUSIP
Numbers. The Company in issuing the Notes may
use “CUSIP” numbers (if then generally in use), and, if
so, the Trustee shall use “CUSIP” numbers in all
notices issued to Holders as a convenience to such Holders;
provided that any such
notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or on
such notice and that reliance may be placed only on the other
identification numbers printed on the Notes. The Company shall
promptly notify the Trustee in writing of any change in the
“CUSIP” numbers.
Section
2.10
Repurchases.
The Company may, to the extent permitted by law, and directly or
indirectly (regardless of whether such Notes are surrendered to the
Company), repurchase Notes in the open market or otherwise, whether
by the Company or its Subsidiaries or through a private or public
tender or exchange offer or through counterparties to private
agreements, including by cash-settled swaps or other derivatives.
The Company shall cause any Notes so repurchased (other than Notes
repurchased pursuant to cash-settled swaps or other derivatives) to
be surrendered to the Trustee for cancellation in accordance with
Section 2.08,
and the Trustee and no one else shall cancel all Notes so
surrendered and such Notes shall no longer be considered
outstanding under this Indenture upon their
cancellation.
26
ARTICLE 3
SATISFACTION AND
DISCHARGE
Section 3.01
Satisfaction and
Discharge. This Indenture shall upon request of
the Company contained in an Officers’ Certificate cease to be
of further effect, and the Trustee, at the expense of the Company,
shall execute such instruments acknowledging satisfaction and
discharge of this Indenture as reasonably requested by the Company,
when (a) (i) all Notes theretofore authenticated and
delivered (other than Notes which have been destroyed, lost or
stolen and which have been replaced, paid or converted as provided
in Section 2.06) have been
delivered to the Trustee for cancellation; or (ii) the Company
has deposited with the Trustee or delivered to Holders, as
applicable, after the Notes have become due and payable, whether on
the Maturity Date, any Redemption Date, any Fundamental Change
Repurchase Date, upon conversion or otherwise, cash or cash, shares
of Common Stock or a combination thereof, as applicable (which
shall be delivered directly to the Holders and not to the Trustee),
solely to satisfy the Company’s Conversion Obligation,
sufficient to pay all of the outstanding Notes and all other sums
due and payable under this Indenture by the Company, including any
Interest Make-Whole Payment; and (b) the Company has delivered
to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture
have been complied with. Notwithstanding the satisfaction and
discharge of this Indenture, the obligations of the Company to the
Trustee under Section 7.06 shall
survive.
ARTICLE 4
PARTICULAR
COVENANTS OF THE COMPANY
Section 4.01
Payment of Principal
and Interest. The Company covenants and agrees that
it will cause to be paid the principal (including the Redemption
Price and the Fundamental Change Repurchase Price, if applicable)
of, and accrued and unpaid interest on, each of the Notes at the
places, at the respective times and in the manner provided herein
and in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than
the Company, holds as of 12:00 p.m. (New York City time) on the due
date money deposited by the Company in immediately available funds
and designated for and sufficient to pay all principal, premium, if
any, and interest then due.
Section
4.02
Maintenance of Office
or Agency. The Company will maintain in the
contiguous United States an office or agency where the Notes may be
surrendered for registration of transfer or exchange or for
presentation for payment or repurchase (“Paying Agent”) or for conversion
(“Conversion
Agent”). 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
and surrenders may be made or served at the Corporate Trust
Office.
The
Company may also from time to time designate as co-Note Registrars
one or more other offices or agencies where the Notes may be
presented or surrendered for any or all such purposes and may from
time to time rescind such designations; provided that no such designation or
rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the contiguous 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
(other than for purposes of Article 15, which shall be appointed by
the Company in connection with a Fundamental Change), Note
Registrar, Custodian and Conversion Agent and the Corporate Trust
Office as the office or agency in the contiguous United States,
where Notes may be surrendered for registration of transfer or
exchange or for presentation for payment or repurchase or for
conversion.
27
Section
4.03
Appointments to Fill
Vacancies in Trustee’s Office. The Company, whenever necessary to
avoid or fill a vacancy in the office of Trustee, will appoint, in
the manner provided in Section 7.09, a Trustee,
so that there shall at all times be a Trustee
hereunder.
Section
4.04
Provisions
as to Paying Agent. (a) If the Company shall appoint a
Paying Agent other than the Trustee, the Company will cause such
Paying Agent to execute and deliver to the Trustee an instrument in
which such agent shall agree with the Trustee, subject to the
provisions of this Section 4.04:
(i) that
it will hold all sums held by it as such agent for the payment of
the principal (including the Redemption Price and the Fundamental
Change Repurchase Price, if applicable) of, and accrued and unpaid
interest on, the Notes in trust for the benefit of the Holders of
the Notes;
(ii)
that it will give the Trustee prompt
written notice of any failure by the Company to make any payment of
the principal (including the Redemption Price and the Fundamental
Change Repurchase Price, if applicable) of, and accrued and unpaid
interest on, 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
(including the Redemption Price and the Fundamental Change
Repurchase Price, if applicable) of, or accrued and unpaid interest
on, the Notes, deposit with the Paying Agent a sum in immediately
available funds sufficient to pay such principal (including the
Redemption Price and the Fundamental Change Repurchase Price, if
applicable) or accrued and unpaid interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee
in writing of any failure to take such action; provided that if such deposit is made
on the due date, such deposit must be received by the Paying Agent
by 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 (including the Redemption
Price and the Fundamental Change Repurchase Price, if applicable)
of, and accrued and unpaid interest on, the Notes, set aside,
segregate and hold in trust for the benefit of the Holders of the
Notes a sum sufficient to pay such principal (including the
Redemption Price and the Fundamental Change Repurchase Price, if
applicable) and accrued and unpaid interest so becoming due and
will promptly notify the Trustee in writing of any failure to take
such action and of any failure by the Company to make any payment
of the principal (including the Redemption Price and the
Fundamental Change Repurchase Price, if applicable) of, or accrued
and unpaid interest on, the Notes when the same shall become due
and payable. The Company or any Affiliate of the Company may act as
Paying Agent (except for the purposes of Article 3).
Upon the occurrence of any Event of Default under
Section 6.01(i)
or Section 6.01(j),
the Trustee shall automatically be the Paying
Agent.
(c) Anything
in this Section 4.04
to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other
reason, pay, cause to be paid or deliver to the Trustee all sums or
amounts held in trust by the Company or any Paying Agent hereunder
as required by this Section 4.04,
such sums or amounts to be held by the Trustee upon the trusts
herein contained and upon such payment or delivery by the Company
or any Paying Agent to the Trustee, the Company or such Paying
Agent shall be released from all further liability but only with
respect to such sums or amounts.
28
(d) Subject
to applicable abandoned property laws, any money or property
deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal (including the
Redemption Price and the Fundamental Change Repurchase Price, if
applicable) of, accrued and unpaid interest on and the
consideration due upon conversion of any Note and remaining
unclaimed for two years after such principal (including the
Redemption Price and the Fundamental Change Repurchase Price, if
applicable), interest or consideration due upon conversion has
become due and payable shall be paid or delivered, as the case may
be, to the Company on request of the Company contained in an
Officers’ 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 or property, and
all liability of the Company as trustee thereof, shall thereupon
cease.
Section
4.05
Existence.
Subject to Article 11, the Company
shall do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence.
Section
4.06
Rule 144A
Information Requirement and Annual
Reports.
(a) At any time the Company is not subject to Section 13 or
15(d) of the Exchange Act, the Company shall, so long as any of the
Notes or any shares of Common Stock issuable upon conversion
thereof shall, at such time, constitute “restricted
securities” within the meaning of Rule 144(a)(3) under
the Securities Act, promptly deliver to the Trustee and, upon
written request, any Holder, beneficial owner or prospective
purchaser of such Notes or any shares of Common Stock issuable upon
conversion of such Notes, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act to
facilitate the resale of such Notes or shares of Common Stock
pursuant to Rule 144A. The Company shall take such further
action as any Holder or beneficial owner of such Notes or such
Common Stock may reasonably request to the extent from time to time
required to enable such Holder or beneficial owner to sell such
Notes or shares of Common Stock in accordance with Rule 144A,
as such rule may be amended from time to time.
(b) The
Company shall deliver to the Trustee, within 15 days after the
same are required to be filed with the Commission, copies of any
documents or reports that the Company is required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act
(giving effect to any grace period provided by Rule 12b-25
under the Exchange Act). Any such document or report that the
Company files with the Commission via the Commission’s EDGAR
system shall be deemed to be delivered to the Trustee for purposes
of this Section 4.06(b)
at the time such documents are filed
via the EDGAR system, it being understood that the Trustee shall
not be responsible for determining whether such filings have been
made.
(c) Delivery
of the reports and documents described in subsection (b) above
to the Trustee is for informational purposes only, and the
Trustee’s receipt of such shall not constitute actual or
constructive notice or knowledge of any information contained
therein or determinable from information contained therein,
including the Company’s compliance with any of its covenants
hereunder (as to which the Trustee is entitled to conclusively rely
on an Officers’ Certificate).
29
(d) If,
at any time during the six-month period beginning on, and
including, the date that is six months after January 14, 2020, the
Company fails to timely file any document or report that it is
required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act, as applicable (after giving effect to
all applicable grace periods thereunder and other than reports on
Form 8-K), or the Notes are not otherwise freely tradable pursuant
to Rule 144 by Holders other than the Company’s
Affiliates or Holders that were the Company’s Affiliates at
any time during the three months immediately preceding (as a result
of restrictions pursuant to U.S. securities laws or the terms of
this Indenture or the Notes), the Company shall pay Additional
Interest on such Notes. Such Additional Interest shall accrue on
such Notes at the rate of 0.50% per annum of the principal amount
of such Notes outstanding for each day during such period for which
the Company’s failure to file has occurred and is continuing
or such Notes are not otherwise freely tradable pursuant to
Rule 144 by Holders other than the Company’s Affiliates
(or Holders that were the Company’s Affiliates at any time
during the three months immediately preceding). As used in
this Section 4.06(d),
documents or reports that the Company is required to
“file” with the Commission pursuant to Section 13
or 15(d) of the Exchange Act does not include documents or reports
that the Company furnishes to the Commission pursuant to
Section 13 or 15(d) of the Exchange Act.
(e) Additional
Interest will be payable in arrears on each Interest Payment Date
following accrual in the same manner as regular interest on the
Notes.
(f) The
Additional Interest that is payable in accordance with
Section 4.06(d)
shall be in addition to, and not in
lieu of, any Additional Interest that may be payable as a result of
the Company’s election pursuant to Section 6.03
hereof or pursuant to the Registration
Rights Agreement.
(g) If
Additional Interest is payable by the Company pursuant to
Section 4.06(d),
the Company shall deliver to the Trustee an Officers’
Certificate stating (i) the amount of such Additional Interest
that is payable, (ii) the date on which such Additional
Interest is payable and (iii) accompanied by a form of notice to be
delivered to Holders of such Additional Interest payment with a
direction to the Trustee to deliver such notice to the Holders.
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 such Additional Interest directly to the
Persons entitled to it, the Company shall deliver to the Trustee an
Officers’ Certificate setting forth the particulars of such
payment.
Section
4.07
Stay,
Extension and Usury Laws. The Company covenants (to the extent
that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension or usury law or other law that
would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter
in force, or that may affect the covenants or the performance of
this Indenture; and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section
4.08
Compliance
Certificate; Statements as to Defaults. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of
the Company (beginning with the fiscal year ending on
December 31, 2019) an Officers’ Certificate stating
whether the signers thereof have knowledge of any failure by the
Company to comply with all conditions and covenants then required
to be performed under this Indenture, any Default or Event of
Default, and, if so, specifying each such failure, the nature
thereof and what actions the Company is taking or proposes to take
with respect thereto.
30
In
addition, the Company shall deliver to the Trustee, as soon as
possible, and in any event within 30 days after the occurrence of
any Event of Default or Default, an Officers’ Certificate
setting forth the details of such Event of Default or Default, its
status and the action that the Company is taking or proposing to
take in respect thereof. Unless and until a Responsible Officer of
the Trustee shall have received such Officers’ Certificate,
the Trustee shall not be deemed to have knowledge of any such Event
of Default or Default.
Section 4.09
Additional Interest
pursuant to the Registration Rights
Agreement. If Additional
Interest is payable by the Company pursuant to the Registration
Rights Agreement, the Company shall deliver to the Trustee an
Officers’ Certificate to that effect stating (a) the amount
of such Additional Interest that is payable, (b) the date on which
such interest is payable and (c) accompanied by a form of notice to
be delivered to Holders of such Additional Interest payment with a
direction to the Trustee to deliver such notice to the Holders.
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.
Section
4.10 Limitation on Liens
Securing Indebtedness. The Company will not, nor will the
Company permit any of its Subsidiaries to create, assume or suffer
to exist any Lien to secure Indebtedness on any asset now owned or
hereafter acquired by the Company or any of its Subsidiaries except
for Permitted Liens; provided, however, that any Lien on such asset
shall be permitted notwithstanding that it is not a Permitted Lien
if all payments due under this Indenture and the Notes are secured
on an equal and ratable (or senior) basis with the obligations so
secured by such Lien until such time as such obligations are no
longer secured by a Lien.
The
foregoing covenant will immediately terminate, and any then
existing default thereof will immediately be deemed cured, upon the
earliest to occur of: (i) a Fundamental Change described in clause
(1) or (2) of the definition thereof, (ii) such time as less than
$3.0 million aggregate principal amount of Notes are outstanding
and (iii) both of (x) the conclusion of any 30 Trading Day period
during which the Last Reported Sale Price of the Common Stock has
been at least 150% of the Conversion Price then in effect for at
least 20 Trading Days (whether or not consecutive) and (y) the
initial effectiveness of the registration statement filed pursuant
to the Company’s obligations under the Registration Rights
Agreement. Any Lien created for the benefit of the Holders pursuant
to the foregoing covenant shall provide by its terms that such Lien
shall be automatically and unconditionally released and discharged
upon the earlier of (x) the termination of such Indebtedness and
(y) the termination of the foregoing covenant.
Section
4.11 Further Instruments
and Acts. Upon request of the Trustee, the
Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry
out more effectively the purposes of this Indenture.
31
ARTICLE 5
LISTS OF HOLDERS
AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section
5.01
Lists of
Holders. The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee,
semi-annually, not more than 5 days after each December 15 and
June 15 in each year beginning with June 15, 2020, and at
such other times as the Trustee may request in writing, within 15
days after receipt by the Company of any such request (or such
lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it
hereunder), a list in such form as the Trustee may reasonably
require of the names and addresses of the Holders as of a date not
more than 15 days (or such other date as the Trustee may reasonably
request in order to so provide any such notices) prior to the time
such information is furnished, except that no such list need be
furnished so long as the Trustee is acting as Note
Registrar.
Section
5.02 Preservation and
Disclosure of Lists. The Trustee shall preserve, in as
current a form as is reasonably practicable, all information as to
the names and addresses of the Holders contained in the most recent
list furnished to it as provided in Section 5.01 or maintained
by the Trustee in its capacity as Note Registrar, if so acting. The
Trustee may destroy any list furnished to it as provided in
Section 5.01
upon receipt of a new list so furnished.
ARTICLE 6
DEFAULTS AND
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 days;
(b) default
in the payment of principal of any Note when due and payable on the
Maturity Date, upon Optional Redemption, upon any required
repurchase, upon declaration of acceleration or
otherwise;
(c) failure
by the Company to comply with its obligation to convert the Notes
in accordance with this Indenture upon exercise of a Holder’s
conversion right, including the payment of any Interest Make-Whole
Payment;
(d) failure
by the Company to issue a Fundamental Change Company Notice in
accordance with Section 15.02(c),
notice of the Effective Date of a Make-Whole Fundamental Change in
accordance with Section 14.03(b)
or notice of a specified distribution
or specified Corporate Event in accordance with Section 14.01(b)(ii)
or 14.01(b)(iii),
in each case, when due;
(e) failure
by the Company to comply with its obligations under
Article 11;
(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 has been received by the Company to comply with any of
its other agreements contained in the Notes or this
Indenture;
32
(g) default
by the Company or any Significant Subsidiary of the Company 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
$5,000,000 (or its foreign currency equivalent) in the aggregate of
the Company and/or any such Significant Subsidiary, whether such
indebtedness now exists or shall hereafter be created
(i) resulting in such indebtedness becoming or being declared
due and payable or (ii) constituting a failure to pay the
principal or interest of any such debt when due and payable at its
stated maturity, upon required repurchase, upon declaration of
acceleration or otherwise;
(h) a
final judgment or judgments for the payment of $5,000,000 (or its
foreign currency equivalent) or more (excluding any amounts covered
by insurance) in the aggregate rendered against the Company or any
Subsidiary of the Company, which judgment is not discharged,
bonded, paid, waived or stayed within 90 days after
(i) the date on which the right to appeal thereof has expired
if no such appeal has commenced, or (ii) the date on which all
rights to appeal have been extinguished;
(i) the
Company or any Significant Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or
other relief with respect to the Company or any such Significant
Subsidiary or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar
official of the Company or any such Significant Subsidiary or any
substantial part of its property, 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
(j) an
involuntary case or other proceeding shall be commenced against the
Company or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to the Company or such
Significant Subsidiary or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of the Company or such
Significant Subsidiary or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed
and unstayed for a period of 30 consecutive
days.
Section
6.02
Acceleration;
Rescission and Annulment. If one or more
Events of Default shall have occurred and be continuing (whatever
the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body), then, and in each and every such case (other than an Event
of Default specified in Section 6.01(i) or
Section 6.01(j) with
respect to the Company or any of its Significant Subsidiaries),
unless the principal of all of the Notes shall have already become
due and payable, the Trustee may, or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding determined
in accordance with Section 8.04, by notice in
writing to the Company (and to the Trustee if given by Holders),
may declare 100% of the principal of, and accrued and unpaid
interest on, all the Notes to be due and payable immediately, and
upon any such declaration the same shall become and shall
automatically be immediately due and payable, anything contained in
this Indenture or in the Notes to the contrary notwithstanding. If
an Event of Default specified in Section 6.01(i) or
Section 6.01(j) with
respect to the Company or any of its Significant Subsidiaries
occurs and is continuing, 100% of the principal of, and accrued and
unpaid interest, if any, on, all Notes shall become and shall
automatically be immediately due and payable.
33
The
immediately preceding paragraph, however, is subject to the
conditions that if, at any time after the principal of the Notes
shall have been so declared due and payable, and before any
judgment or decree for the payment of the monies due shall have
been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum in immediately
available funds sufficient to pay installments of accrued and
unpaid interest upon all Notes and the principal of any and all
Notes that shall have become due otherwise than by acceleration
(with interest on overdue installments of accrued and unpaid
interest to the extent that payment of such interest is enforceable
under applicable law, and on such principal at the rate borne by
the Notes at such time) and amounts due to the Trustee pursuant to
Section 7.06,
and if (1) rescission would not conflict with any judgment or
decree of a court of competent jurisdiction and (2) any and
all existing Events of Default under this Indenture, other than the
nonpayment of the principal of and accrued and unpaid interest, if
any, on Notes that shall have become due solely by such
acceleration, shall have been cured or waived pursuant to
Section 6.09,
then and in every such case (except as provided in the immediately
succeeding sentence) the Holders of a majority in aggregate
principal amount of the Notes then outstanding, by written notice
to the Company and to the Trustee, may waive all Defaults or Events
of Default with respect to the Notes and rescind and annul such
declaration and its consequences and such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; but no such
waiver or rescission and annulment shall extend to or shall affect
any subsequent Default or Event of Default, or shall impair any
right consequent thereon. Notwithstanding anything to the contrary
herein, no such waiver or rescission and annulment shall extend to
or shall affect any Default or Event of Default resulting from
(i) the nonpayment of the principal (including the Redemption
Price and the Fundamental Change Repurchase Price, if applicable)
of, or accrued and unpaid interest on, any Notes, (ii) a
failure to repurchase any Notes when required or (iii) a
failure to pay or deliver, as the case may be, the consideration
due upon conversion of the Notes.
Section
6.03
Additional
Interest. Notwithstanding
anything in this Indenture or in the Notes to the contrary, to the
extent the Company elects, the sole remedy for an Event of Default
relating to the Company’s failure to (i) comply with its
obligations as set forth in Section 4.06(b) or (ii)
deliver to the Trustee pursuant to Section 314(a)(1) of the Trust
Indenture Act any documents or reports that it is required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act
shall after the occurrence of such an Event of Default consist
exclusively of the right to receive Additional Interest on the
Notes at a rate equal to 0.25% per annum of the principal amount of
the Notes outstanding for each day during the 60-day period on
which such Event of Default is continuing beginning on, and
including, the date on which such an Event of Default first occurs.
Additional Interest payable pursuant to this Section 6.03 shall be in
addition to, not in lieu of, any Additional Interest payable
pursuant to Section 4.06(d) hereof or
pursuant to the Registration Rights Agreement. If the Company so
elects, such Additional Interest shall be payable in the same
manner and on the same dates as the stated interest payable on the
Notes. On the 61st day after such Event of Default (if the Event of
Default relating to the Company’s failure to comply with (i)
its obligations as set forth in Section 4.06(b) or (ii) the
requirements of Section 314(a(1) of the Trust Indenture Act is not
cured or waived prior to such 61st day), the Notes shall be
immediately subject to acceleration as provided in Section 6.02. The
provisions of this paragraph will not affect the rights of Holders
of Notes in the event of the occurrence of any Event of Default
other than the Company’s failure to comply with (i) its
obligations as set forth in Section 4.06(b) or (ii)
the requirements of Section 314(a(1) of the Trust Indenture Act. In
the event the Company does not elect to pay Additional Interest
following an Event of Default in accordance with this Section 6.03 or the
Company elected to make such payment but does not pay the
Additional Interest when due, the Notes shall be immediately
subject to acceleration as provided in Section 6.02.
34
In
order to elect to pay Additional Interest as the sole remedy during
the first 60 days after the occurrence of any Event of Default
described in the immediately preceding paragraph, the Company must
notify in writing all Holders of the Notes, the Trustee and the
Paying Agent in writing of such election prior to the beginning of
such 60-day period. Upon the failure to timely give such written
notice, the Notes shall be immediately subject to acceleration as
provided in Section 6.02.
Section
6.04
Payments
of Notes on Default; Suit Therefor. If an Event of Default described in
clause (a) or (b) of Section 6.01 shall have
occurred, the Company shall, upon demand of the Trustee, pay to the
Trustee, for the benefit of the Holders of the Notes, the whole
amount then due and payable on the Notes for principal and
interest, if any, with interest on any overdue principal and
interest, if any, at the rate borne by the Notes at such time, and,
in addition thereto, such further amount as shall be sufficient to
cover any amounts due to the Trustee under Section 7.06. If the
Company shall fail to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust,
may institute a judicial proceeding for the collection of the sums
so due and unpaid, may prosecute such proceeding to judgment or
final decree and may enforce the same against the Company or any
other obligor upon the Notes and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon the Notes,
wherever situated.
In the
event there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes
under Title 11 of the United States Code, or any other
applicable law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar
official shall have been appointed for or taken possession of the
Company or such other obligor, the property of the Company or such
other obligor, or in the event of any other judicial proceedings
relative to the Company or such other obligor upon the Notes, or to
the creditors or property of the Company or such other obligor, the
Trustee, irrespective of whether the principal of the Notes shall
then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made
any demand pursuant to the provisions of this Section 6.04, shall be
entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount
of principal and accrued and unpaid interest, if any, in respect of
the Notes, and, in case of any judicial proceedings, to file such
proofs of claim and other papers or documents and to take such
other actions as it may deem necessary or advisable in order to
have the claims of the Trustee (including any claim for the
compensation, reasonable expenses, disbursements and advances of
the Trustee, its agents and counsel) and of the Holders allowed in
such judicial proceedings relative to the Company or any other
obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any monies or other property
payable or deliverable on any such claims, and to distribute the
same after the deduction of any amounts due to the Trustee under
Section 7.06;
and any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is hereby
authorized by each of the Holders to make such payments to the
Trustee, as administrative expenses, and, in the event that the
Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due to it for
compensation, reasonable expenses, advances and disbursements,
including agents and counsel fees, and including any other amounts
due to the Trustee under Section 7.06, incurred by
it up to the date of such distribution. To the extent that such
payment of compensation, reasonable expenses, advances and
disbursements out of the estate in any such proceedings shall be
denied for any reason, payment of the same shall be secured by a
lien on, and shall be paid out of, any and all distributions,
dividends, monies, securities and other property that the Holders
of the Notes may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or
arrangement or otherwise.
35
Nothing
herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition
affecting such Holder or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder
in any such proceeding.
All
rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the
possession of any of the Notes, or the production thereof at any
trial or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders
of the Notes.
In any
proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party) the Trustee shall be held to
represent all the Holders of the Notes, and it shall not be
necessary to make any Holders of the Notes parties to any such
proceedings.
In case
the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or
abandoned because of any waiver pursuant to Section 6.09 or any
rescission and annulment pursuant to Section 6.02 or for any
other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company, the Holders and
the Trustee shall, subject to any determination in such proceeding,
be restored respectively to their several positions and rights
hereunder, and all rights, remedies and powers of the Company, the
Holders and the Trustee shall continue as though no such proceeding
had been instituted.
Section
6.05
Application of Monies
Collected by Trustee. Any monies or property collected by
the Trustee pursuant to this Article 6 with respect to
the Notes shall be applied in the following order, at the date or
dates fixed by the Trustee for the distribution of such monies,
upon presentation of the several Notes:
First,
to the payment of all amounts due the Trustee (in each of its
capacities) under Section 7.06;
Second,
in case the principal of the outstanding Notes shall not have
become due and be unpaid, to the payment of interest on, and any
cash due upon conversion of, the Notes in default in the order of
the date due of the payments of such interest and cash due upon
conversion, as the case may be, with interest (to the extent that
such interest has been collected by the Trustee) upon such overdue
payments at the rate borne by the Notes at such time, such payments
to be made ratably to the Persons entitled thereto;
36
Third,
in case the principal of the outstanding Notes shall have become
due, by declaration or otherwise, and be unpaid to the payment of
the whole amount (including, if applicable, the payment of the
Redemption Price, the Fundamental Change Repurchase Price and any
cash due upon conversion) then owing and unpaid upon the Notes for
principal and interest, if any, with interest on the overdue
principal and, to the extent that such interest has been collected
by the Trustee, upon overdue installments of interest at the rate
borne by the Notes at such time, and in case such monies shall be
insufficient to pay in full the whole amounts so due and unpaid
upon the Notes, then to the payment of such principal (including,
if applicable, the Redemption Price and the Fundamental Change
Repurchase Price and the cash due upon conversion) and interest
without preference or priority of principal over interest, or of
interest over principal or of any installment of interest over any
other installment of interest, or of any Note over any other Note,
ratably to the aggregate of such principal (including, if
applicable, the Redemption Price, the Fundamental Change Repurchase
Price and any cash due upon conversion) and accrued and unpaid
interest; and
Fourth,
to the payment of the remainder, if any, to the
Company.
Section
6.06
Proceedings by
Holders. Except to enforce the right to
receive payment of principal (including, if applicable, the
Redemption Price and the Fundamental Change Repurchase Price) or
interest when due, or the right to receive payment or delivery of
the consideration due upon conversion, no Holder of any Note shall
have any right by virtue of or by availing of any provision of this
Indenture to institute any suit, action or proceeding in equity or
at law upon or under or with respect to this Indenture, or for the
appointment of a receiver, trustee, liquidator, custodian or other
similar official, or for any other remedy hereunder,
unless:
(a) such
Holder previously shall have given to the Trustee written notice of
an Event of Default and of the continuance thereof, as herein
provided;
(b) Holders
of at least 25% in aggregate principal amount of the Notes then
outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as
Trustee hereunder;
(c) such
Holders shall have offered to the Trustee such security or
indemnity reasonably satisfactory to it against any loss, liability
or expense;
(d) the
Trustee shall have not complied with such notice within 60 days
after the receipt of the notice and the offer of such security or
indemnity; and
(e) no
direction that, in the opinion of the Trustee, is inconsistent with
such written request shall have been given to the Trustee by the
Holders of a majority of the aggregate principal amount of the
Notes then outstanding within such 60-day period pursuant to
Section 6.09,
it being understood and intended, and being expressly covenanted by
the taker and Holder of every Note with every other taker and
Holder and the Trustee that no one or more Holders shall have any
right in any manner whatever by virtue of or by availing of any
provision of this Indenture to affect, disturb or prejudice the
rights of any other Holder, or to obtain or seek to obtain priority
over or preference to any other such Holder, or to enforce any
right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all Holders
(except as otherwise provided herein). For the protection and
enforcement of this Section 6.06,
each and every Holder and the Trustee shall be entitled to such
relief as can be given either at law or in
equity.
37
Notwithstanding any
other provision of this Indenture and any provision of any Note,
each Holder shall have the right to receive payment or delivery, as
the case may be, of (x) the principal (including the
Redemption Price and the Fundamental Change Repurchase Price, if
applicable) of, (y) accrued and unpaid interest, if any, on,
and (z) the consideration due upon conversion of, such Note,
on or after the respective due dates expressed or provided for in
such Note or in this Indenture, or to institute suit for the
enforcement of any such payment or delivery, as the case may be and
such right to receive such payment or delivery, as the case may be,
on or after such respective dates shall not be impaired or affected
without the consent of such Holder.
Section
6.07
Proceedings by
Trustee. In case of an Event of Default, the
Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial
proceedings as are necessary to protect and enforce any of such
rights, either by suit in equity or by action at law or by
proceeding in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this
Indenture, or to enforce any other legal or equitable right vested
in the Trustee by this Indenture or by law.
Section
6.08
Remedies
Cumulative and Continuing. Except as provided in the last
paragraph of Section 2.06, all powers
and remedies given by this Article 6 to the Trustee
or to the Holders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers
and remedies available to the Trustee or the Holders of the Notes,
by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this
Indenture, and no delay or omission of the Trustee or of any Holder
of any of the Notes to exercise any right or power accruing upon
any Default or Event of Default shall impair any such right or
power, or shall be construed to be a waiver of any such Default or
Event of Default or any acquiescence therein; and, subject to the
provisions of Section 6.06, every power
and remedy given by this Article 6 or by law to the
Trustee or to the Holders may be exercised from time to time, and
as often as shall be deemed expedient, by the Trustee or by the
Holders.
38
Section
6.09
Direction
of Proceedings and Waiver of Defaults by Majority of
Holders. The Holders of a majority of the
aggregate principal amount of the Notes at the time outstanding
determined in accordance with Section 8.04 shall have
the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the
Notes; provided,
however, that (a) such
direction shall not be in conflict with any rule of law or with
this Indenture, and (b) the Trustee may take any other action
deemed proper by the Trustee that is not inconsistent with such
direction. The Trustee may refuse to follow any direction that it
determines is unduly prejudicial to the rights of any other Holder
(it being understood that the Trustee does not have an affirmative
duty to ascertain whether or not such directions are unduly
prejudicial to such Holder) or that would involve the Trustee in
personal liability, unless the Trustee is offered indemnity or
security satisfactory to it against any loss, liability or expense;
provided, however, that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent
with such direction. The Holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in
accordance with Section 8.04 may on behalf
of the Holders of all of the Notes waive any past Default or Event
of Default hereunder and its consequences except (i) a default
in the payment of accrued and unpaid interest, if any, on, or the
principal (including any Redemption Price and any Fundamental
Change Repurchase Price) of, the Notes when due that has not been
cured pursuant to the provisions of Section 6.01, (ii) a
failure by the Company to pay or deliver, as the case may be, the
consideration due upon conversion of the Notes or (iii) a
default in respect of a covenant or provision hereof which under
Article 10
cannot be modified or amended without the consent of each Holder of
an outstanding Note affected. Upon any such waiver the Company, the
Trustee and the Holders of the Notes shall be restored to their
former positions and rights hereunder; but no such waiver shall
extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon. Whenever any Default or Event
of Default hereunder shall have been waived as permitted by this
Section 6.09,
said Default or Event of Default shall for all purposes of the
Notes and this Indenture be deemed to have been cured and to be not
continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent
thereon.
Section
6.10
Notice of
Defaults. The Trustee shall, within 90 days
after a Responsible Officer obtains actual knowledge of the
occurrence and continuance of a Default or Event of Default,
deliver to all Holders at the name and address set forth in the
Note Register (at the Company’s expense) notice of all
Defaults known to the Trustee, unless such Defaults or Events of
Default shall have been cured or waived before the giving of such
notice; provided that,
except in the case of a Default in the payment of the principal of
(including the Redemption Price and the Fundamental Change
Repurchase Price, if applicable), or accrued and unpaid interest
on, any of the Notes or a Default in the payment or delivery of the
consideration due upon conversion, the Trustee shall be protected
in withholding such notice if and so long as a Responsible Officer
of the Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders.
Section
6.11
Undertaking to Pay
Costs. All parties to this Indenture agree,
and each Holder of any Note by its acceptance thereof shall be
deemed to have agreed, that any court may, in its discretion,
require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such
suit and that such court may in its discretion assess reasonable
costs, including reasonable attorneys’ fees and expenses,
against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party
litigant; provided that the
provisions of this Section 6.11 (to the
extent permitted by law) shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount
of the Notes at the time outstanding determined in accordance with
Section 8.04,
or to any suit instituted by any Holder for the enforcement of the
payment of the principal of or accrued and unpaid interest, if any,
on any Note (including, but not limited to, the Redemption Price
and the Fundamental Change Repurchase Price, if applicable) on or
after the due date expressed or provided for in such Note or to any
suit for the enforcement of the right to convert any Note, or
receive the consideration due upon conversion, in accordance with
the provisions of Article 14.
39
ARTICLE 7
CONCERNING THE
TRUSTEE
Section
7.01
Duties and
Responsibilities of Trustee. The Trustee, prior to the occurrence
of an Event of Default of which a Responsible Officer of the
Trustee has actual knowledge and after the curing or waiver of all
Events of Default that may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in
this Indenture. In the event an Event of Default has occurred and
is continuing and a Responsible Officer of the Trustee has written
notice or actual knowledge of such Event of Default, the Trustee
shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person’s own affairs;
provided that if an Event
of Default occurs and is continuing and a Responsible Officer has
written notice or actual knowledge of such Event of Default, the
Trustee will be under no obligation to exercise any of the rights
or powers under this Indenture at the request or direction of any
of the Holders unless such Holders have offered (and, if requested,
provided) to the Trustee indemnity or security satisfactory to it
in its sole discretion against any loss, liability or expense that
might be incurred by it in compliance with such request or
direction.
No
provision of this Indenture shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its
own grossly negligent failure to act or its own willful misconduct,
except that:
(a) prior
to the occurrence of an Event of Default of which a Responsible
Officer of the Trustee has actual knowledge and after the curing or
waiving of all Events of Default that may have
occurred:
(i) the
duties of the Trustee shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable
except for the performance of such duties as are specifically set
forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee;
and
(ii) in
the absence of gross negligence and willful misconduct on the part
of the Trustee, the Trustee may conclusively and without liability
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but, in the case of any such certificates or opinions
that by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate
the accuracy of any mathematical calculations or other facts stated
therein);
(b) the
Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Officers of the Trustee, unless
it shall be proved that the Trustee was grossly negligent in
ascertaining the pertinent facts;
(c) the
Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a majority of the
aggregate principal amount of the Notes at the time outstanding
determined as provided in Section 8.04
relating to the time, method and place
of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture;
(d) whether
or not therein provided, every provision of this Indenture relating
to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of
this Section;
(e) the
Trustee shall not be liable in respect of any payment (as to the
correctness of amount, entitlement to receive or any other matters
relating to payment) or notice effected by the Company or any
Paying Agent or any records maintained by any co-Note Registrar
with respect to the Notes;
40
(f) if
any party fails to deliver a notice relating to an event the fact
of which, pursuant to this Indenture, requires notice to be sent to
the Trustee, the Trustee may conclusively and without liability
rely on its failure to receive such notice as reason to act as if
no such event occurred, unless a Responsible Officer of the Trustee
had actual knowledge of such event;
(g) all
cash received by the Trustee shall be placed in a non-interest
bearing trust account and shall not be invested unless agreed in
writing by the Company and the Trustee;
(h) in
the event that the Trustee is also acting as Custodian, Note
Registrar, Paying Agent, Conversion Agent, Bid Solicitation Agent
or transfer agent hereunder, the rights and protections afforded to
the Trustee pursuant to this Article 7
shall also be afforded to such
Custodian, Note Registrar, Paying Agent, Conversion Agent, Bid
Solicitation Agent or transfer agent; and
(i) under
no circumstances shall the Trustee be liable in its individual
capacity for the obligations evidenced by the
Notes.
None of
the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers. The Trustee shall not
be required to give any bond or surety in respect of the
performance of its powers or duties hereunder. The Trustee will be
under no obligation to exercise any of its rights and powers under
this Indenture at the request or direction of the Holders unless
such Holder has offered (and if requested, provided) to the Trustee
security or indemnity satisfactory to it in its sole discretion
against any loss, liability or expense.
Section
7.02
Reliance
on Documents, Opinions, Etc. Except as
otherwise provided in Section 7.01:
(a) before
the Trustee acts or refrains from acting, it may require an
Officers’ Certificate and/or an Opinion of Counsel. The
Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on an Officers’ Certificate or
Opinion of Counsel.
(b) the
Trustee may conclusively and without liability rely and shall be
fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, note, coupon or other paper
or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(c) any
request, direction, order or demand of the Company mentioned herein
shall be sufficiently evidenced by an Officers’ Certificate
(unless other evidence in respect thereof be herein specifically
prescribed); and any Board Resolution may be evidenced to the
Trustee by a copy thereof certified by the Secretary or an
Assistant Secretary of the Company;
(d) the
Trustee may consult with counsel of its own selection and require
an Opinion of Counsel and any written or verbal advice of such
counsel or Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or
omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
41
(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 or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney at the expense of the
Company and shall incur no liability of any kind by reason of such
inquiry or investigation;
(f) the
Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through a
co-trustee, agents, custodians, nominees or attorneys and the
Trustee shall not be responsible for any misconduct or negligence
on the part of any agent, custodian, nominee or attorney appointed
by it with due care hereunder;
(g) the
permissive rights of the Trustee enumerated herein shall not be
construed as duties;
(h) 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;
(i) the
Trustee shall not be responsible for monitoring the performance of
other persons or for the failure of others to perform their
duties;
(j) the
Holders will not direct the Trustee to take action contrary to this
Indenture, the Notes or applicable law, and the Trustee is not
obligated to follow any instruction of the Holders that is contrary
to this Indenture, the Notes or applicable law;
(k) the
Trustee may request that the Company deliver an Officers’
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant
to this Indenture, which Officers’ Certificate may be signed
by any Person authorized to sign an Officers’ Certificate,
including any Person specified as so authorized in any such
certificate previously delivered and not
superseded;
(l) the
Trustee shall not be required to give any bond or surety in respect
of the execution of the trusts and powers under this
Indenture;
(m) in
no event shall the Trustee be liable for any special, punitive,
indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Trustee
has been advised of the likelihood of such loss or damage and
regardless of the form of action; and
42
(n) the
Trustee shall not be charged with knowledge of any Default or Event
of Default with respect to the Notes, unless either (1) a
Responsible Officer shall have actual knowledge of such Default or
Event of Default or (2) written notice of such Default or
Event of Default shall have been given to the Trustee by the
Company or actually received by a Responsible Officer at the
Corporate Trust Office of the Trustee from the Company, a Paying
Agent, any Holder or any agent of any Holder, referencing this
Indenture and stating that it is a “notice of
default”.
Section
7.03
No
Responsibility for Recitals, Etc. The recitals,
statements, warranties and representations 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.
Notwithstanding the generality of the foregoing, each Holder shall
be solely responsible for making its own independent appraisal of,
and investigation into, the financial condition, creditworthiness,
condition, affairs, status and nature of the Company, and the
Trustee shall not at any time have any responsibility for the same
and each Holder shall not rely on the Trustee in respect
thereof.
Section
7.04
Trustee,
Paying Agents, Conversion Agents, Bid Solicitation Agent or Note
Registrar May Own Notes. The Trustee, any Paying Agent (if
other than the Company or an Affiliate thereof), any Conversion
Agent, Bid Solicitation Agent (if other than the Company or an
Affiliate thereof) or Note Registrar, in its individual or any
other capacity, may become the owner or pledgee of Notes with the
same rights it would have if it were not the Trustee, Paying Agent,
Conversion Agent, Bid Solicitation Agent or Note
Registrar.
Section
7.05
Monies to
Be Held in Trust. All monies 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. The Trustee shall not be obligated to take possession
of any Common Stock, whether upon conversion or in connection with
any discharge of this Indenture pursuant to Article 3 hereof, but
shall satisfy its obligation as Conversion Agent by working through
the stock transfer agent of the Company from time to time as
directed by the Company.
43
Section
7.06
Compensation and
Expenses of Trustee. The Company covenants and agrees to
pay to the Trustee, in any of its capacities under this Indenture,
from time to time, and the Trustee shall be entitled to,
compensation as agreed in writing between the Company and the
Trustee for all services rendered by it hereunder in any capacity
(which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) as mutually
agreed to in writing between the Trustee and the Company, and the
Company will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances reasonably incurred
or made by the Trustee in accordance with any of the provisions of
this Indenture in any capacity thereunder (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel and of all Persons not regularly in its employ and
including reasonable attorneys’ fees in connection with
enforcement of its rights to indemnity herein) except any such
expense, disbursement or advance as shall have been caused by its
gross negligence or willful misconduct, as determined by a final,
non-appealable order of a court of competent jurisdiction. The
Company also covenants to indemnify the Trustee in any capacity
under this Indenture and any other document or transaction entered
into in connection herewith and its agents and any authenticating
agent for, and to hold them harmless against, any loss, claim,
damage, liability, fee, cost, loss, tax, claim, action or expense
incurred without gross negligence or willful misconduct on the part
of the Trustee, its officers, directors, agents or employees, or
such agent or authenticating agent, as the case may be, and arising
out of or in connection with the acceptance or administration of
this Indenture or in any other capacity hereunder, including
third-party claims and claims involving the Company, and including
the costs and expenses of defending themselves against any claim of
liability in the premises. The obligations of the Company under
this Section 7.06 to compensate
or indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall be secured by a senior
lien to which the Notes are hereby made subordinate on all money or
property held or collected by the Trustee, except, subject to the
effect of Section 6.05, funds held
in trust herewith for the benefit of the Holders of particular
Notes. The Trustee’s right to receive payment of any amounts
due under this Section 7.06 shall not be
subordinate to any other liability or indebtedness of the Company.
The indemnity under this Section 7.06 is payable upon demand by the
Trustee. The obligation of the Company under this Section 7.06 shall survive
the satisfaction and discharge of this Indenture, the payment of
the Notes and the earlier resignation or removal of the Trustee.
The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld. The
indemnification provided in this Section 7.06 shall extend
to the officers, directors, agents and employees of the
Trustee.
Without
prejudice to any other rights available to the Trustee under
applicable law, when the Trustee and its agents and any
authenticating agent incur expenses or render services after an
Event of Default specified in Section 6.01(i) or
Section 6.01(j) occurs,
the expenses and the compensation for the services are intended to
constitute expenses of administration under any bankruptcy,
insolvency or similar laws.
Section
7.07
Officers’
Certificate as Evidence. Except as otherwise provided in
Section 7.01,
whenever in the administration of the provisions of this Indenture
the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action
hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of gross
negligence or willful misconduct on the part of the Trustee, as
determined by a final, non-appealable order of a court of competent
jurisdiction, be deemed to be conclusively proved and established
by an Officers’ Certificate delivered to the Trustee, and
such Officers’ Certificate, in the absence of gross
negligence or willful misconduct on the part of the Trustee, as
determined by a final, non-appealable order of a court of competent
jurisdiction, shall be full warrant to the Trustee for any action
taken or omitted by it under the provisions of this Indenture upon
the faith thereof.
Section
7.08
Eligibility of
Trustee. There shall at all times be a Trustee
hereunder which shall be a Person that is eligible pursuant to the
Trust Indenture Act (as if the Trust Indenture Act were applicable
hereto) to act as such and has a combined capital and surplus of at
least $50,000,000. If such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of any
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the
manner and with the effect hereinafter specified in this
Article.
44
Section
7.09
Resignation or Removal
of Trustee. (a) The Trustee may at any time
resign by giving written notice of such resignation to the Company
and by delivering notice thereof to the Holders. Upon receiving
such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument, in duplicate, executed by
order of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 60 days after the giving of such
notice of resignation to the Holders, the resigning Trustee may at
the expense of the Company, upon ten Business Days’ notice to
the Company and the Holders, petition any court of competent
jurisdiction for the appointment of a successor trustee, or any
Holder who has been a bona fide holder of a Note or Notes for at
least six months (or since the date of this Indenture) may, subject
to the provisions of Section 6.11, on behalf of
himself or herself 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, and the Company shall bear
the expense associated with such appointment.
(b) In
case at any time any of the following shall
occur:
(i) the
Trustee shall cease to be eligible in accordance with the
provisions of Section 7.08
and shall fail to resign after written
request therefor by the Company or by any such Holder,
or
(ii) the
Trustee shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then,
in either case, the Company may by a Board Resolution remove the
Trustee and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of
which instrument shall be delivered to the Trustee so removed and
one copy to the successor trustee, or, subject to the provisions
of Section 6.11,
any Holder who has been a bona fide holder of a Note or Notes for
at least six months (or since the date of this Indenture) may, on
behalf of himself or herself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor
trustee.
(c) The
Holders of a majority in aggregate principal amount of the Notes at
the time outstanding, as determined in accordance with
Section 8.04,
may at any time remove the Trustee and nominate a successor trustee
that shall be deemed appointed as successor trustee unless within
ten days after notice to the Company of such nomination the Company
objects thereto, in which case the Trustee so removed or any
Holder, upon the terms and conditions and otherwise as in
Section 7.09(a)
provided, may petition 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 7.09
shall become effective upon acceptance
of appointment by the successor trustee as provided in
Section 7.10.
45
Section
7.10
Acceptance
by Successor Trustee. Any successor trustee appointed as
provided in Section 7.09 shall
execute, acknowledge and deliver to the Company and to its
predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as
Trustee herein; but, nevertheless, on the written request of the
Company or of the successor trustee, the trustee ceasing to act
shall, upon payment of any amounts then due it pursuant to the
provisions of Section 7.06, execute and
deliver an instrument transferring to such successor trustee all
the rights and powers of the trustee so ceasing to act. Upon
request of any such successor trustee, the Company shall execute
any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights
and powers. Any trustee ceasing to act shall, nevertheless, retain
a senior lien to which the Notes are hereby made subordinate on all
money or property held or collected by such trustee as such, except
for funds held in trust for the benefit of Holders of particular
Notes, to secure any amounts then due to it pursuant to the
provisions of Section 7.06.
No
successor trustee shall accept appointment as provided in this
Section 7.10
unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 7.08.
Upon
acceptance of appointment by a successor trustee as provided in
this Section 7.10, each of the
Company and the successor trustee, at the written direction and at
the expense of the Company shall deliver or cause to be delivered
notice of the succession of such trustee hereunder to the Holders
at their addresses as they shall appear on the Note Register. If
the Company fails to deliver such notice within ten days after
acceptance of appointment by the successor trustee, the successor
trustee may cause such notice to be delivered at the expense of the
Company.
Section
7.11
Succession
by Merger, Etc. Any corporation
or other entity into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation or other
entity resulting from any merger, conversion or consolidation to
which the Trustee shall be a party, or any corporation or other
entity succeeding to all or substantially all of the corporate
trust business of the Trustee (including the administration of this
Indenture), shall be the successor to the Trustee hereunder without
the execution or filing of any paper or any further act on the part
of any of the parties hereto; provided that in the case of any
corporation or other entity succeeding to all or substantially all
of the corporate trust business of the Trustee such corporation or
other entity shall be eligible under the provisions of Section 7.08.
In case
at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been
authenticated but not delivered, any such successor to the Trustee
may adopt the certificate of authentication of any predecessor
trustee or authenticating agent appointed by such predecessor
trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any
successor to the Trustee or an authenticating agent appointed by
such successor trustee may authenticate such Notes either in the
name of any predecessor trustee hereunder or in the name of the
successor trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Notes or in this
Indenture provided that the certificate of the Trustee shall have;
provided, however, that the right to adopt the
certificate of authentication of any predecessor trustee or to
authenticate Notes in the name of any predecessor trustee shall
apply only to its successor or successors by merger, conversion or
consolidation.
46
Section
7.12
Trustee’s
Application for Instructions from the
Company. Any application by the Trustee for
written instructions from the Company (other than with regard to
any action proposed to be taken or omitted to be taken by the
Trustee that affects the rights of the Holders of the Notes under
this Indenture) may, at the option of the Trustee, set forth in
writing any action proposed to be taken or omitted by the Trustee
under this Indenture and the date on and/or after which such action
shall be taken or such omission shall be effective. The Trustee
shall not be liable for any action taken by, or omission of, the
Trustee in accordance with a proposal included in such application
on or after the date specified in such application (which date
shall not be less than three Business Days after the notice has
been deemed to have been given pursuant to Section 17.03, unless any such
officer shall have consented in writing to any earlier date),
unless, prior to taking any such action (or the effective date in
the case of any omission), the Trustee shall have received written
instructions in accordance with this Indenture in response to such
application specifying the action to be taken or
omitted.
ARTICLE 8
CONCERNING THE
HOLDERS
Section
8.01
Action by
Holders. Whenever in this Indenture it is
provided that the Holders of a specified percentage of the
aggregate principal amount of the Notes may take any action
(including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action), the
fact that at the time of taking any such action, the Holders of
such specified percentage have joined therein may be evidenced
(a) by any instrument or any number of instruments of similar
tenor executed by Holders in person or by agent or proxy appointed
in writing, or (b) by the record of the Holders voting in
favor thereof at any meeting of Holders duly called and held in
accordance with the provisions of Article 9, or (c) by
a combination of such instrument or instruments and any such record
of such a meeting of Holders. Whenever the Company or the Trustee
solicits the taking of any action by the Holders of the Notes, the
Company or the Trustee may, but shall not be required to, fix in
advance of such solicitation, a date as the record date for
determining Holders entitled to take such action. The record date
if one is selected shall be not more than fifteen days prior to the
date of commencement of solicitation of such action.
Section
8.02
Proof of
Execution by Holders. Subject to the provisions of
Section 7.01,
Section 7.02
and Section 9.05, proof of the
execution of any instrument by a Holder or its agent or proxy shall
be sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner
as shall be satisfactory to the Trustee. The holding of Notes shall
be proved by the Note Register or by a certificate of the Note
Registrar. The record of any Holders’ meeting shall be proved
in the manner provided in Section 9.06.
Section
8.03
Who Are
Deemed Absolute Owners. The Company, the Trustee, any
authenticating agent, any Paying Agent, any Conversion Agent and
any Note Registrar may deem the Person in whose name a Note shall
be registered upon the Note Register to be, and may treat it as,
the absolute owner of such Note (whether or not such Note shall be
overdue and notwithstanding any notation of ownership or other
writing thereon made by any Person other than the Company or any
Note Registrar) for the purpose of receiving payment of or on
account of the principal (including any Redemption Price and any
Fundamental Change Repurchase Price) of and (subject to
Section 2.03)
accrued and unpaid interest on such Note, for conversion of such
Note and for all other purposes; and neither the Company nor the
Trustee nor any Paying Agent nor any Conversion Agent nor any Note
Registrar shall be affected by any notice to the contrary. The sole
registered Holder of a Global Note shall be the Depositary or its
nominee. All such payments or deliveries so made to any Holder for
the time being, or upon its order, shall be valid, and, to the
extent of the sums or shares of Common Stock so paid or delivered,
effectual to satisfy and discharge the liability for monies payable
or shares deliverable upon any such Note. Notwithstanding anything
to the contrary in this Indenture or the Notes following an Event
of Default, any holder of a beneficial interest in a Global Note
may directly enforce against the Company, without the consent,
solicitation, proxy, authorization or any other action of the
Depositary or any other Person, such holder’s right to
exchange such beneficial interest for a Note in certificated form
in accordance with the provisions of this Indenture.
47
Section
8.04
Company-Owned Notes
Disregarded. In determining whether the Holders of
the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this
Indenture, Notes that are owned by the Company, by any Subsidiary
thereof or by any Affiliate of the Company or any Subsidiary
thereof shall be disregarded and deemed not to be outstanding for
the purpose of any such determination; provided that for the purposes of
determining whether the Trustee shall be protected in relying on
any such direction, consent, waiver or other action only Notes that
a Responsible Officer knows are so owned shall be so disregarded.
Notes so owned that have been pledged in good faith may be regarded
as outstanding for the purposes of this Section 8.04 if the
pledgee shall establish to the satisfaction of the Trustee the
pledgee’s right to so act with respect to such Notes and that
the pledgee is not the Company, a Subsidiary thereof or an
Affiliate of the Company or a Subsidiary thereof. In the case of a
dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee. Upon
request of the Trustee, the Company shall furnish to the Trustee
promptly an Officers’ Certificate listing and identifying all
Notes, if any, known by the Company to be owned or held by or for
the account of any of the above described Persons; and, subject to
Section 7.01,
the Trustee shall be entitled to accept such Officers’
Certificate as conclusive evidence of the facts therein set forth
and of the fact that all Notes not listed therein are outstanding
for the purpose of any such determination.
Section
8.05
Revocation
of Consents; Future Holders Bound. At any time prior to (but not after)
the evidencing to the Trustee, as provided in Section 8.01, of the
taking of any action by the Holders of the percentage of the
aggregate principal amount of the Notes specified in this Indenture
in connection with such action, any Holder of a Note that is shown
by the evidence to be included in the Notes the Holders of which
have consented to such action may, by filing written notice with
the Trustee at its Corporate Trust Office and upon proof of holding
as provided in Section 8.02, revoke such
action so far as concerns such Note. Except as aforesaid, any
action taken by the Holder of any Note shall be conclusive and
binding upon such Holder and upon all future Holders and owners of
such Note and of any Notes issued in exchange or substitution
therefor or upon registration of transfer thereof, irrespective of
whether any notation in regard thereto is made upon such Note or
any Note issued in exchange or substitution therefor or upon
registration of transfer thereof.
ARTICLE 9
HOLDERS’
MEETINGS
Section
9.01 Purpose of
Meetings. A meeting of Holders may be called at
any time and from time to time pursuant to the provisions of this
Article 9 for
any of the following purposes:
(a) to
give any notice to the Company or to the Trustee or to give any
directions to the Trustee permitted under this Indenture, or to
consent to the waiving of any Default or Event of Default hereunder
(in each case, as permitted under this Indenture) and its
consequences, or to take any other action authorized to be taken by
Holders pursuant to any of the provisions of Article 6;
48
(b) to
remove the Trustee and nominate a successor trustee pursuant to the
provisions of Article 7;
(c) to
consent to the execution of an indenture or indentures supplemental
hereto pursuant to the provisions of Section 10.02;
or
(d) to
take any other action authorized to be taken by or on behalf of the
Holders of any specified aggregate principal amount of the Notes
under any other provision of this Indenture or under applicable
law.
Section
9.02
Call of
Meetings by Trustee. The Trustee may at any time call a
meeting of Holders to take any action specified in Section 9.01, to be held
at such time and at such place as the Trustee shall determine.
Notice of every meeting of the Holders, setting forth the time and
the place of such meeting and in general terms the action proposed
to be taken at such meeting and the establishment of any record
date pursuant to Section 8.01, shall be
delivered to Holders of such Notes at their addresses as they shall
appear on the Note Register. Such notice shall also be delivered to
the Company. Such notices shall be delivered not less than 20 nor
more than 90 days prior to the date fixed for the
meeting.
Any
meeting of Holders shall be valid without notice if the Holders of
all Notes then outstanding are present in person or by proxy or if
notice is waived before or after the meeting by the Holders of all
Notes then outstanding, and if the Company and the Trustee are
either present by duly authorized representatives or have, before
or after the meeting, waived notice.
Section
9.03
Call of
Meetings by Company or Holders. In case at any time the Company,
pursuant to a Board Resolution, or the Holders of at least 10% of
the aggregate principal amount of the Notes then outstanding, shall
have requested the Trustee to call a meeting of Holders, by written
request setting forth in reasonable detail the action proposed to
be taken at the meeting, and the Trustee shall not have delivered
the notice of such meeting within 20 days after receipt of such
request, then the Company or such Holders may determine the time
and the place for such meeting and may call such meeting to take
any action authorized in Section 9.01, by
delivering notice thereof as provided in Section 9.02.
Section
9.04
Qualifications for
Voting. To be entitled to vote at any meeting
of Holders a Person shall (a) be a Holder of one or more Notes
on the record date pertaining to such meeting or (b) be a
Person appointed by an instrument in writing as proxy by a Holder
of one or more Notes on the record date pertaining to such meeting.
The only Persons who shall be entitled to be present or to speak at
any meeting of Holders shall be the Persons entitled to vote at
such meeting and their counsel and any representatives of the
Trustee and its counsel and any representatives of the Company and
its counsel.
Section
9.05
Regulations.
Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for
any meeting of Holders, in regard to proof of the holding of Notes
and of the appointment of proxies, and in regard to the appointment
and duties of inspectors of votes, the submission and examination
of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it
shall think fit.
49
The
Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called
by the Company or by Holders as provided in Section 9.03, in which
case the Company or the Holders calling the meeting, as the case
may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall
be elected by vote of the Holders of a majority in aggregate
principal amount of the Notes represented at the meeting and
entitled to vote at the meeting.
Subject
to the provisions of Section 8.04, at any
meeting of Holders each Holder or proxyholder shall be entitled to
one vote for each $1,000 principal amount of Notes held or
represented by him or her; provided, however, that no vote shall be cast or
counted at any meeting in respect of any Note challenged as not
outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to
vote other than by virtue of Notes held by it or instruments in
writing as aforesaid duly designating it as the proxy to vote on
behalf of other Holders. Any meeting of Holders duly called
pursuant to the provisions of Section 9.02 or
Section 9.03
may be adjourned from time to time by the Holders of a majority of
the aggregate principal amount of Notes represented at the meeting,
whether or not constituting a quorum, and the meeting may be held
as so adjourned without further notice.
Section
9.06
Voting.
The vote upon any resolution submitted to any meeting of Holders
shall be by written ballot on which shall be subscribed the
signatures of the Holders or of their representatives by proxy and
the outstanding aggregate principal amount of the Notes held or
represented by them. The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at
the meeting for or against any resolution and who shall make and
file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in
duplicate of the proceedings of each meeting of Holders shall be
prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or
more Persons having knowledge of the facts setting forth a copy of
the notice of the meeting and showing that said notice was
delivered as provided in Section 9.02. The record
shall show the aggregate principal amount of the Notes voting in
favor of or against any resolution. The record shall be signed and
verified by the affidavits of the permanent chairman and secretary
of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at
the meeting.
Any
record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section
9.07
No Delay
of Rights by Meeting. Nothing contained in this
Article 9
shall be deemed or construed to authorize or permit, by reason of
any call of a meeting of Holders or any rights expressly or
impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Holders under any of the
provisions of this Indenture or of the Notes.
ARTICLE 10
SUPPLEMENTAL
INDENTURES
Section
10.01
Supplemental
Indentures Without Consent of Holders. The Company, when authorized by the
resolutions of the Board of Directors and the Trustee, at the
Company’s expense and direction, may from time to time and at
any time enter into an indenture or indentures supplemental hereto
for one or more of the following purposes:
50
(a) to
cure any ambiguity, omission, defect or
inconsistency;
(b) to
provide for the assumption by a Successor Company of the
obligations of the Company under this Indenture pursuant to
Article 11;
(c) to
add guarantees with respect to the Notes;
(d) to
secure the Notes;
(e) to
add to the covenants or Events of Default of the Company for the
benefit of the Holders or surrender any right or power conferred
upon the Company;
(f) to
make any change that does not adversely affect the rights of any
Holder;
(g) in
connection with any Share Exchange Event, to provide that the notes
are convertible into Reference Property, subject to the provisions
of Section 14.02,
and make such related changes to the terms of the Notes to the
extent expressly required by Section 14.07;
(h) irrevocably
elect a Settlement Method or a specified dollar amount, or
eliminate the Company’s right to elect a Settlement Method;
or
(i) comply
with any requirement of the SEC in connection with the
qualification of this Indenture under the Trust Indenture Act, to
the extent that this Indenture is required to comply with the Trust
Indenture Act.
Upon
the written request of the Company, the Trustee is hereby
authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements
and stipulations that may be therein contained, but the Trustee
shall not be obligated to, but may in its discretion, enter into
any supplemental indenture that affects the Trustee’s own
rights, duties, liabilities or immunities under this Indenture or
otherwise.
Any
supplemental indenture authorized by the provisions of this
Section 10.01
may be executed by the Company and the Trustee without the consent
of the Holders of any of the Notes at the time outstanding,
notwithstanding any of the provisions of Section 10.02.
Section
10.02 Supplemental
Indentures with Consent of Holders
. With the consent (evidenced as
provided in Article 8) of the Holders
of at least a majority of the aggregate principal amount of the
Notes then outstanding (determined in accordance with Article 8 and including,
without limitation, consents obtained in connection with a
repurchase of, or tender or exchange offer for, Notes), the
Company, when authorized by the resolutions of the Board of
Directors, at the Company’s expense, may from time to time
and at any time enter into an indenture or indentures supplemental
hereto with the Trustee for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any
manner the rights of the Holders; provided, however, that, without the consent of
each Holder of an outstanding Note affected, no such supplemental
indenture shall:
(a) reduce
the amount of Notes whose Holders must consent to an
amendment;
51
(b) reduce
the rate of or extend the stated time for payment of interest on
any Note;
(c) reduce
the principal of or extend the Maturity Date of any
Note;
(d) make
any change that adversely affects the conversion rights of any
Notes;
(e) reduce
the Redemption Price or the Fundamental Change Repurchase Price of
any Note or amend or modify in any manner adverse to the Holders
the Company’s obligation to make such payments, whether
through an amendment or waiver of provisions in the covenants,
definitions or otherwise;
(f) make
any Note payable in a currency, or at a place of payment, other
than that stated in the Note;
(g) change
the ranking of the Notes;
(h) impair
the right of any Holder to receive payment of principal and
interest (including any interest Make-Whole Payment, if applicable)
on such Holder’s Notes on or after the due dates therefor or
to institute suit for the enforcement of any payment on or with
respect to such Holder’s Notes; or
(i) make
any change in this Article 10
that requires each Holder’s
consent or in the waiver provisions in Section 6.02
or Section 6.09.
Upon
the written request of the Company, and upon the delivery to the
Trustee of evidence of the requisite consent of Holders as
aforesaid and subject to Section 10.05, the Trustee
shall join with the Company in the execution of such supplemental
indenture unless such supplemental indenture affects the
Trustee’s own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such
supplemental indenture.
Holders
do not need under this Section 10.02 to approve
the particular form of any proposed supplemental indenture. It
shall be sufficient if such Holders approve the substance thereof.
After any such supplemental indenture becomes effective, the
Company shall deliver to the Holders (with a copy to the Trustee) a
notice briefly describing such supplemental indenture. However, the
failure to give such notice to all the Holders, or any defect in
the notice, will not impair or affect the validity of the
supplemental indenture.
Section
10.03 Effect of Supplemental
Indentures. Upon the execution of any
supplemental indenture pursuant to the provisions of this
Article 10,
this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitation of
rights, obligations, duties and immunities under this Indenture of
the Trustee, the Company and the Holders shall thereafter be
determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms and
conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for
any and all purposes.
52
Section
10.04 Notation on
Notes
. Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to the
provisions of this Article 10 may, at the
Company’s expense, bear a notation in form acceptable to the
Trustee as to any matter provided for in such supplemental
indenture. If the Company or the Trustee shall so determine, new
Notes so modified as to conform, in the opinion of the Trustee and
the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may, at the
Company’s expense, be prepared and executed by the Company,
authenticated by the Trustee (or an authenticating agent duly
appointed by the Trustee pursuant to Section 17.10) and
delivered in exchange for the Notes then outstanding, upon
surrender of such Notes then outstanding.
Section
10.05 Evidence of Compliance
of Supplemental Indenture to Be Furnished
Trustee. In addition to the documents required
by Section 17.05, the Trustee
shall receive an Officers’ Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture
executed pursuant hereto complies with the requirements of this
Article 10 and
is permitted or authorized by this Indenture.
ARTICLE 11
CONSOLIDATION,
MERGER, SALE, CONVEYANCE AND LEASE
Section
11.01 Company May
Consolidate, Etc. on Certain Terms. Subject to the provisions of
Section 11.02,
the Company shall not consolidate with, merge with or into, or
sell, convey, transfer or lease all or substantially all of its
consolidated properties and assets of the Company and its
Subsidiaries, taken as a whole, to another Person,
unless:
(a) the
resulting, surviving or transferee Person (the
“Successor
Company”), if not the
Company, shall be a corporation organized and existing under the
laws of the United States of America, any State thereof or the
District of Columbia, and the Successor Company (if not the
Company) shall expressly assume, (A) by supplemental indenture all
of the obligations of the Company under the Notes and this
Indenture, and (B) to the extent the Registration Rights Agreement
is then still operative, all of the Company’s obligations
under the Registration Rights Agreement; and
(b) immediately
after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing under this
Indenture.
For
purposes of this Section 11.01, the sale,
conveyance, transfer or lease of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company to
another Person, which properties and assets, if held by the Company
instead of such Subsidiaries, would constitute all or substantially
all of the properties and assets of the Company on a consolidated
basis, shall be deemed to be the sale, conveyance, transfer or
lease of all or substantially all of the properties and assets of
the Company to another Person.
53
Section
11.02
Successor
Corporation to Be Substituted. In case of any such consolidation,
merger, sale, conveyance, transfer or lease and upon the assumption
by the Successor Company, by supplemental indenture, executed and
delivered to the Trustee, of the due and punctual payment of the
principal of and accrued and unpaid interest on all of the Notes,
the due and punctual delivery or payment, as the case may be, of
any consideration due upon conversion of the Notes and the due and
punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such Successor Company
(if not the Company) shall succeed to and, except in the case of a
lease of all or substantially all of the Company’s properties
and assets, shall be substituted for the Company, with the same
effect as if it had been named herein as the party of the first
part. Such Successor Company thereupon may cause to be signed, and
may issue either in its own name or in the name of the Company any
or all of the Notes issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee; and,
upon the order of such Successor Company instead of the Company and
subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall
deliver, or cause to be authenticated and delivered, any Notes that
previously shall have been signed and delivered by the Officers of
the Company to the Trustee for authentication, and any Notes that
such Successor Company thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Notes so issued
shall in all respects have the same legal rank and benefit under
this Indenture as the Notes theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such
Notes had been issued at the date of the execution hereof. In the
event of any such consolidation, merger, sale, conveyance or
transfer (but not in the case of a lease), upon compliance with
this Article 11 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 11) may be
dissolved, wound up and liquidated at any time thereafter and,
except in the case of a lease, such Person shall be released from
its liabilities as obligor and maker of the Notes and from its
obligations under this Indenture and the Notes.
In case
of any such consolidation, merger, sale, conveyance, transfer or
lease, such changes in phraseology and form (but not in substance)
may be made in the Notes thereafter to be issued as may be
appropriate.
Section
11.03
Officers’
Certificate and Opinion of Counsel to Be Given to
Trustee. No such consolidation, merger, sale,
conveyance, transfer or lease shall be effective unless the Trustee
shall receive an Officers’ Certificate and an Opinion of
Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or lease, as the case may be, and any
such assumption and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture,
comply with the provisions of this Article 11, and which
Opinion of Counsel shall state that the Notes and such supplemental
indenture are valid and binding obligations of the Successor
Company.
ARTICLE 12
IMMUNITY OF
INCORPORATORS, STOCKHOLDERS, OFFICERS AND
DIRECTORS
Section
12.01
Indenture
and Notes Solely Corporate Obligations. No recourse for the payment of the
principal of or accrued and unpaid interest on any Note, nor for
any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the
Company in this Indenture or in any supplemental indenture or in
any Note, nor because of the creation of any indebtedness
represented thereby, shall be had against any incorporator,
stockholder, employee, agent, Officer or director or Subsidiary, as
such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any
successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition
of, and as a consideration for, the execution of this Indenture and
the issue of the Notes.
54
ARTICLE 13
[INTENTIONALLY
OMITTED]
ARTICLE 14
CONVERSION OF
NOTES
Section
14.01 Conversion
Privilege. (a) Subject to and upon compliance
with the provisions of this Article 14, each Holder of
a Note shall have the right, at such Holder’s option, to
convert all or any portion (if the portion to be converted is
$1,000 principal amount or an integral multiple thereof) of such
Note (i) subject to satisfaction of the conditions described
in Section 14.01(b), at any
time prior to the close of business on the Business Day immediately
preceding July 1, 2024 under the circumstances and during the
periods set forth in Section 14.01(b), and
(ii) regardless of the conditions described in Section 14.01(b), on or
after July 1, 2024 and prior to the close of business on the
Business Day immediately preceding the Maturity Date, in each case,
at an initial conversion rate of 500 shares of Common Stock
(subject to adjustment as provided in this Article 14, the
“Conversion
Rate”) per $1,000 principal amount of Notes (subject
to, and in accordance with, the settlement provisions of
Section 14.02,
the “Conversion
Obligation”).
(b) (i)
Prior to the close of business on the Business Day immediately
preceding July 1, 2024, a Holder may surrender all or any portion
of its Notes for conversion at any time during the five consecutive
Business Day period immediately following 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 Notes in accordance with this
subsection (b)(i), for each Trading Day of the Measurement
Period was less than 98% of the product of the Last Reported Sale
Price of the Common Stock on each such Trading Day and the
Conversion Rate on each such Trading Day. The Trading Prices shall
be determined by the Bid Solicitation Agent pursuant to this
subsection (b)(i) and the definition of Trading Price set
forth in this Indenture. The Company shall provide written notice
to the Bid Solicitation Agent of the three independent nationally
recognized securities dealers selected by the Company pursuant to
the definition of Trading Price, along with appropriate contact
information for each. The Bid Solicitation Agent shall have no
obligation to determine the Trading Price per $1,000 principal
amount of Notes unless the Company has requested such determination
in writing and the Company shall have no obligation to make such
request unless a Holder provides the Company with reasonable
evidence that the Trading Price per $1,000 principal amount of
Notes on any Trading Day would be less than 98% of the product of
the Last Reported Sale Price of the Common Stock on such Trading
Day and the Conversion Rate on such Trading Day, at which time the
Company shall instruct the Bid Solicitation Agent in writing to
determine the Trading Price per $1,000 principal amount of Notes
beginning on the next Trading Day and on each successive Trading
Day until the Trading Price per $1,000 principal amount of Notes is
greater than or equal to 98% of the product of the Last Reported
Sale Price of the Common Stock and the Conversion Rate and instruct
three independent nationally recognized securities dealers to
deliver bids to the Bid Solicitation Agent. If the Company does not
instruct the Bid Solicitation Agent to determine the Trading Price
per $1,000 principal amount of Notes when obligated as provided in
the preceding sentence, or if the Company instructs the Bid
Solicitation Agent in writing to obtain bids and the Bid
Solicitation Agent fails to make such determination, then, in
either case, the Trading Price per $1,000 principal amount of Notes
shall be deemed to be less than 98% of the product of the Last
Reported Sale Price of the Common Stock and the Conversion Rate on
each Trading Day of such failure. If the Trading Price condition
set forth above has been met, the Company shall so notify the
Holders, the Trustee and the Conversion Agent (if other than the
Trustee) in writing. If, at any time after the Trading Price
condition set forth above has been met, the Trading Price per
$1,000 principal amount of Notes is greater than or equal to 98% of
the product of the Last Reported Sale Price of the Common Stock and
the Conversion Rate for such date, the Company shall so notify the
Holders of the Notes, the Trustee and the Conversion Agent (if
other than the Trustee) in writing.
55
(ii) If,
prior to the close of business on the Business Day immediately
preceding July 1, 2024, the Company elects to:
(A) issue
to all or substantially all holders of the Common Stock any rights,
options or warrants (other than pursuant to a stockholder rights
plan in respect of which the stockholder rights have not separated
from the shares of Common Stock) entitling them, for a period of
not more than 45 calendar days after the announcement date of such
issuance, to subscribe for or purchase shares of the Common Stock
at a price per share that is less than the average of the Last
Reported Sale Prices of the Common Stock for the 10 consecutive
Trading Day period ending on, and including, the Trading Day
immediately preceding the date of announcement of such issuance;
or
(B) distribute
to all or substantially all holders of the Common Stock the
Company’s assets, securities or rights to purchase securities
of the Company (other than pursuant to a stockholder rights plan in
respect of which the stockholder rights have not separated from the
shares of Common Stock), which distribution has a per share value,
as reasonably determined by the Board of Directors, exceeding 10%
of the Last Reported Sale Price of the Common Stock on the Trading
Day preceding the date of announcement for such
distribution,
then,
in either case, the Company shall notify all Holders of the Notes,
the Trustee and the Conversion Agent (if other than the Trustee) in
writing at least 50 Scheduled Trading Days prior to the Ex-Dividend
Date for such issuance or distribution. Once the Company has given
such notice, a Holder may surrender all or any portion of its Notes
for conversion at any time until the earlier of (1) the close
of business on the Business Day immediately preceding the
Ex-Dividend Date for such issuance or distribution and (2) the
Company’s announcement that such issuance or distribution
will not take place, in each case, even if the Notes are not
otherwise convertible at such time.
(iii) If
(A) a transaction or event that constitutes (x) a Fundamental
Change or (y) a Make-Whole Fundamental Change occurs prior to the
close of business on the Business Day immediately preceding July 1,
2024, regardless of whether a Holder has the right to require the
Company to repurchase the Notes pursuant to Section 15.02,
or (B) the Company is a party to a Share Exchange that occurs prior
to the close of business on the Business Day immediately preceding
July 1, 2024 (each such Fundamental Change, Make-Whole Fundamental
Change or Share Exchange Event a “Corporate
Event”), then, in each
case, all or any portion of a Holder’s Notes may be
surrendered for conversion at any time on or after the effective
date of such Corporate Event until 35 Trading Days after the
effective date of such Corporate Event or, if such Corporate Event
also constitutes a Fundamental Change, until the related
Fundamental Change Repurchase Date. The Company shall notify
Holders, the Trustee and the Conversion Agent (if other than the
Trustee) in writing no later than the effective date of such
Corporate Event.
56
(iv) Prior
to the close of business on the Business Day immediately preceding
July 1, 2024, a Holder may surrender all or any portion of its
Notes for conversion at any time during any calendar quarter
commencing after the calendar quarter ending on March 31, 2020 (and
only during such calendar 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, and including, the last Trading Day of the immediately
preceding calendar quarter is greater than or equal to 130% of the
Conversion Price on each applicable Trading Day. The Company shall
determine at the beginning of each calendar quarter commencing
after July 1, 2020 whether the Notes may be surrendered for
conversion in accordance with this clause (iv) and shall
notify in writing the Holders, the Trustee and the Conversion Agent
(if other than the Trustee) if the Notes become convertible in
accordance with this clause (iv).
(v) If
the Company calls any or all of the Notes for redemption pursuant
to Article 16,
then a Holder may surrender all or any portion of its Notes for
conversion at any time prior to the close of business on the
Scheduled Trading Day prior to the Redemption Date, even if the
Notes are not otherwise convertible at such time. After that time,
the right to convert 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
Notes may convert its Notes until the Business Day immediately
preceding the date on which the Redemption Price has been paid or
duly provided for.
(c) For
any Conversion Date that occurs on or after January 14, 2021 or
after the occurrence of any 30 Trading Day period during which the
Last Reported Sale Price of the Common Stock has been at least 130%
of the Conversion Price then in effect for at least 20 Trading Days
(whether or not consecutive), the Company shall, in addition to the
other consideration payable or deliverable in connection with any
conversion of Notes, make an interest make-whole payment (an
“Interest Make-Whole
Payment”) to such
converting Holder equal to the sum of the present values of the
scheduled payments of interest that would have been made on the
Notes to be converted had such Notes remained outstanding from the
Conversion Date through the earlier of (i) the date that is two
years after the Conversion Date and (ii) February 15, 2023, if the
Notes had not been so converted. The present values of the
remaining interest payments shall be computed by the Company in
good faith using a discount rate equal to 2.0%.
If a
Conversion Date occurs 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, the Company
shall not pay accrued interest to any converting Holder and shall
instead pay the full amount of the relevant interest payment on
such Interest Payment Date to the Holder of record on such Regular
Record Date. In such case, the Interest Make-Whole Payment to such
converting Holder shall equal the present value of all remaining
interest payments, starting with the next Interest Payment Date for
which interest has not been provided for until the earlier of (i)
the date that is two years after the Conversion Date and (ii)
February 15, 2023, if the notes had not been so converted,
computed by the Company in good faith using a discount rate equal
to 2.0%.
57
The
Company may pay any Interest Make-Whole Payment either in cash or
shares of Common Stock, at its election. In order to make an
election to pay any Interest Make-Whole Payment in cash or shares
of Common Stock, the Company shall notify in writing all Holders of
the Notes, the Trustee, Paying Agent and the Conversion Agent (if
other than the Trustee) of such election at least 15 Scheduled
Trading Days prior to January 14, 2021. Thereafter, the Company
shall be permitted to make such an election no earlier than 30
Scheduled Trading Days prior to, but no later than 15 Scheduled
Trading Days before, the first Scheduled Trading Day of each
calendar quarter that begins on or after July 1, 2020, which
election shall be effective from the period that begins at the open
of business on the first Scheduled Trading Day of such calendar
quarter and ends immediately prior to the open of business on the
first Scheduled Trading Day of the immediately succeeding calendar
quarter. If the Company does not make an election with respect to
any Interest Make-Whole Payment to pay in cash or shares of Common
Stock, the payment of any such Interest Make-Whole Payment shall be
in shares of Common Stock. The Company’s election with
respect to any Interest Make-Whole Payment required to be paid
prior to January 14, 2021 is to pay in shares of Common Stock. If
the Company elects (or is deemed to have elected) to pay any
Interest Make-Whole Payment by delivering shares Common Stock, the
number of shares of Common Stock a converting Holder of Notes shall
receive shall be equal to the amount of the Interest Make-Whole
Payment due divided by the greater of (A) the product of (x) 95.0%
and (y) the simple average of the daily VWAP of the Common Stock
for the 10 trading days ending on and including the Trading Day
immediately preceding the Conversion Date and (B) the Conversion
Price (rounded to the nearest ten-thousandth) on the applicable
Conversion Date. The Company shall pay cash in lieu of delivering
any fractional share of Common Stock as described under Section
14.02(j). If the Company elects to pay any Interest Make-Whole
Payment in cash, the Company shall pay cash in an amount equal to
the Interest Make-Whole Payment.
Notwithstanding the
foregoing, (x) if the Company elects (or is deemed to have elected)
to pay any Interest Make-Whole Payment in shares of Common Stock,
the number of shares of Common Stock the Company may deliver in
connection with a conversion of the Notes, including those
delivered in connection with an Interest Make-Whole Payment, shall
not exceed 1,233.0456 shares of Common Stock per $1,000 principal
amount of Notes, subject to adjustment at the same time and in the
same manner as the Conversion Rate as set forth under Section 14.04
and (y) if the Company elects to pay any Interest Make-Whole
Payment in cash, the amount of cash the Company may deliver in
connection with any such Interest Make-Whole Payment shall not
exceed 1,233.0456 per $1,000 principal amount of Notes. The Company
shall not be required to make any cash payments in lieu of any
fractional share or have any further obligation to deliver any
shares of Common Stock or pay any cash in excess of the threshold
described in the preceding sentence. In addition, if in connection
with any conversion the Conversion Rate is adjusted pursuant to
Section 14.03, then
such Holder shall not receive the Interest Make-Whole Payment with
respect to such Note. None of the Trustee, Paying Agent or
Conversion Agent shall be responsible for determining, calculating
or verifying the Company’s calculations of, the Interest
Make-Whole Payment.
Section
14.02 Conversion
Procedure; Settlement Upon Conversion.
(a) Subject
to this Section 14.02,
Section 14.03(b),
Section 14.07(a)
and Section 14.12,
upon conversion of any Note, the Company shall pay or deliver, as
the case may be, to the converting Holder, in respect of each
$1,000 principal amount of Notes being converted, cash
(“Cash
Settlement”), shares of
Common Stock, together with cash, if applicable, in lieu of
delivering any fractional share of Common Stock in accordance with
subsection (j) of this Section 14.02
(“Physical
Settlement”) or a
combination of cash and shares of Common Stock, together with cash,
if applicable, in lieu of delivering any fractional share of Common
Stock in accordance with subsection (j) of this
Section 14.02
(“Combination
Settlement”), at its
election, as set forth in this Section 14.02.
58
(i) All
conversions for which the relevant Conversion Date occurs on or
after July 1, 2024, and all conversions for which the relevant
Conversion Date occurs on or after the Company’s issuance of
a Redemption Notice with respect to the Notes and prior to the
related Redemption Date (a “Redemption
Period”), shall be
settled using the same Settlement Method.
(ii) Except
for any conversions for which the relevant Conversion Date occurs
on or after July 1, 2024, and any conversions for which the
relevant Conversion Date occurs during a Redemption Period, the
Company shall use the same Settlement Method for all conversions
with the same Conversion Date, but the Company shall not have any
obligation to use the same Settlement Method with respect to
conversions with different Conversion Dates.
(iii) If,
in respect of any Conversion Date (or one of the periods described
in the third immediately succeeding set of parentheses, as the case
may be), the Company elects to deliver a notice (the
“Settlement
Notice”) of the relevant
Settlement Method in respect of such Conversion Date (or such
period, as the case may be), the Company shall deliver such
Settlement Notice in writing to converting Holders, the Trustee and
the Conversion Agent (if other than the Trustee) no later than the
close of business on the Scheduled Trading Day immediately
following the relevant Conversion Date (or, in the case of any
conversions for which the relevant Conversion Date occurs
(x) during a Redemption Period, in the related Redemption
Notice or (y) on or after July 1, 2024, no later than July 1,
2024). If the Company does not elect a Settlement Method prior to
the deadline set forth in the immediately preceding sentence, the
Company shall no longer have the right to elect Cash Settlement or
Physical Settlement for such conversion or during such period and
the Company shall be deemed to have elected Combination Settlement
in respect of its Conversion Obligation, and the Specified Dollar
Amount per $1,000 principal amount of Notes shall be equal to
$1,000. Such Settlement Notice shall specify the relevant
Settlement Method and in the case of an election of Combination
Settlement, the relevant Settlement Notice shall indicate the
Specified Dollar Amount per $1,000 principal amount of Notes. If
the Company timely delivers a Settlement Notice electing
Combination Settlement in respect of its Conversion Obligation but
does not indicate a Specified Dollar Amount per $1,000 principal
amount of Notes in such Settlement Notice, the Specified Dollar
Amount per $1,000 principal amount of Notes shall be deemed to be
$1,000.
(iv) 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 to satisfy its Conversion Obligation in respect
of such conversion by Physical Settlement, subject to the Ownership Limitation, the Company
shall deliver to the converting Holder in respect of each $1,000
principal amount of Notes being converted a number of shares of
Common Stock equal to the Conversion Rate in effect on the
Conversion Date, together with the amount of cash payable in lieu
of delivering any fractional share of Common Stock, and an Interest
Make-Whole Payment, if applicable;
59
(B) if
the Company elects to satisfy its Conversion Obligation in respect
of such conversion by Cash Settlement, subject to the Ownership
Limitation, the Company shall pay to the converting Holder in
respect of each $1,000 principal amount of Notes being converted
cash in an amount equal to the sum of the Daily Conversion Values
for each of the 40 consecutive Trading Days during the related
Observation Period, together with the amount of cash payable in
lieu of delivering any fractional share of Common Stock, and an
Interest Make-Whole Payment, if applicable; and
(C) if
the Company elects (or is deemed to have elected) to satisfy its
Conversion Obligation in respect of such conversion by Combination
Settlement, subject to the Ownership Limitation, the Company shall
pay or deliver, as the case may be, in respect of each $1,000
principal amount of Notes being converted, a Settlement Amount
equal to the sum of the Daily Settlement Amounts for each of the 40
consecutive Trading Days during the related Observation Period,
together with the amount of cash payable in lieu of delivering any
fractional share of Common Stock, and an Interest Make-Whole
Payment, if applicable.
(v) The
Daily Settlement Amounts (if applicable) and the Daily Conversion
Values (if applicable) shall be determined by the Company promptly
following the last day of the Observation Period. Promptly after
such determination of the Daily Settlement Amounts or the Daily
Conversion Values, as the case may be, and the amount of cash
payable in lieu of delivering any fractional share of Common Stock,
the Company shall notify the Trustee and the Conversion Agent (if
other than the Trustee) of the Daily Settlement Amounts or the
Daily Conversion Values, as the case may be, and the amount of cash
payable in lieu of delivering fractional shares of Common Stock.
The Trustee and the Conversion Agent (if other than the Trustee)
shall have no responsibility for any such
determination.
(b) Subject
to Section 14.02(e),
before any Holder of a Note shall be entitled to convert a Note as
set forth above, such Holder shall (i) in the case of a Global
Note, comply with the procedures of the Depositary in effect at
that time and, if required, pay funds equal to interest payable on
the next Interest Payment Date to which such Holder is not entitled
as set forth in Section 14.02(h)
and (ii) in the case of a
Physical Note (1) complete, manually sign and deliver an
irrevocable notice to the Conversion Agent as set forth in the Form
of Notice of Conversion (or a facsimile or other electronic
transmission thereof) (a “Notice of
Conversion”) at the
office of the Conversion Agent and state in writing therein the
principal amount of Notes to be converted and the name or names
(with addresses) in which such Holder wishes the certificate or
certificates for any shares of Common Stock to be delivered upon
settlement of the Conversion Obligation to be registered,
(2) surrender such Notes, duly endorsed to the Company or in
blank (and accompanied by appropriate endorsement and transfer
documents), at the office of the Conversion Agent, (3) if
required, furnish appropriate endorsements and transfer documents
and (4) if required, pay funds equal to interest payable on
the next Interest Payment Date to which such Holder is not entitled
as set forth in Section 14.02(h).
The Trustee (and if different, the Conversion Agent) shall notify
the Company of any conversion pursuant to this Article 14
on the Conversion Date for such
conversion. No Notice of Conversion with respect to any Notes may
be surrendered by a Holder thereof if such Holder has also
delivered a Fundamental Change Repurchase Notice to the Company in
respect of such Notes and has not validly withdrawn such
Fundamental Change Repurchase Notice in accordance with
Section 15.03.
60
If more
than one Note shall be surrendered for conversion at one time by
the same Holder, the Conversion Obligation with respect to such
Notes shall be computed on the basis of the aggregate principal
amount of the Notes (or specified portions thereof to the extent
permitted thereby) so surrendered.
(c) A
Note shall be deemed to have been converted immediately prior to
the close of business on the date (the “Conversion
Date”) that the Holder
has complied with the requirements set forth in subsection (b)
above. Except as set forth in Section 14.03(b)
and Section 14.07(a),
the Company shall pay or deliver, as the case may be, the
consideration due in respect of the Conversion Obligation on the
second Business Day immediately following the relevant Conversion
Date, if the Company elects Physical Settlement, or on the second
Business Day immediately following the last Trading Day of the
Observation Period, in the case of any other Settlement Method. If
any shares of Common Stock are due to a converting Holder, the
Company shall issue or cause to be issued, and deliver (if
applicable) to the Conversion Agent or to such Holder, or such
Holder’s nominee or nominees, the full number of shares of
Common Stock to which such Holder shall be entitled, in book-entry
format through the Depositary, in satisfaction of the
Company’s Conversion Obligation.
(d) In
case any Physical Note shall be surrendered for partial conversion,
the Company shall execute and the Trustee shall authenticate and
deliver to or upon the written order of the Holder of the Physical
Note so surrendered a new Physical Note or Notes in authorized
denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Physical Note, without
payment of any service charge by the converting Holder but, if
required by the Company or Trustee, with payment of a sum
sufficient to cover any documentary, stamp or similar issue or
transfer tax or similar governmental charge required by law or that
may be imposed in connection therewith as a result of the name of
the Holder of the new Physical Notes issued upon such conversion
being different from the name of the Holder of the old Physical
Notes surrendered for such conversion.
(e) If
a Holder submits a Note for conversion, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the
issue of any shares of Common Stock upon conversion, unless the tax
is due because the Holder requests such shares to be issued in a
name other than the Holder’s name, in which case the Holder
shall pay that tax. The Conversion Agent may refuse to deliver the
certificates representing the shares of Common Stock being issued
in a name other than the Holder’s name until the Trustee
receives a sum sufficient to pay any tax that is due by such Holder
in accordance with the immediately preceding
sentence.
(f) Except
as provided in Section 14.04,
no adjustment shall be made for dividends on any shares of Common
Stock issued upon the conversion of any Note as provided in
this Article 14.
(g) Upon
the conversion of an interest in a Global Note, the Trustee, or the
Custodian at the direction of the Trustee, shall make a notation on
such Global Note as to the reduction in the principal amount
represented thereby. The Company shall notify the Trustee in
writing of any conversion of Notes effected through any Conversion
Agent other than the Trustee.
61
(h) Upon
conversion, a Holder shall not receive any separate cash payment
for accrued and unpaid interest, if any, except as set forth below
and under Section
14.01(c). The Company’s
settlement of the full Conversion Obligation shall be deemed to
satisfy in full its obligation to pay the principal amount of the
Note and accrued and unpaid interest, if any, to, but not
including, the relevant Conversion Date. As a result, accrued and
unpaid interest, if any, to, but not including, the relevant
Conversion Date shall be deemed to be paid in full rather than
cancelled, extinguished or forfeited. Upon a conversion of Notes
into a combination of cash and shares of Common Stock, accrued and
unpaid interest will be deemed to be paid first out of the cash
paid upon such conversion. Notwithstanding the foregoing, if Notes
are converted 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, Holders of such Notes as
of the close of business on such Regular Record Date will receive
the full amount of interest payable on such Notes on the
corresponding Interest Payment Date notwithstanding the conversion.
Notes surrendered for conversion during the period from the close
of business on any Regular Record Date to the open of business on
the immediately following Interest Payment Date must be accompanied
by funds equal to the amount of interest payable on the Notes so
converted; provided that no such payment shall be required
(1) for conversions following the Regular Record Date
immediately preceding the Maturity Date; (2) if the Company
has specified a Redemption Date that is after a Regular Record Date
and on or prior to the second Business Day immediately following
the corresponding Interest Payment Date (or, if such Interest
Payment Date is not a Business Day, the third Business Day
immediately following such 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,
if such Interest Payment Date is not a Business Day, the second
Business Day immediately following such Interest Payment Date);
(4) for Notes in respect of which an Interest Make-Whole
Payment is payable upon conversion; or (5) to the extent of
any Defaulted Amounts, if any Defaulted Amounts exists at the time
of conversion with respect to such Note. Therefore, for the
avoidance of doubt, all Holders of record after the close of
business on the Regular Record Date immediately preceding the
Maturity Date, a Redemption Date or Fundamental Change Repurchase
Date described in clauses (2)
and (3)
of this Section
14.02(h), and any Holders of
record entitled to receive an Interest Make-Whole Payment upon
conversion described in clause (4) of this Section
14.02(h) shall receive the full
interest payment due on the Maturity Date or other applicable
Interest Payment Date in cash regardless of whether their Notes
have been converted following such Regular Record
Date.
(i) The
Person in whose name the shares of Common Stock shall be issuable
upon conversion shall be treated as a stockholder of record as of
the close of business on the relevant Conversion Date (if the
Company elects to satisfy the related Conversion Obligation by
Physical Settlement) or the last Trading Day of the relevant
Observation Period (if the Company elects to satisfy the related
Conversion Obligation by Combination Settlement), as the case may
be. Upon a conversion of Notes, such Person shall no longer be a
Holder of such Notes surrendered for
conversion.
(j) The
Company shall not issue any fractional share of Common Stock upon
conversion of the Notes and shall instead pay cash in lieu of
delivering any fractional share of Common Stock issuable upon
conversion based on the Daily VWAP for the relevant Conversion Date
(in the case of Physical Settlement) or based on the Daily VWAP for
the last Trading Day of the relevant Observation Period (in the
case of Combination Settlement). For each Note surrendered for
conversion, if the Company has elected Combination Settlement, the
full number of shares that shall be issued upon conversion thereof
shall be computed on the basis of the aggregate Daily Settlement
Amounts for the relevant Observation Period and any fractional
shares remaining after such computation shall be paid in
cash.
62
Section
14.03
Increased
Conversion Rate Applicable to Certain Notes Surrendered in
Connection with Make-Whole Fundamental Changes or Redemption
Notice. (a) If
(x) the Effective Date of a Make-Whole Fundamental Change
occurs prior to the Maturity Date or (y) the Company gives a
Redemption Notice with respect to any or all of the Notes in
accordance with Section 16.02 and, in each
case, a Holder elects to convert its Notes in connection with such
Make-Whole Fundamental Change or Redemption Notice, as applicable,
the Company shall, under the circumstances described below,
increase the Conversion Rate for the Notes so surrendered for
conversion by a number of additional shares of Common Stock (the
“Additional
Shares”), as described below. A conversion of Notes
shall be deemed for these purposes to be “in connection
with” such Make-Whole Fundamental Change if the relevant
Notice of Conversion is received by the Conversion Agent from, and
including, the Effective Date of the Make-Whole Fundamental Change
up to, and including, the Business Day immediately prior to the
related Fundamental Change Repurchase Date (or, in the case of a
Make-Whole Fundamental Change that would have been a Fundamental
Change but for the proviso in clause (b) of the definition
thereof, the 35th Trading Day immediately following the Effective
Date of such Make-Whole Fundamental Change) (such period, the
“Make-Whole Fundamental
Change Period”). A conversion of Notes shall be deemed
for these purposes to be “in connection with” a
Redemption Notice if the relevant Notice of Conversion is received
by the Conversion Agent from, and including, the date of the
Redemption Notice until the close of business on the Scheduled
Trading Day immediately preceding corresponding Redemption
Date.
(b) Subject
to Section
14.03(f) below, upon surrender
of Notes for conversion in connection with a Make-Whole Fundamental
Change pursuant to Section 14.01(b)(iii)
or Redemption Notice pursuant
to Section 14.01(b)(v),
the Company shall, at its option, satisfy the related Conversion
Obligation by Physical Settlement, Cash Settlement or Combination
Settlement in accordance with Section 14.02
based on the Conversion Rate as
increased to reflect the Additional Shares pursuant to
Section
14.03(f) below;
provided, however, that if, at the effective time of a Make-Whole
Fundamental Change described in clause (b) of the definition
of Fundamental Change, the Reference Property following such
Make-Whole Fundamental Change is composed entirely of cash, for any
conversion of Notes following the Effective Date of such Make-Whole
Fundamental Change, the Conversion Obligation shall be calculated
based solely on the Stock Price for the transaction and shall be
deemed to be an amount of cash per $1,000 principal amount of
converted Notes equal to the Conversion Rate (including any
adjustment for Additional Shares), multiplied by
such Stock Price. The Company shall
notify the Holders of Notes, the Trustee and the Conversion Agent
(if other than the Trustee) in writing of the Effective Date of any
Make-Whole Fundamental Change and issue a press release announcing
such Effective Date no later than five Business Days after such
Effective Date.
(c) The
number of Additional Shares, if any, by which the Conversion Rate
shall be increased shall be determined by reference to
Section
14.03(f) below, based on the
date on which the Make-Whole Fundamental Change occurs or becomes
effective, or the date of the relevant Redemption Notice, as the
case may be (in each case, the “Effective
Date”), 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 Optional
Redemption, as the case may be (the “Stock Price”). If the holders of the Common Stock
receive in exchange for their Common Stock only cash in a
Make-Whole Fundamental Change described in clause (b) of the
definition of Fundamental Change, the Stock Price shall be the cash
amount paid per share. Otherwise, the Stock Price shall be the
average of the Last Reported Sale Prices of the Common Stock over
the five consecutive Trading Day period ending on, and including,
the Trading Day immediately preceding the Effective Date of the
Make-Whole Fundamental Change or the date of the Redemption Notice,
as the case may be.
63
(d) In
the event that a conversion in connection with a Redemption Notice
would also be deemed to be in connection with a Make-Whole
Fundamental Change, a Holder of the Notes to be converted will be
entitled to a single increase to the Conversion Rate with respect
to the first to occur of the date of the applicable Redemption
Notice or the Effective Date of the applicable Make-Whole
Fundamental Change, and the later event will be deemed not to have
occurred for purposes of this Section
14.03. The Board of Directors
shall make appropriate adjustments to the Stock Price, in its good
faith determination, to account for any adjustment to the
Conversion Rate that becomes effective, or any event requiring an
adjustment to the Conversion Rate where the Ex-Dividend Date,
Effective Date (as such term is used in Section 14.04)
or expiration date of the event occurs during such five consecutive
Trading Day period.
(e) The
Stock Prices set forth in Section
14.03(f) below shall be
adjusted as of any date on which the Conversion Rate for the Notes
is otherwise adjusted. The adjusted Stock Prices shall equal the
Stock Prices applicable immediately prior to such
adjustment, multiplied by
a fraction, the numerator of which is
the Conversion Rate immediately prior to such adjustment giving
rise to the Stock Price adjustment and the denominator of which is
the Conversion Rate as so adjusted. The number of Additional Shares
set forth in Section
14.03(f) below shall be
adjusted in the same manner and at the same time as the Conversion
Rate as set forth in Section 14.04.
(f) The
following sets forth the number of Additional Shares by which the
Conversion Rate shall be increased pursuant to this
Section 14.03:
(i) If
the Stock Price is greater than $1.00 (subject to adjustment in the
same manner as the Stock Prices pursuant to subsection (d)
above) (as so adjusted, the “Make-Whole Adjustment Reference
Price”), a number of
Additional Shares shall be added to the Conversion Rate equal to
the following (rounded to the nearest
ten-thousandth):
where,
AS
= the number of Additional Shares calculated pursuant
to this Section
14.03(f)(i);
CR0
= the Conversion Rate in effect immediately
prior to adjustment pursuant to this Section
14.03(f)(i);
MWRP
= the Make-Whole Adjustment Reference Price in
effect as of the calculation of the number of Additional Shares
pursuant to this Section
14.03(f)(i); and
SP
= the Stock Price; and
64
(ii) if
the Stock Price is less than or equal to the Make-Whole Adjustment
Reference Price, no Additional Shares shall be added to the
Conversion Rate; provided, however, that, notwithstanding anything in
Section
14.01(a) to the contrary, the
Company’s Conversion Obligation in connection with such
conversion shall be, and the Company shall settle such Conversion
Obligation solely by, the payment or delivery to the converting
Holder in respect of each $1,000 principal amount of Notes being
converted of either (A) $1,000 in cash or (B) subject to the
Ownership Limitation, a number of shares of Common Stock equal to
$1,000 divided by the Make-Whole Fundamental Change VWAP, in either
case together with the amount of cash payable in lieu of delivering
any fractional share of Common Stock, and an Interest Make-Whole
Payment, if applicable; provided, further, that if the number of
shares of Common Stock deliverable pursuant to this
Section
14.03(f)(ii) is reduced as a
result of the immediately following sentence, then the Company
shall settle such Conversion Obligation through clause (A)
above.
Notwithstanding
the foregoing, in no event shall the Conversion Rate per $1,000
principal amount of Notes, or the number of shares of Common Stock
per $1,000 principal amount of Notes delivered by the Company in
settlement of the Conversion Obligation pursuant to Section 14.03(f)(ii), exceed
1,233.0456 shares of
Common Stock, subject to adjustment in the same manner as the
Conversion Rate pursuant to Section 14.04.
(g) Nothing
in this Section 14.03
shall prevent an adjustment to the
Conversion Rate pursuant to Section 14.04
in respect of a Make-Whole Fundamental
Change.
Section
14.04
Adjustment
of Conversion Rate. The Conversion Rate shall be adjusted
from time to time by the Company if any of the following events
occurs, except that the Company shall not make any adjustments to
the Conversion Rate if Holders of the Notes participate (other than
in the case of (x) a share split or share combination or
(y) a tender or exchange offer), at the same time and upon the
same terms as holders of the Common Stock and solely as a result of
holding the Notes, in any of the transactions described in this
Section 14.04,
without having to convert their Notes, as if they held a number of
shares of Common Stock equal to the Conversion Rate, multiplied by the principal amount
(expressed in thousands) of Notes held by such Holder.
(a) If
the Company exclusively issues shares of Common Stock as a dividend
or distribution on shares of the Common Stock, or if the Company
effects a share split or share combination in respect of the Common
Stock, the Conversion Rate shall be adjusted based on the following
formula:
where,
CR0
= the Conversion Rate in effect immediately prior to
the 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 share combination, as
applicable;
CR1
= the Conversion Rate in
effect immediately after the open of business on such Ex- Dividend
Date or Effective Date;
OS0
= the number of shares
of Common Stock outstanding immediately prior to the open of
business on such Ex-Dividend Date or Effective Date;
and
OS1
= the number of shares
of Common Stock outstanding immediately after giving effect to such
dividend, distribution, share split or share
combination.
65
Any
adjustment made under this Section 14.04(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 14.04(a) is
declared but not so paid or made, the Conversion Rate shall be
immediately readjusted, effective as of the date the Board of
Directors determines not to pay such dividend or distribution, to
the Conversion Rate that would then be in effect if such dividend
or distribution had not been declared.
(b) If
the Company issues to all or substantially all holders of the
Common Stock any rights, options or warrants (other than in
connection with a stockholder rights plan) entitling them, for a
period of not more than 45 calendar days after the announcement
date of such issuance, to subscribe for or purchase shares of the
Common Stock at a price per share that is less than the average of
the Last Reported Sale Prices of the Common Stock for the 10
consecutive Trading Day period ending on, and including, the
Trading Day immediately preceding the date of announcement of such
issuance, the Conversion Rate shall be increased based on the
following formula:
where,
CR0
= the Conversion Rate in effect
immediately prior to the 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.
Any
increase made under this Section 14.04(b) shall 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 shares of the Common Stock are not delivered after the
expiration of such rights, options or warrants, the Conversion Rate
shall be decreased to the Conversion Rate that would then be in
effect had the increase with respect to the issuance of such
rights, options or warrants been made on the basis of delivery of
only the number of shares of Common Stock actually delivered. If
such rights, options or warrants are not so issued, the Conversion
Rate shall be decreased to the Conversion Rate that would then be
in effect if such Ex-Dividend Date for such issuance had not
occurred.
66
For
purposes of this Section 14.04(b) and for
the purpose of Section 14.01(b)(ii)(A),
in determining whether any rights, options or warrants entitle the
holders to subscribe for or purchase shares of the Common Stock at
less than such average of the Last Reported Sale Prices of the
Common Stock for the 10 consecutive Trading Day period ending on,
and including, the Trading Day immediately preceding the date of
announcement for such issuance, and in determining the aggregate
offering price of such shares of Common Stock, there shall be taken
into account any consideration received by the Company for such
rights, options or warrants and any amount payable on exercise or
conversion thereof, the value of such consideration, if other than
cash, to be determined by the Board of Directors.
(c) If
the Company distributes shares of its Capital Stock, evidences of
its indebtedness, other assets or property of the Company or
rights, options or warrants to acquire its Capital Stock or other
securities, to all or substantially all holders of the Common
Stock, excluding (i) dividends, distributions or issuances as
to which an adjustment was effected pursuant to Section 14.04(a)
or Section 14.04(b),
(ii) dividends or distributions paid exclusively in cash as to
which an adjustment was effected pursuant to Section 14.04(d),
(iii) except as otherwise provided in Section 14.11,
rights issued under a stockholder rights plan of the Company,
(iv) distributions of Reference Property in exchange for or
upon conversion of the Common Stock in a Share Exchange Event and
(v) Spin-Offs as to which the provisions set forth below in
this Section 14.04(c)
shall apply (any of such shares of
Capital Stock, evidences of indebtedness, other assets or property
or rights, options or warrants to acquire Capital Stock or other
securities, the “Distributed
Property”), then the
Conversion Rate shall be increased based on the following
formula:
where,
CR0
= the Conversion Rate in effect
immediately prior to the 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
= t he fair market
value (as determined by the Board of Directors) of the Distributed
Property with respect to each outstanding share of the Common Stock
on the Ex- Dividend Date for such distribution
67
Any
increase made under the portion of this Section 14.04(c) above
shall become effective immediately after the open of business on
the Ex-Dividend Date for such distribution. If such distribution is
not so paid or made, the Conversion Rate shall be decreased to the
Conversion Rate that would then be in effect if such distribution
had not been declared. Notwithstanding the foregoing, if
“FMV” (as defined above) is equal to or greater than
“SP0” (as
defined above), in lieu of the foregoing increase, each Holder of a
Note shall receive, in respect of each $1,000 principal amount
thereof, at the same time and upon the same terms as holders of the
Common Stock receive the Distributed Property, the amount and kind
of Distributed Property such Holder would have received if such
Holder owned a number of shares of Common Stock equal to the
Conversion Rate in effect on the Ex-Dividend Date for the
distribution. If the Board of Directors determines the
“FMV” (as defined above) of any distribution for
purposes of this Section 14.04(c) by
reference to the actual or when-issued trading market for any
securities, it shall in doing so consider the prices in such market
over the same period used in computing the Last Reported Sale
Prices of the Common Stock over the 10 consecutive Trading Day
period ending on, and including, the Trading Day immediately
preceding the Ex-Dividend Date for such distribution.
With
respect to an adjustment pursuant to this Section 14.04(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 any Subsidiaries or other
business units of the Company, that are, or, when issued, will be,
listed or admitted for trading on a U.S. national securities
exchange (a “Spin-Off”), the Conversion Rate
shall be increased based on the following formula:
where,
CR0
= the Conversion Rate in effect
immediately prior to the 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 the Common Stock applicable to
one share of the Common Stock (determined by reference to the
definition of Last Reported Sale Price as set forth in Section 1.01 as if
references therein to Common Stock were to such Capital Stock or
similar equity interest) over the first 10 consecutive Trading Day
period after, and including, the Ex-Dividend Date of the Spin-Off
(the “Valuation
Period”); an
MP0
= the average of the Last Reported Sale
Prices of the Common Stock over the Valuation Period.
The
adjustment to the Conversion Rate under the preceding paragraph
shall 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, references to “10”
in the preceding paragraph shall be deemed to be replaced with such
lesser number of Trading Days as have elapsed between the
Ex-Dividend Date of such Spin-Off and the 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 Trading Day that falls within the
relevant Observation Period for such conversion and within the
Valuation Period, references to “10” in the preceding
paragraph shall be deemed to be replaced with such lesser number of
Trading Days as have elapsed between the Ex-Dividend Date of such
Spin-Off and such Trading Day in determining the Conversion Rate as
of such Trading Day.
68
For
purposes of this Section 14.04(c) (and
subject in all respect to Section 14.11), rights,
options or warrants distributed by the Company to all holders of
the Common Stock entitling them to subscribe for or purchase shares
of the Company’s Capital Stock, including Common Stock
(either initially or under certain circumstances), which rights,
options or warrants, until the occurrence of a specified event or
events (“Trigger
Event”): (i) are deemed to be transferred with
such shares of the Common Stock; (ii) are not exercisable; and
(iii) are also issued in respect of future issuances of the
Common Stock, shall be deemed not to have been distributed for
purposes of this Section 14.04(c) (and no
adjustment to the Conversion Rate under this Section 14.04(c) will be
required) until the occurrence of the earliest Trigger Event,
whereupon such rights, options or warrants shall be deemed to have
been distributed and an appropriate adjustment (if any is required)
to the Conversion Rate shall be made under this Section 14.04(c). If any
such right, option or warrant, including any such existing rights,
options or warrants distributed prior to the date of this
Indenture, are subject to events, upon the occurrence of which such
rights, options or warrants become exercisable to purchase
different securities, evidences of indebtedness or other assets,
then the date of the occurrence of any and each such event shall be
deemed to be the date of distribution and Ex-Dividend Date with
respect to new rights, options or warrants with such rights (in
which case the existing rights, options or warrants shall be deemed
to terminate and expire on such date without exercise by any of the
holders thereof). In addition, in the event of any distribution (or
deemed distribution) of rights, options or warrants, or any Trigger
Event or other event (of the type described in the immediately
preceding sentence) with respect thereto that was counted for
purposes of calculating a distribution amount for which an
adjustment to the Conversion Rate under this Section 14.04(c) was made,
(1) in the case of any such rights, options or warrants that
shall all have been redeemed or purchased without exercise by any
holders thereof, upon such final redemption or purchase
(x) the Conversion Rate shall be readjusted as if such rights,
options or warrants had not been issued and (y) the Conversion
Rate shall then again be readjusted to give effect to such
distribution, deemed distribution or Trigger Event, as the case may
be, as though it were a cash distribution, equal to the per share
redemption or purchase price received by a holder or holders of
Common Stock with respect to such rights, options or warrants
(assuming such holder had retained such rights, options or
warrants), made to all holders of Common Stock as of the date of
such redemption or purchase, and (2) in the case of such
rights, options or warrants that shall have expired or been
terminated without exercise by any holders thereof, the Conversion
Rate shall be readjusted as if such rights, options and warrants
had not been issued.
For
purposes of Section 14.04(a),
Section 14.04(b) and this
Section 14.04(c), if any
dividend or distribution to which this Section 14.04(c) is
applicable also includes one or both of:
(A) a
dividend or distribution of shares of Common Stock to which
Section 14.04(a)
is applicable (the
“Clause A
Distribution”);
or
(B) a
dividend or distribution of rights, options or warrants to
which Section 14.04(b)
is applicable (the
“Clause B
Distribution”),
69
then,
in either case, (1) such dividend or distribution, other than
the Clause A Distribution and the Clause B Distribution, shall be
deemed to be a dividend or distribution to which this Section 14.04(c) is
applicable (the “Clause C
Distribution”) and any Conversion Rate adjustment
required by this Section 14.04(c) with
respect to such Clause C Distribution shall then be made, and
(2) the Clause A Distribution and Clause B Distribution shall
be deemed to immediately follow the Clause C Distribution and any
Conversion Rate adjustment required by Section 14.04(a) and
Section 14.04(b) with
respect thereto shall then be made, except that, if determined by
the Company (I) the “Ex-Dividend Date” of the
Clause A Distribution and the Clause B Distribution shall be deemed
to be the Ex-Dividend Date of the Clause C Distribution and
(II) any shares of Common Stock included in the Clause A
Distribution or Clause B Distribution shall be deemed not to be
“outstanding immediately prior to the open of business on
such Ex-Dividend Date or Effective Date” within the meaning
of Section 14.04(a) or
“outstanding immediately prior to the open of business on
such Ex-Dividend Date” within the meaning of Section 14.04(b).
(d) If
any cash dividend or distribution is made to all or substantially
all holders of the Common Stock, the Conversion Rate shall be
adjusted based on the following formula:
where,
CR0 =
the Conversion Rate in effect immediately prior to the
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 the Company
distributes to all or substantially all holders of the Common
Stock.
Any
increase pursuant to this Section 14.04(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 Board of Directors
determines not to make or pay such dividend or distribution, to be
the Conversion Rate that would then be in effect if such dividend
or distribution had not been declared. Notwithstanding the
foregoing, if “C” (as defined above) is equal to or
greater than “SP0” (as
defined above), in lieu of the foregoing increase, each Holder of a
Note shall receive, for each $1,000 principal amount of Notes such
Holder 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 owned a number of shares of
Common Stock equal to the Conversion Rate in effect on the
Ex-Dividend Date for such cash dividend or
distribution.
(e) If
the Company or any of its Subsidiaries make a payment in respect of
a tender or exchange offer for the Common Stock, to the extent that
the cash and value of any other consideration included in the
payment per share of the Common Stock exceeds the average of the
Last Reported Sale Prices of the Common Stock over the 10
consecutive Trading Day period commencing on, and including, the
Trading Day next succeeding the last date on which tenders or
exchanges may be made pursuant to such tender or exchange offer,
the Conversion Rate shall be increased based on the following
formula:
70
where,
CR0 =
the Conversion Rate in effect immediately prior to the
close of business on the 10th Trading Day immediately following,
and including, the Trading Day next succeeding the date such tender
or exchange offer expires;
CR1
= the Conversion Rate in effect immediately after
the close of business on the 10th Trading Day immediately
following, and including, the Trading Day next succeeding the date
such tender or exchange offer expires;
AC
= the aggregate value of all cash
and any other consideration (as determined by the Board of
Directors) paid or payable for shares of Common Stock purchased in
such tender or exchange offer;
OS0
= the number of shares of Common Stock
outstanding immediately prior to the date such tender or exchange
offer expires (prior to giving effect to the purchase of all shares
of Common Stock accepted for purchase or exchange in such tender or
exchange offer);
OS1
= the number of shares of Common Stock
outstanding immediately after the date such tender or exchange
offer expires (after giving effect to the purchase of all shares of
Common Stock accepted for purchase or exchange in such tender or
exchange offer); and
SP1
= the average of the Last Reported Sale Prices of
the Common Stock over the 10 consecutive Trading Day period
commencing on, and including, the Trading Day next succeeding the
date such tender or exchange offer expires.
The
increase to the Conversion Rate under this Section 14.04(e) shall
occur at the close of business on the 10th Trading Day immediately
following, and including, the Trading Day next succeeding the date
such tender or exchange offer expires; provided that (x) in respect of
any conversion of Notes for which Physical Settlement is
applicable, if the relevant Conversion Date occurs during the 10
Trading Days immediately following, and including, the Trading Day
next succeeding the expiration date of any tender or exchange
offer, references to “10” or “10th” in the
preceding paragraph shall be deemed replaced with such lesser
number of Trading Days as have elapsed between the date that such
tender or exchange offer expires and the 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 Trading Day that falls within the
relevant Observation Period for such conversion and within the 10
Trading Days immediately following, and including, the Trading Day
next succeeding the expiration date of any tender or exchange
offer, references to “10” or “10th” in the
preceding paragraph shall be deemed replaced with such lesser
number of Trading Days as have elapsed between the expiration date
of such tender or exchange offer and such Trading Day in
determining the Conversion Rate as of such Trading
Day.
71
Notwithstanding
this Section 14.04 or any other
provision of this Indenture or the Notes, if a Conversion Rate
adjustment becomes effective on any Ex-Dividend Date, and a Holder
that has converted its Notes on or after such Ex-Dividend Date and
on or prior to the related Record Date would be treated as the
record holder of the shares of Common Stock as of the related
Conversion Date as described under Section 14.02(i) based on
an adjusted Conversion Rate for such Ex-Dividend Date, then,
notwithstanding the Conversion Rate adjustment provisions in this
Section 14.04,
the Conversion Rate adjustment relating to such Ex-Dividend Date
shall not be made for such converting Holder. Instead, such Holder
shall be treated as if such Holder were the record owner of the
shares of Common Stock on an unadjusted basis and participate in
the related dividend, distribution or other event giving rise to
such adjustment.
(f) Except
as stated herein, the Company shall not adjust the Conversion Rate
for the issuance of shares of the Common Stock or any securities
convertible into or exchangeable for shares of the Common Stock or
the right to purchase shares of the Common Stock or such
convertible or exchangeable securities.
(g) In
addition to those adjustments required by clauses (a), (b),
(c), (d) and (e) of this Section 14.04,
and to the extent permitted by applicable law and subject to the
applicable listing standards of The NASDAQ Capital Market, the
Company from time to time may increase the Conversion Rate by any
amount for a period of at least 20 Business Days if the Board of
Directors determines that such increase would be in the
Company’s best interest. In addition, to the extent permitted
by applicable law and subject to the applicable listing standards
of The NASDAQ Capital Market, the Company may (but is not required
to) increase the Conversion Rate to avoid or diminish any income
tax to holders of Common Stock or rights to purchase Common Stock
in connection with a dividend or distribution of shares of Common
Stock (or rights to acquire shares of Common Stock) or similar
event. Whenever the Conversion Rate is increased pursuant to either
of the preceding two sentences, the Company shall deliver to the
Holder of each Note, the Trustee and the Conversion Agent (if other
than the Trustee) a written notice of the increase at least 15 days
prior to the date the increased Conversion Rate takes effect, and
such notice shall state the increased Conversion Rate and the
period during which it will be in effect.
(h) Notwithstanding
anything to the contrary in this Article 14,
the Conversion Rate shall not be adjusted:
(i) upon
the issuance of any shares of Common Stock pursuant to any present
or future plan providing for the reinvestment of dividends or
interest payable on the Company’s securities and the
investment of additional optional amounts in shares of Common Stock
under any plan;
(ii) upon
the issuance of any shares of Common Stock or options or rights to
purchase those shares pursuant to any present or future employee,
director or consultant benefit plan or program of or assumed by the
Company or any of the Company’s Subsidiaries (other than
rights plans described in Section
14.11);
(iii) upon
the issuance of any shares of the Common Stock pursuant to any
option, warrant, right or exercisable, exchangeable or convertible
security not described in clause (ii) of this subsection and
outstanding as of the date the Notes were first
issued;
(iv) solely
for a change in the par value of the Common Stock;
or
72
(v) for
accrued and unpaid interest, if any.
(i) All
calculations and other determinations under this
Article 14
shall be made by the Company and shall
be made to the nearest one-ten thousandth (1/10,000th) of a
share.
(j) Whenever
the Conversion Rate is adjusted as herein provided, the Company
shall promptly deliver to the Trustee (and the Conversion Agent if
not the Trustee) an Officers’ Certificate setting forth the
Conversion Rate after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Unless and until
a Responsible Officer of the Trustee shall have received such
Officers’ Certificate, the Trustee shall not be deemed to
have knowledge of any adjustment of the Conversion Rate and may
assume without inquiry that the last Conversion Rate of which it
has knowledge is still in effect. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment
of the Conversion Rate setting forth the adjusted Conversion Rate
and the date on which each adjustment becomes effective and shall
deliver such notice of such adjustment of the Conversion Rate to
each Holder at its address appearing in the Note Register. Failure
to deliver such notice shall not affect the legality or validity of
any such adjustment. Neither the Trustee nor any Conversion Agent
shall be under any duty or responsibility with respect to any such
certificate or the information and calculations contained
therein.
(k) For
purposes of this Section 14.04,
the number of shares of Common Stock at any time outstanding shall
not include shares of Common Stock held in the treasury of the
Company so long as the Company does not pay any dividend or make
any distribution on shares of Common Stock held in the treasury of
the Company, but shall include shares of Common Stock issuable in
respect of scrip certificates issued in lieu of fractions of shares
of Common Stock.
Section
14.05 Adjustments of
Prices. Whenever any provision of this
Indenture requires the Company to calculate the Last Reported Sale
Prices, the Daily VWAPs, the Daily Conversion Values or the Daily
Settlement Amounts over a span of multiple days (including an
Observation Period and the period for determining the Stock Price
for purposes of a Make-Whole Fundamental Change or Optional
Redemption), the Board of Directors shall make appropriate
adjustments to each to account for any adjustment to the Conversion
Rate that becomes effective, or any event requiring an adjustment
to the Conversion Rate where the Ex-Dividend Date, Effective Date
or expiration date, as the case may be, of the event occurs, at any
time during the period when the Last Reported Sale Prices, the
Daily VWAPs, the Daily Conversion Values or the Daily Settlement
Amounts are to be calculated.
Section
14.06 Shares to Be Fully
Paid. The Company shall provide, free from
preemptive rights, out of its authorized but unissued shares or
shares held in treasury, sufficient shares of Common Stock to
provide for conversion of the Notes from time to time as such Notes
are presented for conversion (assuming delivery of the maximum
number of Additional Shares pursuant to Section 14.03 and that at
the time of computation of such number of shares, all such Notes
would be converted by a single Holder and that Physical Settlement
were applicable).
Section
14.07 Effect of
Recapitalizations, Reclassifications and Changes of the Common
Stock.
(a) In
the case of:
73
(i) any
recapitalization, reclassification or change of the Common Stock
(other than changes resulting from a subdivision or combination or
a change of par value or to no par value),
(ii) any
consolidation, merger, combination or similar transaction involving
the Company,
(iii) any
sale, lease or other transfer to a third party of the consolidated
assets of the Company and the Company’s Subsidiaries
substantially as an entirety or
(iv) any
statutory share exchange,
in each
case, as a result of which the Common Stock would be converted
into, or exchanged for, stock, other securities, other property or
assets (including cash or any combination thereof) (any such event,
a “Share Exchange
Event”), then, at the effective time of the Share
Exchange Event, the Company or the successor or acquiring
corporation, as the case may be, shall execute with the Trustee a
supplemental indenture, without the consent of Holders, providing
that at and after the effective time of such Share Exchange Event,
the right to convert each $1,000 principal amount of Notes shall be
changed into a right to convert such principal amount of Notes into
the kind and amount of shares of stock, other securities or other
property or assets (including cash or any combination thereof) that
a holder of a number of shares of Common Stock equal to the
Conversion Rate immediately prior to such Share Exchange Event
would have owned or been entitled to receive (the
“Reference
Property,” with each “unit of Reference Property”
meaning the kind and amount of Reference Property that a holder of
one share of Common Stock is entitled to receive) upon such Share
Exchange Event and, prior to or at the effective time of such Share
Exchange Event, the Company or the successor or purchasing Person,
as the case may be, shall execute with the Trustee a supplemental
indenture permitted under Section 10.01(g) providing
for such change in the right to convert each $1,000 principal
amount of Notes; provided,
however, that at and after
the effective time of the Share Exchange Event (A) the Company
shall continue to have the right to determine the form of
consideration to be paid or delivered, as the case may be, upon
conversion of Notes in accordance with Section 14.02 and
(B) (I) any amount payable in cash upon conversion of the
Notes in accordance with Section 14.02 shall
continue to be payable in cash, (II) any shares of Common
Stock that the Company would have been required to deliver upon
conversion of the Notes in accordance with Section 14.02 shall
instead be deliverable in the amount and type of Reference Property
that a holder of that number of shares of Common Stock would have
been entitled to receive in such Share Exchange Event and
(III) the Daily VWAP shall be calculated based on the value of
a unit of Reference Property.
If the
Share Exchange Event causes the Common Stock to be converted into,
or exchanged for, the right to receive more than a single type of
consideration (determined based in part upon any form of
stockholder election), then the Reference Property into which the
Notes will be convertible shall be deemed to be the weighted
average of the types and amounts of consideration received by the
holders of Common Stock. If the holders of the Common Stock receive
only cash in such Share Exchange Event, then for all conversions
for which the relevant Conversion Date occurs after the effective
date of such Share Exchange Event (A) the consideration due
upon conversion of each $1,000 principal amount of Notes shall be
solely cash in an amount equal to the Conversion Rate in effect on
the Conversion Date (as may be increased by any Additional Shares
pursuant to Section 14.03),
multiplied by the price
paid per share of Common Stock in such Share Exchange Event, and,
if applicable, an Interest Make-Whole Payment, which the Company
shall pay in cash (B) the Company shall satisfy the Conversion
Obligation by paying cash to converting Holders on the second
Business Day immediately following the relevant Conversion Date.
The Company shall notify Holders, the Trustee and the Conversion
Agent (if other than the Trustee) in writing of such weighted
average of the types and amounts of consideration received by the
holders of the Common Stock as soon as practicable after such
determination is made.
74
Such
supplemental indenture described in the second immediately
preceding paragraph shall provide for anti-dilution and other
adjustments that shall be as nearly equivalent as is possible to
the adjustments provided for in this Article 14. If, in the
case of any Share Exchange Event, the Reference Property includes
shares of stock, securities or other property or assets (including
cash or any combination thereof) of a Person other than the
successor or acquiring corporation, as the case may be, in such
Share Exchange Event, then such supplemental indenture shall also
be executed by such other Person and shall contain such additional
provisions to protect the interests of the Holders of the Notes as
the Board of Directors shall reasonably consider necessary by
reason of the foregoing, including the provisions providing for the
purchase rights set forth in Article 15.
(b) When
the Company executes a supplemental indenture pursuant to
subsection (a) of this Section 14.07,
the Company shall promptly deliver to the Trustee an
Officers’ Certificate briefly stating the reasons therefor,
the kind or amount of cash, securities or property or asset that
will comprise a unit of Reference Property after any such Share
Exchange Event, any adjustment to be made with respect thereto and
that all conditions precedent have been complied with, and shall
promptly deliver notice thereof to all Holders. The Company shall
cause notice of the execution of such supplemental indenture to be
delivered to each Holder within 20 days after execution thereof.
Failure to deliver such notice shall not affect the legality or
validity of such supplemental indenture.
(c) The
Company shall not become a party to any Share Exchange Event unless
its terms are consistent with this Section 14.07.
None of the foregoing provisions shall affect the right of a holder
of Notes to convert its Notes into cash, shares of Common Stock or
a combination of cash and shares of Common Stock, as applicable, as
set forth in Section 14.01
and Section 14.02
prior to the effective date of such
Share Exchange Event.
(d) The
above provisions of this Section shall similarly apply to
successive Share Exchange Events.
Section
14.08
Certain
Covenants. (a) The Company covenants that all
shares of Common Stock issued upon conversion of Notes will be
fully paid and non-assessable by the Company and free from all
taxes, liens and charges with respect to the issue
thereof.
(b) The
Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Notes hereunder require
registration with or approval of any governmental authority under
any federal or state law before such shares of Common Stock may be
validly issued upon conversion, the Company will, to the extent
then permitted by the rules and interpretations of the Commission,
secure such registration or approval, as the case may
be.
(c) The
Company further covenants that if at any time the Common Stock
shall be listed on any national securities exchange or automated
quotation system the Company will list and keep listed, so long as
the Common Stock shall be so listed on such exchange or automated
quotation system, any Common Stock issuable upon conversion of the
Notes.
75
Section
14.09
Responsibility of
Trustee. The Trustee and any other Conversion
Agent shall not at any time be under any duty or responsibility to
any Holder to determine the Conversion Rate (or any adjustment
thereto) or whether any facts exist that may require any adjustment
(including any increase) of the Conversion Rate, or with respect to
the nature or extent or calculation of any such adjustment when
made, or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same.
The Trustee and any other Conversion Agent shall not be accountable
with respect to the validity or value (or the kind or amount) of
any shares of Common Stock, or of any securities, property or cash
that may at any time be issued or delivered upon the conversion of
any Note; and the Trustee and any other Conversion Agent make no
representations with respect thereto. Neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock or
stock certificates or other securities or property or cash upon the
surrender of any Note for the purpose of conversion, the accuracy
or inaccuracy of any mathematical calculation or formulae under
this Indenture, whether by the Company or any Person so authorized
by the Company for such purpose under this Indenture or the failure
by the Company or to comply with any of the duties,
responsibilities or covenants of the Company contained in this
Article. Without limiting the generality of the foregoing, neither
the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to
Section 14.07
relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by Holders upon
the conversion of their Notes after any event referred to in such
Section 14.07
or to any adjustment to be made with respect thereto, but, subject
to the provisions of Section 7.01, may accept
(without any independent investigation) as conclusive evidence of
the correctness of any such provisions, and shall be protected in
relying upon, the Officers’ Certificate and Opinion of
Counsel (which the Company shall be obligated to deliver to the
Trustee prior to the execution of any such supplemental indenture)
with respect thereto. Neither the Trustee nor the Conversion Agent
shall be responsible for determining whether any event contemplated
by Section 14.01(b) has
occurred that makes the Notes eligible for conversion or no longer
eligible therefor until the Company has delivered to the Trustee
and the Conversion Agent the notices referred to in Section 14.01(b) with
respect to the commencement or termination of such conversion
rights, on which notices the Trustee and the Conversion Agent may
conclusively rely, and the Company agrees to deliver such notices
to the Trustee and the Conversion Agent immediately after the
occurrence of any such event or at such other times as shall be
provided for in Section 14.01(b). Except
as otherwise expressly provided herein, neither the Trustee nor any
other agent acting under this Indenture (other than the Company, if
acting in such capacity) shall have any obligation to make any
calculation or to determine whether the Notes may be surrendered
for conversion pursuant to this Indenture, or to notify the Company
or the Depositary or any of the Holders if the Notes have become
convertible pursuant to the terms of this Indenture.
Section
14.10
Notice to Holders
Prior to Certain Actions. In case of
any:
(a) action
by the Company or one of its Subsidiaries that would require an
adjustment in the Conversion Rate pursuant to Section 14.04
or Section 14.11;
(b) Share
Exchange Event; or
(c) voluntary
or involuntary dissolution, liquidation or winding-up of the
Company or any of its Subsidiaries;
76
then,
in each case (unless notice of such event is otherwise required
pursuant to another provision of this Indenture), the Company shall
cause to be delivered to the Trustee and the Conversion Agent (if
other than the Trustee) and to be delivered to each Holder at its
address appearing on the Note Register, as promptly as possible but
in any event at least 20 days prior to the applicable date
hereinafter specified, a notice stating (i) the date on which
a record is to be taken for the purpose of such action by the
Company or one of its Subsidiaries or, if a record is not to be
taken, the date as of which the holders of Common Stock of record
are to be determined for the purposes of such action by the Company
or one of its Subsidiaries, or (ii) the date on which such
Share Exchange Event, dissolution, liquidation or winding-up is
expected to become effective or occur, and 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 Share Exchange Event, dissolution,
liquidation or winding-up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such
action by the Company or one of its Subsidiaries, Share Exchange
Event, dissolution, liquidation or winding-up.
Section
14.11
Stockholder Rights
Plans. If the Company has a stockholder
rights plan in effect upon conversion of the Notes, each share of
Common Stock, if any, issued upon such conversion shall be entitled
to receive the appropriate number of rights, if any, and the
certificates representing the Common Stock issued upon such
conversion shall bear such legends, if any, in each case as may be
provided by the terms of any such stockholder rights plan, as the
same may be amended from time to time. The Company shall not adjust
the Conversion Rate upon the adoption of a stockholder rights plan,
so long as the rights are not currently exercisable and have not
separated from the shares of Common Stock in accordance with the
provisions of the applicable rights plan. However, if, prior to any
conversion of Notes, the rights have separated from the shares of
Common Stock in accordance with the provisions of the applicable
stockholder rights plan, the Conversion Rate shall be adjusted at
the time of separation as if the Company distributed to all or
substantially all holders of the Common Stock Distributed Property
as provided in Section 14.04(c), subject
to readjustment in the event of the expiration, termination or
redemption of such rights.
Section
14.12
Ownership
Limitation. Notwithstanding anything herein to
the contrary, no Holder (other than the Depositary with respect to
the Notes) or beneficial owner of a Note shall have the right to
receive shares of Common stock upon Conversion, and any purported
delivery of shares of Common Stock to such Holder or beneficial
owner, shall be null and void, to the extent that, following
receipt of such shares of Common Stock, such Holder or beneficial
owner (together with such Holder’s Affiliates and any other
persons whose beneficial ownership of Common Stock would be
aggregated with the Holder’s for purposes of Section 13(d) of
the Exchange Act and the rules promulgated thereunder, including
any “group” of which such holder is a member) would be
the beneficial owner of more than 4.99% of the outstanding shares
of Common Stock. For the avoidance of doubt, if a Holder or
beneficial owner is prevented from receiving any shares of Common
Stock to which it would otherwise be entitled pursuant to this
Section 14.12, the
Company’s obligation to deliver such shares of Common Stock
shall not be extinguished, and the Company shall deliver such
shares of Common Stock (or any designated portion thereof) within
two Business Days following written notice from the converting
Holder or beneficial owner that receipt of such shares of Common
Stock (or any designated portion thereof) would not be prohibited
by this sentence (this sentence being referred to as the
“Ownership
Limitation”); provided, however, that the Ownership
Limitation shall not apply in connection with and subject to
completion of a third party tender offer for the Common Stock
issuable thereupon. The provisions of this Section 14.12 may be construed
and implemented by the Company in a manner that is otherwise than
in strict conformity with the terms of this Section 14.12 in order to
correct this Section
14.12 (or any portion hereof) which may be defective or
inconsistent with the intended ownership limitation herein
contained or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations
contained in this Section
14.12 shall apply to a successor Holder of Notes. The
Trustee (including in its capacities as Note Registrar, Paying
Agent and, if applicable, Conversion Agent) shall have no
responsibility for construing or implementing the provisions of
this Section 14.12
or for determining whether any Holder or beneficial owner of a Note
would upon conversion be prevented from receiving any shares of
Common Stock as a result of this Section 14.12.
77
ARTICLE 15
REPURCHASE OF NOTES
AT OPTION OF HOLDERS
Section
15.01
[Intentionally
Omitted].
Section
15.02
Repurchase
at Option of Holders Upon a Fundamental
Change. (a) If a Fundamental Change occurs at
any time, each Holder shall have the right, at such Holder’s
option, to require the Company to repurchase for cash all of such
Holder’s Notes, or any portion thereof that is equal to
$1,000 or an integral multiple of $1,000, on the date (the
“Fundamental Change
Repurchase Date”) specified by the Company that is not
less than 20 calendar days or more than 35 calendar days following
the date of the Fundamental Change Company Notice at a repurchase
price equal to 100% of the principal amount thereof, plus accrued and unpaid interest
thereon to, but excluding, the relevant Fundamental Change
Repurchase Date (the “Fundamental Change Repurchase
Price”), unless the Fundamental Change Repurchase Date
falls after a Regular Record Date but on or prior to the Interest
Payment Date to which such Regular Record Date relates, in which
case the Company shall instead pay the full amount of accrued and
unpaid interest to Holders of record as of such Regular Record Date
on such Interest Payment Date, and the Fundamental Change
Repurchase Price shall be equal to 100% of the principal amount of
Notes to be repurchased pursuant to this Article 15.
(b) Repurchases
of Notes under this Section 15.02
shall be made, at the option of the
Holder thereof, upon:
(i) delivery
to the Paying Agent by a 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,
if the Notes are Physical Notes, or in compliance with the
Depositary’s procedures for surrendering interests in Global
Notes, if the Notes are Global Notes, in each case on or before the
close of business on the Business Day immediately preceding the
Fundamental Change Repurchase Date; and
(ii) delivery
of the Notes, if the Notes are Physical Notes, to the Paying Agent
at any time after delivery of the Fundamental Change Repurchase
Notice (together with all necessary endorsements for transfer) at
the Corporate Trust Office of the Paying Agent located in the
contiguous United States as notified by the Company, as the case
may be, or book-entry transfer of the Notes, if the Notes are
Global Notes, in compliance with the procedures of the Depositary,
in each case such delivery being a condition to receipt by the
Holder of the Fundamental Change Repurchase Price
therefor.
78
The
Fundamental Change Repurchase Notice in respect of any Notes to be
repurchased shall state:
(iii) in
the case of Physical Notes, the certificate numbers of the Notes to
be delivered for repurchase;
(iv) the
portion of the principal amount of Notes to be repurchased, which
must be $1,000 or an integral multiple thereof;
and
(v) that
the Notes are to be repurchased by the Company pursuant to the
applicable provisions of the Notes and this
Indenture;
provided, however,
that if the Notes are Global Notes, the Fundamental Change
Repurchase Notice must comply with appropriate Depositary
procedures.
Notwithstanding
anything herein to the contrary, any Holder delivering to the
Paying Agent, the Fundamental Change Repurchase Notice contemplated
by this Section 15.02 shall have
the right to withdraw, in whole or in part, such Fundamental Change
Repurchase Notice at any time prior to the close of business on the
Business Day immediately preceding the Fundamental Change
Repurchase Date by delivery of a written notice of withdrawal to
the Paying Agent in accordance with Section 15.03.
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.
(c) On
or before the 20th calendar day after the occurrence of the
effective date of a Fundamental Change, the Company shall provide
to all Holders of Notes and the Trustee, the Paying Agent (if other
than the Trustee) and the Conversion Agent (if other than the
Trustee) a written notice (the “Fundamental Change Company
Notice”) of the
occurrence of the effective date of the Fundamental Change and of
the repurchase right at the option of the Holders arising as a
result thereof. In the case of Physical Notes, such notice shall be
by first class mail or, in the case of Global Notes, such notice
shall be delivered in accordance with the applicable procedures of
the Depositary. Simultaneously with providing such notice, the
Company shall publish a notice containing the information set forth
in the Fundamental Change Company Notice in a newspaper of general
circulation in The City of New York or publish such information on
the Company’s website or through such other public medium as
the Company may use at that time. Each Fundamental Change Company
Notice shall specify:
(i) the
events causing the Fundamental Change;
(ii) the
date of the Fundamental Change;
(iii) the
last date on which a Holder may exercise the repurchase right
pursuant to this Article 15;
(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;
79
(vii) if
applicable, the Conversion Rate and any adjustments to the
Conversion Rate;
(viii) that
the Notes with respect to which a Fundamental Change Repurchase
Notice has been delivered by a Holder may be converted only if the
Holder withdraws the Fundamental Change Repurchase Notice in
accordance with the terms of this Indenture;
and
(ix) the
procedures that Holders must follow to require the Company to
repurchase their Notes.
No
failure of the Company to give the foregoing notices and no defect
therein shall limit the Holders’ repurchase rights or affect
the validity of the proceedings for the repurchase of the Notes
pursuant to this Section 15.02.
At the
Company’s request, the Paying Agent 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 and delivered to the Paying Agent no later than two (2)
Business Days (or such shorter period as is acceptable to the
Paying Agent) prior to the date the Fundamental Change Company
Notice is to be sent.
(d) Notwithstanding
the foregoing, no Notes may be repurchased by the Company on any
date at the option of the Holders upon a Fundamental Change if the
principal amount of the Notes has been accelerated, and such
acceleration has not been rescinded, on or prior to such date
(except in the case of an acceleration resulting from a Default by
the Company in the payment of the Fundamental Change Repurchase
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), or any instructions for book-entry transfer of the Notes in
compliance with the procedures of the Depositary shall be deemed to
have been cancelled, and, upon such return or cancellation, as the
case may be, the Fundamental Change Repurchase Notice with respect
thereto shall be deemed to have been withdrawn.
Section
15.03 Withdrawal of
Fundamental Change Repurchase Notice. (a) 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 located in the
contiguous United States as notified to Holders and the Trustee in
accordance with this Section 15.03 at any time
prior to the close of business on the Business Day immediately
preceding the Fundamental Change Repurchase Date,
specifying:
(i) the
principal amount of the Notes with respect to which such notice of
withdrawal is being submitted, which must be $1,000 or an integral
multiple thereof,
(ii) if
Physical Notes have been issued, the certificate number of the Note
in respect of which such notice of withdrawal is being submitted,
and
(iii) the
principal amount, if any, of such Note that remains subject to the
original Fundamental Change Repurchase Notice, which portion must
be in a minimum principal amount of $1,000 or an integral multiple
of $1,000;
provided, however,
that if the Notes are Global Notes, the notice must comply with
appropriate procedures of the Depositary.
80
Section
15.04 Deposit of Fundamental
Change Repurchase Price. (a) The Company will deposit with the
Trustee (or other Paying Agent appointed by the Company, or if the
Company is acting as its own Paying Agent, set aside, segregate and
hold in trust as provided in Section 4.04) on or prior
to 11:00 a.m., New York City time, on the Fundamental
Change Repurchase Date an amount of money sufficient to repurchase
all of the Notes to be repurchased at the appropriate Fundamental
Change Repurchase Price. Subject to receipt of funds and/or Notes
by the Trustee (or other Paying Agent appointed by the Company),
payment for Notes surrendered for repurchase (and not withdrawn
prior to the close of business on the Business Day immediately
preceding the Fundamental Change Repurchase Date) will be made on
the later of (i) the Fundamental Change Repurchase Date
(provided the Holder has
satisfied the conditions in Section 15.02) and
(ii) the time of book-entry transfer or the delivery of such
Note to the Trustee (or other Paying Agent appointed by the
Company) by the Holder thereof in the manner required by
Section 15.02
by mailing checks for the amount payable to the Holders of such
Notes entitled thereto as they shall appear in the Note Register;
provided, however, that payments to the
Depositary shall be made by wire transfer of immediately available
funds to the account of the Depositary or its nominee. The Trustee
or Paying Agent shall, promptly after such payment and upon written
demand by the Company, return to the Company any funds in excess of
the Fundamental Change Repurchase Price.
(b) If
by 11:00 a.m. New York City time, on the Fundamental Change
Repurchase Date, the Trustee (or other Paying Agent appointed by
the Company) holds money sufficient to make payment on all the
Notes or portions thereof that are to be repurchased on such
Fundamental Change Repurchase Date, then, with respect to the Notes
that have been properly surrendered for repurchase to the Paying
Agent and have not been validly withdrawn, (i) such Notes will
cease to be outstanding, (ii) interest will cease to accrue on
such Notes (whether or not book-entry transfer of the Notes has
been made or the Notes have been delivered to the Trustee or Paying
Agent) and (iii) all other rights of the Holders of such Notes
will terminate (other than the right to receive the Fundamental
Change Repurchase Price and, if applicable, accrued and unpaid
interest).
(c) Upon
surrender of a Physical Note that is to be repurchased in part
pursuant to Section 15.02,
the Company shall execute and the Trustee shall authenticate and
deliver to the Holder a new Physical Note in an authorized
denomination equal in principal amount to the unrepurchased portion
of the Physical Note surrendered.
Section
15.05
Covenant
to Comply with Applicable Laws Upon Repurchase of
Notes. In connection
with any repurchase offer, the Company will, if
required:
(a) comply
with the provisions of Rule 13e-4, Rule 14e-1 and any
other tender offer rules under the Exchange
Act;
(b) file
a Schedule TO or any other required schedule under the
Exchange Act; and
(c) otherwise
comply with all federal and state securities laws in connection
with any offer by the Company to repurchase the
Notes;
in each
case, so as to permit the rights and obligations under this
Article 15 to
be exercised in the time and in the manner specified in this
Article 15.
81
ARTICLE 16
OPTIONAL
REDEMPTION
Section
16.01
Optional
Redemption. No sinking fund
is provided for the Notes. The Notes shall not be redeemable by the
Company prior to January 14, 2023.1 On or after January 14,
2023, the Company may
redeem (an “Optional
Redemption”) for cash all or any portion of the Notes,
at the Redemption Price, if the Last Reported Sale Price of the
Common Stock has been at least 130% of the Conversion Price then in
effect for at least 20 Trading Days (whether or not consecutive),
including the Trading Day immediately preceding the date on which
the Company provides the relevant Redemption Notice, during any 30
consecutive Trading Day period ending on, and including, the
Trading Day immediately preceding the date on which the Company
provides the Redemption Notice in accordance with Section 16.02.
Section
16.02
Notice of
Optional Redemption; Selection of Notes. (a) In case the
Company exercises its Optional Redemption right to redeem all or,
as the case may be, any part of the Notes pursuant to Section 16.01, it shall
fix a date for redemption (each, a “Redemption Date”) and it or, at
its written request received by the Trustee not less than five
Business Days prior to the date the Redemption Notice is to be
delivered to the Holders (or such shorter period of time as may be
acceptable to the Trustee), the Trustee, in the name of and at the
expense of the Company, shall deliver or cause to be delivered a
notice of such Optional Redemption (a “Redemption Notice”) not less than
50 nor more than 65 Scheduled Trading Days prior to the Redemption
Date to each Holder of Notes so to be redeemed as a whole or in
part; provided,
however, that, if the
Company shall give such notice, it shall also give written notice
of the Redemption Date to the Trustee. The Redemption Date must be
a Business Day. The Company shall not specify a Redemption Date
that falls on or after July 1, 2024.
(b) 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.
(c) Each
Redemption Notice shall specify:
(i) the
Redemption Date;
(ii) the
Redemption Price;
(iii) that
on the Redemption Date, the Redemption Price will become due and
payable upon each Note to be redeemed, and that interest thereon,
if any, shall cease to accrue on and after the Redemption
Date;
(iv) the
place or places where such Notes are to be surrendered for payment
of the Redemption Price;
82
(v) that
Holders may surrender their Notes for conversion at any time prior
to the close of business on the Scheduled Trading Day immediately
preceding the Redemption Date (unless the Company fails to pay the
Redemption Price, in which case a Holder may convert such Notes
until the Business Day immediately preceding the date on which the
Redemption Price has been paid or duly provided
for);
(vi) the
procedures a converting Holder must follow to convert its Notes and
the Settlement Method and Specified Cash Amount, if
applicable;
(vii) the
Conversion Rate and, if applicable, the number of Additional Shares
added to the Conversion Rate in accordance with Section 14.03;
(viii) the
CUSIP, ISIN or other similar numbers, if any, assigned to such
Notes; and
(ix) in
case any Note is to be redeemed in part only, the portion of the
principal amount thereof to be redeemed and on and after the
Redemption Date, upon surrender of such Note, a new Note in
principal amount equal to the unredeemed portion thereof shall be
issued.
A
Redemption Notice shall be irrevocable.
If fewer than all of the outstanding Notes are to be redeemed, the
Notes to be redeemed will be selected according to the applicable
procedures of the Depositary, in the case of Notes represented by a
Global Note, or, in the case of Physical Notes, the Trustee shall
select, pro rata or by lot in such other manner as it shall deem
appropriate and fair, Notes to be redeemed in whole or in part. If
any Note selected for partial redemption is submitted for
conversion in part after such selection, the portion of the Note
submitted for conversion shall be deemed (so far as may be
possible) to be the portion selected for redemption.
Section
16.03
Payment of
Notes Called for Redemption. (a) If any
Redemption Notice has been given in respect of the Notes in
accordance with Section 16.02, 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.
(b) Prior
to the open of business on the Redemption Date, the Company shall
deposit with the Paying Agent or, if the Company or a Subsidiary of
the Company is acting as the Paying Agent, shall segregate and hold
in trust as provided in Section 7.05
an amount of cash (in immediately
available funds if deposited on the Redemption Date), sufficient to
pay the Redemption Price of all of the Notes to be redeemed on such
Redemption Date. Subject to receipt of funds by the Paying Agent,
payment for the Notes to be redeemed shall be made on the
Redemption Date for such Notes. 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
16.04
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 (except in the case of an acceleration
resulting from a Default by the Company in the payment of the
Redemption Price with respect to such Notes).
83
ARTICLE 17
MISCELLANEOUS
PROVISIONS
Section
17.01
Provisions
Binding on Company’s Successors. All the covenants, stipulations,
promises and agreements of the Company contained in this Indenture
shall bind its successors and assigns whether so expressed or
not.
Section
17.02
Official
Acts by Successor Corporation. Any act or proceeding by any
provision of this Indenture authorized or required to be done or
performed by any board, committee or Officer of the Company shall
and may be done and performed with like force and effect by the
like board, committee or officer of any corporation or other entity
that shall at the time be the lawful sole successor of the
Company.
Section
17.03
Addresses
for Notices, Etc. Any notice or
demand that by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the Holders on
the Company shall be deemed to have been sufficiently given or
made, for all purposes if given or served by being deposited
postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company
with the Trustee) to RumbleOn, Inc., 901 West Walnut Hill Lane,
Irving, Texas 75038, Attention: General Counsel. Any notice,
direction, request or demand hereunder to the Trustee by any Holder
or by the Company shall be sufficient for every purpose hereunder
if made, given, furnished or filed in writing and delivered in
person or by first-class mail (registered or certified, return
receipt requested), facsimile transmission (confirmed by delivery
in Person or by first-class mail (registered or certified, return
receipt requested)) or guaranteed overnight courier at the
Corporate Trust Office, or such other means reasonably acceptable
to the Trustee (it being agreed that such notice to the Trustee
shall be deemed to have been sufficiently given or made, for all
purposes, if it is in writing and actually received by the
Trustee).
The
Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or
communications.
Any
notice or communication delivered or to be delivered to a Holder of
Physical Notes shall be sent to each Holder at its address as it
appears on the Note Register and shall be sufficiently given to it
if so sent within the time prescribed. Any notice or communication
delivered or to be delivered to a Holder of Global Notes shall be
delivered in accordance with the applicable procedures of the
Depositary and shall be sufficiently given to it if so delivered
within the time prescribed.
Failure
to mail or deliver a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other
Holders. If a notice or communication is sent or delivered, as the
case may be, in the manner provided above, it is duly given,
whether or not the addressee receives it.
Section
17.04
Governing
Law; Jurisdiction. THIS INDENTURE AND EACH NOTE, AND ANY
CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS
INDENTURE AND EACH NOTE, SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO THE CONFLICTS OF LAWS PROVISIONS THEREOF).
84
The
Company irrevocably consents and agrees, for the benefit of the
Holders from time to time of the Notes and the Trustee, that any
legal action, suit or proceeding against it with respect to
obligations, liabilities or any other matter arising out of or in
connection with this Indenture or the Notes may be brought in the
courts of the State of New York or the courts of the United
States located in the Borough of Manhattan, New York City,
New York and, until amounts due and to become due in respect
of the Notes have been paid, hereby irrevocably consents and
submits to the non-exclusive jurisdiction of each such court
in personam, generally and
unconditionally with respect to any action, suit or proceeding for
itself in respect of its properties, assets and
revenues.
The
Company irrevocably and unconditionally waives, to the fullest
extent permitted by law, any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid
actions, suits or proceedings arising out of or in connection with
this Indenture brought in the courts of the State of New York
or the courts of the United States located in the Borough of
Manhattan, New York City, New York and hereby further
irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient
forum.
Section
17.05
Evidence
of Compliance with Conditions Precedent; Certificates and Opinions
of Counsel to Trustee. Upon any application or demand by the
Company to the Trustee to take any action under any of the
provisions of this Indenture, the Trustee shall be entitled to
receive: (a) an Officers’ Certificate stating that, in
the opinion of the signers, all conditions precedent (including any
covenants, compliance with which constitutes a condition
precedent), if any, provided for in this Indenture relating to the
proposed action have been complied with; and (b) an Opinion of
Counsel stating that, in the opinion of such counsel, all such
conditions precedent (including any covenants, compliance with
which constitutes a condition precedent) have been complied
with.
Each
Officers’ Certificate and Opinion of Counsel provided for, by
or on behalf of the Company in this Indenture and delivered to the
Trustee with respect to compliance with this Indenture (other than
the Officers’ Certificates provided for in Section 4.08) shall
include (a) a statement that the person signing such
certificate is familiar with the requested action and this
Indenture; (b) a brief statement as to the nature and scope of
the examination or investigation upon which the statement contained
in such certificate is based; (c) a statement that, in the
judgment of such person, he or she has made such examination or
investigation as is necessary to enable him or her to express an
informed judgment as to whether or not such action is permitted by
this Indenture and as to whether all conditions precedent
(including any covenants, compliance with which constitutes a
condition precedent), if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(d) a statement as to whether or not, in the judgment of such
person, such action is permitted by this Indenture and all such
conditions precedent (including any covenants, compliance with
which constitutes a condition precedent) have been complied
with.
Section
17.06
Legal
Holidays. In any case where any Interest
Payment Date, any Redemption Date, any Fundamental Change
Repurchase Date or the Maturity Date is not a Business Day, then
any action to be taken on such date need not be taken on such date,
but may be taken on the next succeeding Business Day with the same
force and effect as if taken on such date, and no interest shall
accrue in respect of the delay.
85
Section
17.07
No
Security Interest Created. Nothing in this Indenture or in the
Notes, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect, in any
jurisdiction.
Section
17.08
Benefits
of Indenture. Nothing in this Indenture or in the
Notes, expressed or implied, shall give to any Person, other than
the Holders, the parties hereto, any Paying Agent, any Conversion
Agent, any authenticating agent, any Note Registrar and their
successors hereunder, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section
17.09
Table of
Contents, Headings, Etc. The table of
contents and the titles and headings of the articles and sections
of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions
hereof.
Section
17.10
Authenticating
Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf
and subject to its direction in the authentication and delivery of
Notes in connection with the original issuance thereof and
transfers and exchanges of Notes hereunder, including under
Section 2.04,
Section 2.05,
Section 2.06,
Section 2.07,
Section 10.04
and Section 15.04 as fully to
all intents and purposes as though the authenticating agent had
been expressly authorized by this Indenture and those Sections to
authenticate and deliver Notes. For all purposes of this Indenture,
the authentication and delivery of Notes by the authenticating
agent shall be deemed to be authentication and delivery of such
Notes “by the Trustee” and a certificate of
authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement
hereunder or in the Notes for the Trustee’s certificate of
authentication. Such authenticating agent shall at all times be a
Person eligible to serve as trustee hereunder pursuant to
Section 7.08.
Any
corporation or other entity into which any authenticating agent may
be merged or converted or with which it may be consolidated, or any
corporation or other entity resulting from any merger,
consolidation or conversion to which any authenticating agent shall
be a party, or any corporation or other entity succeeding to the
corporate trust business of any authenticating agent, shall be the
successor of the authenticating agent hereunder, if such successor
corporation or other entity is otherwise eligible under this
Section 17.10,
without the execution or filing of any paper or any further act on
the part of the parties hereto or the authenticating agent or such
successor corporation or other entity.
Any
authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The
Trustee may at any time terminate the agency of any authenticating
agent by giving written notice of termination to such
authenticating agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any
time any authenticating agent shall cease to be eligible under this
Section, the Trustee may appoint a successor authenticating agent
(which may be the Trustee), shall give written notice of such
appointment to the Company and shall deliver notice of such
appointment to all Holders.
The
Company agrees to pay to the authenticating agent from time to time
compensation for its services as agreed to in writing
..
86
The
provisions of Article 7
and Section 8.03 and this
Section 17.10
shall be applicable to any authenticating agent.
If an
authenticating agent is appointed pursuant to this Section 17.10, the Notes
may have endorsed thereon, in addition to the Trustee’s
certificate of authentication, an alternative certificate of
authentication in the following form:
as
Authenticating Agent, certifies that this is one
of the
Notes described in the within-named
Indenture.
By:
Authorized
Officer
Section
17.11
Execution
in Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same
instrument. The exchange of copies of this Indenture and of
signature pages by facsimile or PDF transmission shall constitute
effective execution and delivery of this Indenture as to the
parties hereto and may be used in lieu of the original Indenture
for all purposes. Signatures of the parties hereto transmitted by
facsimile or PDF shall be deemed to be their original signatures
for all purposes.
Section
17.12
Severability.
In the event any provision of this Indenture or in the Notes shall
be invalid, illegal or unenforceable, then (to the extent permitted
by law) the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or
impaired.
Section
17.13
Waiver of
Jury Trial. EACH OF THE COMPANY AND THE TRUSTEE
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section
17.14
Force
Majeure. In no event shall the Trustee (in any
of its capacities hereunder) be responsible or liable for any
failure or delay in the performance of its obligations hereunder
arising out of or caused by, directly or indirectly, forces beyond
its control, including, without limitation, strikes, work
stoppages, accidents, acts of war or terrorism, civil or military
disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or
computer (software and hardware) services; it being understood that
the Trustee shall use reasonable efforts that are consistent with
accepted practices in the banking industry to resume performance as
soon as practicable under the circumstances.
Section
17.15
Calculations.
Except as otherwise provided herein, the Company shall be
responsible for making all calculations called for under the Notes.
These calculations include, but are not limited to, determinations
of the Last Reported Sale Prices of the Common Stock, the Daily
VWAPs, the Daily Conversion Values, the Daily Settlement Amounts,
accrued interest payable on the Notes, any Interest Make-Whole
Payment, the Conversion Rate of the Notes and Defaulted Amounts.
The Company shall make all these calculations in good faith and,
absent manifest error, the Company’s calculations shall be
final and binding on Holders of Notes. The Company shall provide a
schedule of its calculations to each of the Trustee, the Paying
Agent and the Conversion Agent, and each of the Trustee, the Paying
Agent and Conversion Agent is entitled to rely conclusively and
without liability upon the accuracy of the Company’s
calculations without independent verification. The Trustee will
forward the Company’s calculations to any registered Holder
of Notes upon the request of that Holder at the sole cost and
expense of the Company. The Trustee, the Paying Agent and any other
Conversion Agent, and their respective agents, shall not be under
any duty or responsibility to monitor the accuracy of any
calculation made by the Company.
Section
17.16
USA
PATRIOT Act. The parties hereto acknowledge that
in accordance with Section 326 of the USA PATRIOT Act, the
Trustee, like all financial institutions and in order to help fight
the funding of terrorism and money laundering, is required to
obtain, verify, and record information that identifies each person
or legal entity that establishes a relationship or opens an account
with the Trustee. The parties to this Indenture agree that they
will provide the Trustee with such information as it may request in
order for the Trustee to satisfy the requirements of the USA
PATRIOT Act.
[Remainder
of page intentionally left blank]
87
IN WITNESS WHEREOF, the parties hereto
have caused this Indenture to be duly executed as of the date first
written above.
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RUMBLEON,
INC.
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By:
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/s/ Steven R.
Berrard
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Steven R.
Berrard
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Chief Financial
Officer
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WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
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By:
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/s/ Sarah
Vilhauer
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Name: Sarah
Vilhauer
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Title: Banking
Officer
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[Signature
Page to Indenture]
EXHIBIT A
[FORM
OF FACE OF NOTE]
[INCLUDE
FOLLOWING LEGEND IF A GLOBAL NOTE]
[UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
(“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREUNDER IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.]
[INCLUDE
FOLLOWING LEGEND IF A RESTRICTED SECURITY]
[THIS
SECURITY AND THE CLASS B 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 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 RUMBLEON, INC. (THE “COMPANY”) THAT
IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY
OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT:
(A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT
TO, AND IN ACCORDANCE WITH A REGISTRATION STATEMENT THAT IS
EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER,
OR
(C) TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, OR
(D) PURSUANT
TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
PRIOR
TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH
CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE
RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS,
CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN
ORDER FOR THE COMPANY TO DETERMINE THAT THE PROPOSED TRANSFER IS
BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE
AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT.]
A-1
RumbleOn,
Inc.
6.75%
Convertible Senior Note due 2025
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No. [
]
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[Initially]2
$[ ]
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CUSIP
No. [ ]
RumbleOn, Inc., a
corporation duly organized and validly existing under the laws of
the State of Delaware (the “Company,” which term includes any
successor corporation or other entity under the Indenture referred
to on the reverse hereof), for value received hereby promises to
pay to [CEDE & CO.]3 [ ]4, or registered assigns, the principal
sum [as set forth in the “Schedule of Exchanges of
Notes” attached hereto]5 [of $[ ]]6, which amount, taken together with the
principal amounts of all other outstanding Notes, shall not exceed
$[38,750,000] in aggregate
at any time, in accordance with the rules and procedures of the
Depositary, on January 1, 2025, and interest thereon as set
forth below.
This
Note shall bear interest at the rate of 6.75% per year from, and
including, January 14, 2020, or from, and including, the most
recent date to which interest had been paid or provided for to, but
excluding, the next scheduled Interest Payment Date until
January 1, 2025. Interest is payable semi-annually in arrears
on each January 1 and July 1, commencing on July 1,
2020, to Holders of record at the close of business on the
preceding December 15 and June 15 (whether or not such
day is a Business Day), respectively. Additional Interest will be
payable as set forth in Section 4.06(d) and
Section 6.03
of the within-mentioned Indenture, and pursuant to the Registration
Rights Agreement, and any reference to interest on, or in respect
of, any Note therein shall be deemed to include Additional Interest
if, in such context, Additional Interest is, was or would be
payable pursuant to any of such Section 4.06(d) or
Section 6.03,
or the Registration Rights Agreement, and any express mention of
the payment of Additional Interest in any provision therein shall
not be construed as excluding Additional Interest in those
provisions thereof where such express mention is not
made.
Any
Defaulted Amounts shall accrue interest per annum at the rate borne
by the Notes, subject to the enforceability thereof under
applicable law, from, and including, the relevant payment date to,
but excluding, the date on which such Defaulted Amounts shall have
been paid by the Company, at its election, in accordance with
Section 2.03(c) of the
Indenture.
The
Company shall pay the principal of and interest on this Note, if
and so long as such Note is a Global Note, by wire transfer in
immediately available funds to the Depositary or its nominee, as
the case may be, as the registered Holder of such Note. As provided
in and subject to the provisions of the Indenture, the Company,
through the Paying Agent, shall pay the principal of any Notes
(other than Notes that are Global Notes) at the office or agency
designated by the Company for that purpose. The Company has
initially designated the Trustee as its Paying Agent, Note
Registrar, Custodian and Conversion Agent in respect of the Notes
and the Corporate Trust Office as a place where Notes may be
presented for payment or for registration of transfer and
exchange.
A-2
Reference is made
to the further provisions of this Note set forth on the reverse
hereof, including, without limitation, provisions giving the Holder
of this Note the right to convert this Note into cash, shares of
Common Stock or a combination of cash and shares of Common Stock,
as applicable, on the terms and subject to the limitations set
forth in the Indenture. Such further provisions shall for all
purposes have the same effect as though fully set forth at this
place.
This
Note, and any claim, controversy or dispute arising under or
related to this Note, shall be construed in accordance with and
governed by the laws of the State of New York (without regard to
the conflicts of laws provisions thereof).
In the
case of any conflict between this Note and the Indenture, the
provisions of the Indenture shall control and govern.
This
Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been signed
manually by the Trustee or a duly authorized authenticating agent
under the Indenture.
[Remainder
of page intentionally left blank]
A-3
IN WITNESS WHEREOF, the Company has
caused this Note to be duly executed.
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RUMBLEON,
INC.
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By:
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Name:
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Title:
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Dated:
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
WILMINGTON TRUST, NATIONAL ASSOCIATION
as
Trustee, certifies that this is
one of
the Notes described in the within-named
Indenture.
By:
__________________________________
Authorized
signatory
A-4
[FORM
OF REVERSE OF NOTE]
RumbleOn,
Inc.
6.75%
Convertible Senior Note due 2025
This
Note is one of a duly authorized issue of Notes of the Company,
designated as its 6.75% Convertible Senior Notes due 2025 (the
“Notes”),
limited to the aggregate principal amount of $38,750,000, all
issued or to be issued under and pursuant to an Indenture dated as
of January 14, 2020 (the “Indenture”), between the Company
and Wilmington Trust, National Association (the “Trustee”), to which Indenture and
all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and
the Holders of the Notes. Capitalized terms used in this Note and
not defined in this Note shall have the respective meanings set
forth in the Indenture.
In case
certain Events of Default shall have occurred and be continuing,
the principal of, and interest on, all Notes may be declared, by
either the Trustee or Holders of at least 25% in aggregate
principal amount of Notes then outstanding, and upon said
declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions and certain exceptions set
forth in the Indenture.
Subject
to the terms and conditions of the Indenture, the Company will make
all payments and deliveries in respect of the Fundamental Change
Repurchase Price on the Fundamental Change Repurchase Date (if
applicable), the Redemption Price on any Redemption Date (if
applicable) and the principal amount on the Maturity Date, as the
case may be, to the Holder who surrenders a Note to a Paying Agent
to collect such payments in respect of the Note. The Company will
pay cash amounts in money of the United States that at the time of
payment is legal tender for payment of public and private
debts.
The
Indenture contains provisions permitting the Company and the
Trustee in certain circumstances, without the consent of the
Holders of the Notes, and in certain other circumstances, with the
consent of the Holders of not less than a majority in aggregate
principal amount of the Notes at the time outstanding, evidenced as
in the Indenture provided, to execute supplemental indentures
modifying the terms of the Indenture and the Notes as described
therein. It is also provided in the Indenture that, subject to
certain exceptions, the Holders of a majority in aggregate
principal amount of the Notes at the time outstanding may on behalf
of the Holders of all of the Notes waive any past Default or Event
of Default under the Indenture and its consequences.
Each
Holder shall have the right to receive payment or delivery, as the
case may be, of (x) the principal (including the Redemption
Price and the Fundamental Change Repurchase Price, if applicable)
of, (y) accrued and unpaid interest, if any, on, and
(z) the consideration due upon conversion of, this Note at the
place, at the respective times, at the rate and in the lawful money
or shares of Common Stock, as the case may be, herein
prescribed.
The
Notes are issuable in registered form without coupons in minimum
denominations of $1,000 principal amount and integral multiples
thereof. At the office or agency of the Company referred to on the
face hereof, and in the manner and subject to the limitations
provided in the Indenture, Notes may be exchanged for a like
aggregate principal amount of Notes of other authorized
denominations, without payment of any service charge but, if
required by the Company or Trustee, with payment of a sum
sufficient to cover any transfer or similar tax that may be imposed
in connection therewith as a result of the name of the Holder of
the new Notes issued upon such exchange of Notes being different
from the name of the Holder of the old Notes surrendered for such
exchange.
A-5
The
Notes shall be redeemable at the Company’s option on or after
January 14, 2023 in accordance with the terms and subject to the
conditions specified in the Indenture. No sinking fund is provided
for the Notes.
Upon
the occurrence of a Fundamental Change, the Holder has the right,
at such Holder’s option, to require the Company to repurchase
for cash all of such Holder’s Notes or any portion thereof
(in principal amounts of $1,000 or integral multiples of $1,000 in
excess thereof) on the Fundamental Change Repurchase Date at a
price equal to the Fundamental Change Repurchase
Price.
Subject
to the provisions of the Indenture, the Holder hereof has the
right, at its option, 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
the Maturity Date, to convert any Notes or portion thereof that is
$1,000 or an integral multiple thereof, into cash, shares of Common
Stock or a combination of cash and shares of Common Stock, as
applicable, at the Conversion Rate specified in the Indenture, as
adjusted from time to time as provided in the
Indenture.
For any Conversion Date that occurs on or after
January 14, 2021 or after the occurrence of any 30 Trading Day
period during which the Last Reported Sale Price of the Common
Stock has been at least 130% of the Conversion Price then in effect
for at least 20 Trading Days (whether or not consecutive), the
Company shall, in addition to the other consideration payable or
deliverable in connection with any conversion of Notes, make an
Interest Make-Whole Payment as provided in the
Indenture.
A-6
ABBREVIATIONS
The
following abbreviations, when used in the inscription of the face
of this Note, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM
= as tenants in common
UNIF
GIFT MIN ACT = Uniform Gifts to Minors Act
CUST =
Custodian
TEN ENT
= as tenants by the entireties
JT TEN
= joint tenants with right of survivorship and not as tenants in
common
Additional
abbreviations may also be used though not in the above
list.
A-7
SCHEDULE A7
SCHEDULE OF EXCHANGES OF NOTES
RumbleOn,
Inc.
6.75%
Convertible Senior Notes due 2025
The
initial principal amount of this Global Note is DOLLARS ($[ ]). The
following increases or decreases in this Global Note have been
made:
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Date of
exchange
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Amount
of
decrease
in
principal
amount of
this
Global
Note
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Amount
of
increase
in
principal
amount of
this
Global
Note
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Principal
amount of
this
Global
Note
following
such
decrease
or
increase
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Signature
of
authorized
signatory
of
Trustee
or
Custodian
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A-8
ATTACHMENT 1
[FORM
OF NOTICE OF CONVERSION]
To:
Wilmington Trust,
National Association
Global
Capital Markets
50
South Sixth Street, Suite 1290
Minneapolis,
Minnesota 55402
Attn:
RumbleOn Notes Administrator
The
undersigned registered owner of this Note hereby exercises the
option to convert this Note, or the portion hereof (that is $1,000
principal amount or an integral multiple thereof) below designated,
into cash, shares of Common Stock or a combination of cash and
shares of Common Stock, as applicable, 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 such conversion, together with any cash for any
fractional share, and any Notes representing any unconverted
principal amount hereof, be issued and delivered to the registered
Holder hereof unless a different name has been indicated below. If
any shares of Common Stock or any portion of this Note not
converted are to be issued in the name of a Person other than the
undersigned, the undersigned will pay all documentary, stamp or
similar issue or transfer taxes, if any in accordance with
Section 14.02(d) and
Section 14.02(e) of the
Indenture. Any amount required to be paid to the undersigned on
account of interest accompanies this Note. Capitalized terms used
herein but not defined shall have the meanings ascribed to such
terms in the Indenture.
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Dated:
___________________________
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_______________________________________
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_______________________________________
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Signature(s)
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_________________________________
Signature
Guarantee
Signature(s)
must be guaranteed by
an eligible
Guarantor Institution
(banks, stock
brokers, savings and
loan associations
and credit unions)
with membership in
an approved
signature guarantee
medallion program
pursuant
to Securities and Exchange
Commission
Rule 17Ad-15 if shares
of
Common Stock are to be issued, or
Notes
are to be delivered, other than
to and
in the name of the registered holder.
1
Fill in
for registration of shares if to be issued,
and Notes if to be
delivered, other than to and in
the name of the
registered holder:
___________________________
(Name)
___________________________
(Street
Address)
___________________________
(City,
State and Zip Code)
Please
print name and address
Principal amount to
be converted (if less than all):
$_______,000
NOTICE:
The above signature(s) of the Holder(s)
hereof
must correspond with the name as written
upon
the face of the Note in every particular
without
alteration or enlargement or any change whatever.
________________________
Social
Security or Other Taxpayer
Identification
Number
2
ATTACHMENT 2
[FORM
OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]
To:
Wilmington Trust,
National Association
Global
Capital Markets
50
South Sixth Street, Suite 1290
Minneapolis,
Minnesota 55402
Attn:
RumbleOn Notes Administrator
The
undersigned registered owner of this Note hereby acknowledges
receipt of a notice from RumbleOn, 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
Section 15.02
of the Indenture referred to in this Note (1) the entire
principal amount of this Note, or the portion thereof (that is
$1,000 principal amount or an integral multiple thereof) below
designated, and (2) if such Fundamental Change Repurchase Date
does not fall during the period after a Regular Record Date and on
or prior to the corresponding Interest Payment Date, accrued and
unpaid interest, if any, thereon to, but excluding, such
Fundamental Change Repurchase Date. Capitalized terms used herein
but not defined shall have the meanings ascribed to such terms in
the Indenture.
In the
case of Physical Notes, the certificate numbers of the Notes to be
repurchased are as set forth below:
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_________________________________
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Dated:
___________________________
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_______________________________________
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_______________________________________
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Signature(s)
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_______________________________________
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Social Security or
Other Taxpayer
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Identification
Number
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Principal amount to
be repaid (if less than all):
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$_______,000
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NOTICE: The above
signature(s) of the Holder(s)
hereof must
correspond with the name as written
upon the face of
the Note in every particular without
alteration or
enlargement or any change whatever.
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1
ATTACHMENT 3
[FORM
OF ASSIGNMENT AND TRANSFER]
Wilmington
Trust, National Association
Global
Capital Markets
50
South Sixth Street, Suite 1290
Minneapolis,
Minnesota 55402
Attn:
RumbleOn Notes Administrator
For
value received ____________________ hereby sell(s), assign(s) and
transfer(s) unto
_____________________________________________________________
_____________________________________________________________
(Please
insert social security or Taxpayer Identification Number of
assignee)
the
within Note, and hereby irrevocably constitutes and appoints
attorney to transfer the said Note on the books of the Company,
with full power of substitution in the premises.
In
connection with any transfer of the within Note occurring during
the time that such Note includes the legend set forth in Section
2.05(c), the undersigned confirms that such Note is being
transferred:
☐
To RumbleOn, Inc. or a subsidiary thereof; or
☐
Pursuant to a registration statement that has become or been
declared effective under the Securities Act of 1933, as amended;
or
☐
Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
☐
Pursuant to and in compliance with 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.
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Dated:
___________________________
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_______________________________________
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_______________________________________
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Signature(s)
|
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_________________________________
Signature
Guarantee
Signature(s)
must be guaranteed
by an
eligible Guarantor Institution
(banks,
stock brokers, savings and
loan
associations and credit unions)
with
membership in an approved
signature
guarantee medallion
program
pursuant to Securities and
Exchange
Commission Rule 17Ad-15
if
Notes are to be delivered, other than
to and
in the name of the registered holder.
NOTICE:
The signature on the assignment
must
correspond with the name as written
upon
the face of the Note in every particular
without
alteration or enlargement or any
change
whatever.
1
Exhibit 4.3
$38,750,000
RUMBLEON, INC.
6.75% Convertible Senior Notes Due 2025
Form of
Registration Rights Agreement
January 14, 2020
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RumbleOn, Inc., a Nevada corporation (the
“Company”), proposes to issue to
___________________________ and ___________________________, (the
“Investors”) pursuant to the Exchange and Subscription
Agreement dated January 10, 2020, between the Company and the
Initial Holders (the “Exchange and Subscription
Agreement”), as amended
by that certain Joinder and Amendment, dated January 13, 2020, by
and among the Company, the Investors and
___________________________.
(“___________________________” and together with the Investors, each an
“Initial
Holder” and collectively,
the “Initial
Holders”). $38,750,000
aggregate principal amount of its 6.75% Convertible Senior Notes
due 2025 (the “Notes”) upon the terms and subject to the
conditions set forth in the Exchange and Subscription
Agreement.
As
an inducement to the Initial Holders to enter into the Exchange and
Subscription Agreement and in satisfaction of a condition to the
obligations of the Initial Holders thereunder, the Company agrees
with the Initial Holders, for the benefit of the Holders (as
defined below), as follows:
1.
Certain Definitions.
Capitalized
terms used but not defined herein shall have the meanings given to
such terms in the Exchange and Subscription Agreement. For purposes
of this Registration Rights Agreement, the following terms shall
have the following meanings:
(a) “Additional
Interest” has the meaning
assigned thereto in Section 2(d).
1
(b) “Additional
Interest Payment Date”
has the meaning assigned thereto in Section
2(d).
(c) “Affiliate”
has the meaning set forth in Rule 405 under the Securities Act,
except as otherwise expressly provided herein.
(d) “Agreement”
means this Registration Rights Agreement, as the same may be
amended from time to time pursuant to the terms
hereof.
(e) “Automatic
Shelf Registration Statement” has the meaning set forth in Rule 405
under the Securities Act.
(f) “Business
Day” means any day that
is not a Saturday, Sunday or other day on which commercial banks in
New York City are authorized or required by law to remain
closed.
(g) “Commission”
means the Securities and Exchange Commission, or any other federal
agency at the time administering the Exchange Act or the Securities
Act, whichever is the relevant statute for the particular
purpose.
(h) “Company”
has the meaning assigned thereto in the first paragraph of this
Agreement.
(i) “Deferral
Notice” has the meaning
assigned thereto in Section 3(b).
(j) “Deferral
Period” has the meaning
assigned thereto in Section 3(b).
(k) “Effective
Period” has the meaning
assigned thereto in Section 2(a).
(l) “Exchange
Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
(m) “Exchange
and Subscription Agreement” has the meaning assigned thereto in the
first paragraph of this Agreement”
(n) “FINRA”
means the Financial Industry Regulatory Authority,
Inc.
(o) “Holder”
means each holder, from time to time, of Registrable Securities
(including the Initial Holders).
(p) “Indemnified
Holder” has the meaning
assigned thereto in Section 6(a).
(q) “Indenture”
means the Indenture dated as of January 14, 2020 between the
Company and the Trustee, pursuant to which the Notes are being
issued.
(r) “Initial
Holders” has the meaning
assigned thereto in the first paragraph of this
Agreement.
(s) “Last
Reported Sale Price” has
the meaning assigned to it in the Indenture.
(t) “Material
Event” has the meaning
assigned thereto in Section 3(a)(iv).
2
(u) “Majority
Holders” means, on any
date, the holders of the majority in aggregate amount of the
Registrable Securities; provided that such aggregate amount, with
respect to Notes that are Registrable Securities will be based on
the aggregate principal amount of Notes that are Registrable
Securities, and with respect to Shares that are Registrable
Securities, will be based on the average of the Last Reported Sale
Prices of the Company’s Common Stock for each of five
consecutive trading days ending on a date chosen by the Company in
a reasonable manner to effect the intent of this Agreement
multiplied by the number of such Shares that are Registrable
Securities; provided further that whenever the consent or approval
of the Majority Holders is required hereunder, any Registrable
Securities owned directly or indirectly by the Company or any
Affiliate shall not be counted in determining whether such consent
or approval was given by the Majority Holders.
(v) “Notice
and Questionnaire” means
a written notice delivered to the Company containing substantially
the information called for by the Form of Selling Securityholder
Notice and Questionnaire attached as Annex A to this
Agreement.
(w) “Notice
Holder” means, on any
date, any Holder that has delivered a properly completed Notice and
Questionnaire to the Company on or prior to such
date.
(x) “Notes”
has the meaning assigned thereto in the first paragraph of this
Agreement.
(y) “Person”
means a corporation, limited liability company, association,
partnership, organization, business, individual, government or
political subdivision thereof or governmental
agency.
(z) “Prospectus”
means the prospectus included in any Shelf Registration Statement
(including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A,
430B or 430C under the Securities Act), as amended or supplemented
by any amendment or prospectus supplement, including post-effective
amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such
Prospectus.
(aa) “Registrable
Securities” means the
Securities; provided, however,
that such Securities shall not be
Registrable Securities if as of the applicable date of
determination (i) such Securities have ceased to be outstanding;
(ii) in the circumstances contemplated by Section 2(a), a
registration statement registering such Securities under the
Securities Act has been declared or becomes effective and such
Securities have been sold or otherwise transferred or disposed of
by the Holder thereof pursuant to such effective registration
statement; or (iii) Securities that have been transferred or sold
in a transaction in which the Company delivered a new security in
place of the Securities and such new security (x) is not subject to
transfer restrictions under the Securities Act, (y) does not bear a
restrictive legend and (z) is assigned an unrestricted
CUSIP.
(bb) “Registration
Default” has the meaning
assigned thereto in Section 2(d).
(cc) “Registration
Expenses” has the meaning
assigned thereto in Section 5.
(dd) “Rule
144,”
“Rule
144A,”
“Rule
405,”
“Rule
415” and
“Rule
433” mean, in each case,
such rule as promulgated under the Securities
Act.
(ee) “Securities”
means the Notes and the Shares.
3
(ff) “Securities
Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
(gg) “Shares”
means the shares of Class B Common Stock of the Company, par value
$0.001 per share (the “Common Stock”), as of the date hereof (and subject to
Section 14.07 of the Indenture), into which the Notes are
convertible or that have been issued upon any conversion of Notes
into Common Stock of the Company, including any Interest Make-Whole
Payment (as defined in the Indenture).
(ii)
“Shelf
Inspectors” has the
meaning assigned thereto in Section 3(a)(vii).
(hh) “Shelf
Registration Statement”
means the shelf registration statement referred to in Section 2(a),
as amended or supplemented by any amendment or supplement,
including post-effective amendments and any additional information
contained in a form of prospectus or prospectus supplement that is
deemed retroactively to be a part of the Shelf Registration
Statement pursuant to Rules 430A, 430B or 430C, and all materials
incorporated by reference or explicitly deemed to be incorporated
by reference in such Shelf Registration Statement, which may be an
Automatic Shelf Registration Statement.
(ii) “Special
Counsel” shall have the
meaning assigned thereto in Section 5.
(jj) “Trust
Indenture Act” means the
Trust Indenture Act of 1939, as amended, or any successor thereto,
and the rules, regulations and forms promulgated thereunder, all as
the same shall be amended from time to time.
(kk) “Trustee”
shall have the meaning assigned such term in the
Indenture.
Unless
the context otherwise requires, any reference herein to a
“Section” or “clause” refers to a Section
or clause, as the case may be, of this Agreement, and the words
“herein,” “hereof” and
“hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular Section or
other subdivision. Unless the context otherwise requires, any
reference to a statute, rule or regulation refers to the same
(including any successor statute, rule or regulation thereto) as it
may be amended from time to time.
2.
Registration Under the Securities Act.
(a) The
Company shall file an Automatic Shelf Registration Statement, if
the Company is eligible to do so and has not already done so
(provided such previously filed Automatic Shelf Registration
Statement covers all Holders of Registrable Securities determined
as of the date such subsequent obligation arose), and, if the
Company is not eligible for an Automatic Shelf Registration
Statement, then in lieu of the foregoing the Company shall file a
Shelf Registration Statement for the registration of, and the sale
on a continuous or delayed basis by the Holders of, all of the
Registrable Securities pursuant to Rule 415 or any similar rule
that may be adopted by the Commission, and use its commercially
reasonable efforts to cause the Shelf Registration Statement to
become or be declared effective under the Securities Act on the day
that is 120 days after the date of this Agreement. It being
understood that if there are no Registrable Securities entitled to
be included in the Shelf Registration Statement at such time that
the Company shall have no obligation to file such Shelf
Registration Statement at such time.
The Company agrees to use its commercially
reasonable efforts to keep such Shelf Registration Statement
continuously effective, subject to Section 3(b), until the earliest
of (x) the date by which all Registrable Securities have been sold
pursuant to such Shelf Registration Statement; and (y) such date as
each of the Registrable Securities covered by the Shelf
Registration Statement ceases to be a Registrable Security (the
“Effective
Period”).
4
(b) The
Company further agrees that it shall cause the Shelf Registration
Statement, the related Prospectus and any amendment or supplement
thereto, as of the effective date of the Shelf Registration
Statement, as of the time of sale of any Securities under such
Shelf Registration Statement, and as of the date of any such
amendment or supplement, (i) to comply in all material respects
with the applicable requirements of the Securities Act and (ii) not
to contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order
to make the statements therein (in the case of the Prospectus, in
the light of the circumstances under which they were made) not
misleading, and the Company agrees to furnish to the Holders such
number of copies as such Holders may reasonably request of any
supplement or amendment prior to its being used or promptly
following its filing with the Commission; provided, however,
that the Company shall have no
obligation to deliver to Holders copies of any amendment consisting
exclusively of an Exchange Act report or other Exchange Act filing
otherwise publicly available on the Commission’s Edgar
database. If the Shelf Registration Statement, as amended or
supplemented from time to time, ceases to be effective for any
reason at any time during the Effective Period (other than because
all Registrable Securities registered thereunder shall have been
sold pursuant thereto or shall have otherwise ceased to be
Registrable Securities), the Company shall use its commercially
reasonable efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof.
(c) Each
Holder agrees that if such Holder wishes to sell Registrable
Securities pursuant to the Shelf Registration Statement and related
Prospectus, it will do so only in accordance with this Section 2(c)
and Section 3(c) and Section 4 hereof. From and after the date the
Shelf Registration Statement is initially effective and until the
tenth (10th)
Business Day prior to the expiration of the Effective Period, the
Company shall, as promptly as is reasonably practicable after the
date a Notice and Questionnaire is delivered by a Notice Holder,
and in any event within (x) ten (10) Business Days after the date
such Notice and Questionnaire is received by the Company, (y) if a
Notice and Questionnaire is so received during a Deferral Period,
ten (10) Business Days after the expiration of such Deferral Period
or (z) if a Notice and Questionnaire is received prior to a
Deferral Period, but a Deferral Period occurs prior to ten (10)
Business Days after such receipt, ten (10) Business Days after the
expiration of such Deferral Period,
(i) if
required by applicable law, file with the Commission a
post-effective amendment to the Shelf Registration Statement or
prepare and, if required by applicable law, file a supplement to
the related Prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required
document so that the Holder delivering such Notice and
Questionnaire is named as a selling security holder in the Shelf
Registration Statement and the related Prospectus in such a manner
as to permit such Holder to deliver such Prospectus to purchasers
of the Registrable Securities in accordance with applicable law
and, if the Company shall file a post-effective amendment to the
Shelf Registration Statement and such amendment is not
automatically effective, use its commercially reasonable efforts to
cause such post-effective amendment to be declared or to otherwise
become effective under the Securities Act as promptly as is
reasonably practicable;
(ii) provide
such Holder with as many copies of any documents filed pursuant to
Section 2(c)(i) as such Holder may reasonably request in connection
with the Securities covered by such Holder’s Notice and
Questionnaire; and
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(iii) notify
such Holder as promptly as reasonably practicable after the
effectiveness under the Securities Act of any post-effective
amendment filed pursuant to Section 2(c)(i);
provided that if such Notice
and Questionnaire is delivered during a Deferral Period, the
Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in this Section
2(c) above upon expiration of the Deferral Period in accordance
with Section 3(b). Notwithstanding anything contained herein to the
contrary, the Company shall be under no obligation to name any
Holder that is not a Notice Holder as a selling securityholder in
any Shelf Registration Statement or related Prospectus or
prospectus supplement; provided, however,
that any Holder that becomes a Notice
Holder pursuant to the provisions of this Section 2(c) (whether or
not such Holder was a Notice Holder at the time the Shelf
Registration Statement was declared or otherwise became effective)
shall be named as a selling securityholder in the Shelf
Registration Statement or related Prospectus in accordance with the
requirements of this Section 2(c). Notwithstanding the forgoing, in
no event shall the Company be required to file more than one
post-effective amendment to the Shelf Registration Statement
pursuant to Section 2(c)(i) during any 45-day
period.
(d) If
any of the following events (any such event a
“Registration
Default”) shall occur,
then additional interest (the “Additional
Interest”) shall become
payable by the Company to Holders in respect of the Notes as
follows:
(i) if
on the day that is 120 days after the date of this Agreement,
Registrable Securities are held by any Person other than the
Company and the Shelf Registration Statement has not been filed
with and declared effective by the Commission by such date (other
than pursuant to Section 3(b) hereof), and the Company does not
file and have declared effective a Shelf Registration Statement
within five (5) Business Days, then, commencing on the day
following the Registration Default, Additional Interest shall
accrue on the principal amount of the outstanding Notes that are
Registrable Securities at a rate of 0.50% per annum;
(ii) [Reserved];
(iii) if
the Shelf Registration Statement has become or been declared
effective but such Shelf Registration Statement ceases to be
effective or the prospectus contained therein ceases to be usable
in connection with the resales of Registrable Securities at any
time during the Effective Period (other than pursuant to Section
3(b) hereof), and the Company does not cure the Registration
Default within five (5) Business Days by a post-effective amendment
or a report filed pursuant to the Exchange Act, then, commencing on
the day such Shelf Registration Statement ceases to be effective,
Additional Interest shall accrue on the principal amount of the
outstanding Notes that are Registrable Securities at a rate of
0.50% per annum;
(iv) if
the aggregate duration of Deferral Periods in any period exceeds
the number of days permitted in respect of such period pursuant to
Section 3(b) hereof, then, commencing on the day the aggregate
duration of Deferral Periods in any period exceeds the number of
days permitted in respect of such period, Additional Interest shall
accrue on the principal amount of the outstanding Notes that are
Registrable Securities at a rate of 0.50% per annum;
provided, however, that the
Additional Interest rate on the Notes shall not exceed in the
aggregate 0.50% per annum and shall not be payable under more than
one clause above for any given period of time; provided
further, however, that
Additional Interest on the Notes that are Registrable Securities as
a result of clauses (i) through (iv) above, shall cease to accrue
upon the earlier of (1) the filing and effectiveness of the Shelf
Registration Statement (in the case of clause (i) above), (2) the
effectiveness of the Shelf Registration Statement which had ceased
to remain effective (in the case of clause (iii) above), (3) the
termination of the Deferral Period that caused the limit on the
aggregate duration of Deferral Periods in a period set forth in
Section 3(b) to be exceeded (in the case of clause (iv) above), (4)
the date the Notes cease to be Registrable Securities or (5) the
date the Notes cease to be outstanding (as determined in accordance
with the terms of the Indenture).
6
Additional Interest on the Notes, if any, will be
payable in arrears in cash on January 1 and July 1 of each year
(the “Additional Interest Payment
Date”) to holders of
record of outstanding Notes that are Registrable Securities at the
close of business on December 15 or June 15 (whether or not a
Business Day), as the case may be, immediately preceding the
relevant Additional Interest Payment Date; provided that (x) any accrued and unpaid Additional
Interest with respect to any Notes or portion thereof submitted for
conversion shall be paid in the manner and to the extent provided
for the payment of interest in Section 14.02(h) of the Indenture
and (y) that any accrued and unpaid Additional Interest with
respect to any Notes or portion thereof submitted for repurchase on
a Fundamental Change Repurchase Date (as defined in the Indenture),
and not withdrawn in compliance with Section 15.03 of the
Indenture, shall be paid in the manner provided for the payment of
interest in Section 15.02(a) of the Indenture. Following the cure
of all Registration Defaults requiring the payment of Additional
Interest to the Holders of Notes that are Registrable Securities
pursuant to this Section 2(d), the accrual of Additional Interest
will cease (without in any way limiting the effect of any
subsequent Registration Default requiring the payment of Additional
Interest). Additional Interest on the Notes, if any, will accrue
beginning on the date provided for in clauses 2(d)(i) through (iv)
above, as applicable, to, but excluding, the date on which all
Registration Defaults have been cured. If a Holder converts some or
all of the Notes into Shares, such Holder will not be entitled to
receive Additional Interest on such Shares.
The
Company shall notify the Trustee as promptly as reasonably
practicable upon the happening of each and every Registration
Default. The Trustee shall be entitled, on behalf of Holders, to
seek any available remedy for the enforcement of this Agreement,
including for the payment of any Additional Interest if any becomes
due.
Notwithstanding
the foregoing, the parties agree that the sole monetary damages
payable for a violation of the terms of this Agreement with respect
to which additional monetary amounts are expressly provided shall
be as set forth in this Section 2(d). Nothing shall preclude a
Notice Holder or Holder from pursuing or obtaining specific
performance or other equitable relief with respect to this
Agreement.
3.
Registration
Procedures.
The
following provisions shall apply to the Shelf Registration
Statement filed pursuant to Section 2:
(a)
The
Company shall:
(i) notify
the Holders of Registrable Securities at least 20 (twenty) Business
Days before filing any Shelf Registration Statement pursuant to
Section 2 of the Company’s intent to file such Shelf
Registration Statement and seeking a determination from such Holder
as to whether such Holder elects to have its Registrable Securities
included in such Shelf Registration Statement;
(ii) before
filing any Shelf Registration Statement or Prospectus or any
amendments or supplements thereto with the Commission, furnish to
the Initial Holders copies of all such documents proposed to be
filed and use its commercially reasonable efforts to reflect in
each such document when so filed with the Commission such comments
as such Initial Holders reasonably shall propose within three (3)
Business Days of the delivery of such copies to the Holders;
provided, however, that the Company shall be permitted to file
prospectus supplements or post-effective amendments to reflect
additional selling securityholders without prior review of the
Initial Holders;
7
(iii) use
its commercially reasonable efforts to prepare and file with the
Commission such amendments and post-effective amendments to the
Shelf Registration Statement and file with the Commission any other
required document as may be necessary to keep such Shelf
Registration Statement continuously effective until the expiration
of the Effective Period; cause the related Prospectus to be
supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar
provisions then in force) under the Securities Act; and comply with
the provisions of the Securities Act applicable to it with respect
to the disposition of all Securities covered by such Shelf
Registration Statement during the Effective Period in accordance
with the intended methods of disposition by the sellers thereof set
forth in such Shelf Registration Statement as so amended or such
Prospectus as so supplemented;
(iv) as
promptly as reasonably practicable, notify the Notice Holders (A)
when such Shelf Registration Statement or the Prospectus included
therein or any amendment or supplement to the Prospectus or
post-effective amendment has been filed with the Commission, and,
with respect to such Shelf Registration Statement or any
post-effective amendment that is not an Automatic Shelf
Registration Statement, when the same is declared or has become
effective, provided, that the availability of such Shelf Registration
Statement or any Prospectus or post-effective amendment on the
Commission’s EDGAR database shall be considered notice for
the purpose of this Section 3(a)(iv),
(B)
of any request (but not the nature or
details regarding such request), following the effectiveness of the
Shelf Registration Statement, by the Commission or any other
federal or state governmental authority for amendments or
supplements to the Shelf Registration Statement or related
Prospectus (other than any such request relating to a review of the
Company’s Exchange Act filings), (C) of the issuance by the
Commission of any stop order suspending the effectiveness of such
Shelf Registration Statement or the initiation or written threat of
any proceedings for that purpose, (D) of the receipt by the Company
of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or written threat of any proceeding
for such purpose, (E) of the occurrence of any event or the
existence of any fact (but not the nature of or details concerning
such event or fact) (a “Material
Event”) as a result of
which any Shelf Registration Statement shall contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, or any Prospectus shall contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided, however,
that no notice by the Company shall be
required pursuant to this clause (E) in the event that the Company
either promptly files a prospectus supplement, amendment to the
Shelf Registration Statement to update the Prospectus or a Form 8-K
or other appropriate Exchange Act report that is incorporated by
reference into the Shelf Registration Statement, which, in either
case, contains the requisite information with respect to such
Material Event that results in such Shelf Registration Statement or
Prospectus, as the case may be, no longer containing any untrue
statement of material fact or omitting to state a material fact
required to be stated therein or necessary to make the statements
contained therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading, (F) of
the determination by the Company that a post-effective amendment to
the Shelf Registration Statement (other than for the purpose of
naming a Notice Holder as a selling securityholder therein) will be
filed with the Commission, which notice may, at the discretion of
the Company (or as required pursuant to Section 3(b)), state that
it constitutes a Deferral Notice, in which event the provisions of
Section 3(b) shall apply or (G) at any time when a Prospectus is
required (or but for the exemption contained in Rule 172 would be
required) to be delivered under the Securities Act, that the Shelf
Registration Statement, Prospectus, Prospectus amendment or
supplement or post-effective amendment does not conform in all
material respects to the applicable requirements of the Securities
Act and the rules and regulations of the Commission
thereunder;
8
(v) prior
to any public offering of the Registrable Securities pursuant to
the Shelf Registration Statement, use its commercially reasonable
efforts to register or qualify, or cooperate with the Notice
Holders included therein and their respective counsel in connection
with the registration or qualification of Securities for offer and
sale under the securities or blue sky laws of such jurisdictions
within the United States as any such Notice Holders reasonably
request in writing and do any and all other acts or things
reasonably necessary or advisable to enable the offer and sale in
such jurisdictions of the Securities covered by the Shelf
Registration Statement; prior to any public offering of the
Registrable Securities pursuant to the Shelf Registration
Statement, use its commercially reasonable efforts to keep each
such registration or qualification (or exemption therefrom)
effective during the Effective Period in connection with such
Notice Holder’s offer and sale of Registrable Securities
pursuant to such registration or qualification (or exemption
therefrom) and use its commercially reasonable efforts to provide
for the disposition in such jurisdictions of such Registrable
Securities in the manner set forth in the Shelf Registration
Statement and the related Prospectus; provided that for purposes of this Section 3(a)(v), the
Company will not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process or to
taxation in any such jurisdiction where it is not then so
subject;
(vi) use
its commercially reasonable efforts to lift any suspension of the
qualification of any of the Registrable Securities for sale in any
jurisdiction in which they have been qualified for sale, in each
case at the earliest practicable date;
(vii) upon
reasonable written notice, and only in connection with a
disposition of Securities under the Shelf Registration Statement,
for a reasonable period prior to the filing of the Shelf
Registration Statement, and throughout the Effective Period (but
not during a Deferral Period), (i) make reasonably available for
inspection by a representative of, and Special Counsel acting for,
the Majority Holders and any underwriter (and its counsel)
participating in any disposition of Securities pursuant to such
Shelf Registration Statement (collectively, the
“Shelf
Inspectors”), all
relevant and material financial and other records and pertinent
corporate documents of the Company and its subsidiaries and (ii)
use commercially reasonable efforts to have its officers,
employees, accountants and counsel make available all relevant
material information reasonably requested by such representative,
Special Counsel or any such underwriter in connection with such
Shelf Registration Statement, in each case as is reasonable and
customary for similar “due diligence” examinations of
issuers of similar size and business of the Company;
provided, however, that such persons shall first agree with the
Company that any information that is reasonably designated by the
Company as confidential at the time of delivery shall be kept
confidential by such persons and shall be used solely for the
purposes of exercising rights under this Agreement and satisfying
“due diligence” obligations under the Securities Act
and such person shall not engage in trading any securities of the
Company until such material non-public information becomes properly
publicly available, unless (w) disclosure of such information is
required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities, (x) disclosure of
such information is required by law, including any disclosure
requirements pursuant to federal securities laws in connection with
the filing of any Shelf Registration Statement or the use of any
Prospectus or prospectus supplement referred to in this Agreement
upon a customary opinion of counsel for such persons delivered and
reasonably satisfactory to the Company, (y) such information
becomes generally available to the public other than as a result of
a disclosure or failure to safeguard by any such person, or (z)
such information becomes available to any such person from a source
(other than the Company, its Affiliates, officers, employees,
accountants, agents and counsel) and such source is not bound by a
confidentiality agreement; provided, further, that with respect to any Special Counsel engaged
by the Majority Holders, the foregoing inspection and information
gathering shall be coordinated by one counsel designated by the
Majority Holders;
9
(viii) if
requested by the Majority Holders, their Special Counsel or the
managing underwriters (if any) in connection with an underwritten
offering of the Registrable Securities pursuant to the Shelf
Registration Statement, use its commercially reasonable efforts to
cause (i) its counsel to deliver an opinion relating to the Shelf
Registration Statement and the Securities in a customary form, (ii)
its officers to execute and deliver all customary documents and
certificates reasonably requested by the Majority Holders, their
Special Counsel or the managing underwriters (if any) and (iii) its
registered independent public accounting firm to provide a comfort
letter or letters relating to the Shelf Registration Statement in a
reasonable and customary form, subject to receipt of appropriate
documentation as contemplated, and only if permitted, by Statement
of Auditing Standards No. 72 or any successor statement thereto,
covering matters of the type customarily covered in comfort letters
in connection with secondary underwritten offerings;
provided,
that in no event shall the Company be
required to furnish such opinions, documents or comfort letters
pursuant to the provisions of this Section in more than three
underwritten offerings.
(ix) if
reasonably requested in writing by any Initial Holder or any Notice
Holder as a result of the “due diligence” examination
referred to in Section 3(a)(vii) above, promptly incorporate in a
prospectus supplement or post-effective amendment to the Shelf
Registration Statement such information as such Initial Holder or
such Notice Holder shall, on the basis of a written opinion of
Special Counsel, determine to be required to be included therein by
applicable law and make any required filings of such prospectus
supplement or such post-effective amendment; provided, that the Company shall not be required to take
any actions under this Section 3(a)(ix) that are not, in the
reasonable opinion of counsel for the Company, in compliance with
applicable law; provided,
further, that the Company shall
have no liability for Additional Interest under this Agreement if
it reasonably objects to making such additional filing and if such
additional filing would otherwise cause the Company to pay
Additional Interest.
(x) as
promptly as practicable furnish to each Notice Holder and the
Initial Holders, upon their request and without charge, at least
one (1) conformed copy of the Shelf Registration Statement and any
amendments thereto, including financial statements but excluding
schedules, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits; provided, however,
that the Company shall have no
obligation to deliver to Notice Holders or the Initial Holders a
copy of any amendment publicly available on the Company’s
website or in the Commission’s EDGAR
database;
(xi) during
the Effective Period, deliver to each Notice Holder in connection
with any sale of Registrable Securities pursuant to the Shelf
Registration Statement, upon their request and without charge, as
many copies of the Prospectus relating to such Registrable
Securities (including each preliminary prospectus) and any
amendment or supplement thereto as such Notice Holder may
reasonably request; and the Company hereby consents (except during
such periods that a Deferral Notice is outstanding and has not been
revoked) to the use of such Prospectus or each amendment or
supplement thereto by each Notice Holder in connection with any
offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto in the manner set
forth therein and subject to applicable law; and
(xii) during
the Effective Period, cooperate with the Notice Holders to
facilitate the timely preparation and delivery of certificates
representing Securities to be sold pursuant to the Shelf
Registration Statement free of any restrictive legends, unless
required by applicable law, and in such denominations as permitted
by the Indenture and registered in such names as the Holders
thereof may request in writing at least one (1) Business Days prior
to sales of Securities pursuant to such Shelf Registration
Statement; provided, that nothing herein shall require the Company to
deliver certificated Securities to any beneficial holder of
Securities, except as required by the Indenture;
provided
further however, such Notice
Holders shall pay any such tax that is due because such Notice
Holder requests any shares of Common Stock to be issued in a name
other than the holder’s name as provided for in Sections
2.05(a) and 14.02(e) of the Indenture.
10
(b) Upon
(A) the issuance by the Commission of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation
of proceedings with respect to the Shelf Registration Statement
under Section 8(d) or 8(e) of the Securities Act, (B) the
occurrence of any event or the existence of any Material Event as a
result of which the Shelf Registration Statement shall contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading, or any Prospectus shall contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading, or (C) the occurrence or
existence of any corporate development or business reason that, in
the sole discretion of the Company, makes it appropriate to suspend
the availability of the Shelf Registration Statement and the
related Prospectus, including, without limitation, the acquisition
of assets, pending corporate developments, public filings with
Commission and similar events, the Company will (i) in the case of
clause (B) above, subject to the second sentence of this provision,
use its commercially reasonable efforts to prepare and file an
amendment to such Shelf Registration Statement or a supplement to
the related Prospectus or any document incorporated therein by
reference or file any other required document that would be
incorporated by reference into such Shelf Registration Statement
and Prospectus so that (1) such Shelf Registration Statement does
not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and (2) such
Prospectus does not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, as
thereafter delivered or made available to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to the Shelf Registration Statement,
subject to the second sentence of this provision, use its
commercially reasonable efforts to cause it to be declared
effective or otherwise become effective and (ii) give notice to the
Notice Holders that the availability of the Shelf Registration
Statement is suspended (a “Deferral
Notice”). The Company
will use its commercially reasonable efforts to ensure that the use
of the Prospectus may be resumed (x) in the case of clause (A)
above, as promptly as reasonably practicable, (y) in the case of
clause (B) above, as soon as, in the sole judgment of the Company,
public disclosure of such Material Event would not be prejudicial
to or contrary to the interests of the Company or, if necessary to
avoid unreasonable burden or expense, as soon as practicable
thereafter and (z) in the case of clause (C) above, as soon as, in
the sole discretion of the Company, such suspension is no longer
appropriate; provided that the period during which the availability of
the Shelf Registration Statement and any Prospectus is suspended
(the “Deferral
Period”), without the
Company incurring any obligation to pay Additional Interest
pursuant to Section 2(d), shall not exceed forty-five (45) days in
the aggregate in any ninety (90) day period or an aggregate of
ninety (90) days in any 12-month period.
(c) Each
Holder agrees that upon receipt of any Deferral Notice from the
Company, such Holder shall forthwith discontinue (and cause any
placement or sales agent or underwriters acting on their behalf to
discontinue) the disposition of Registrable Securities pursuant to
the Shelf Registration Statement until such Holder (i) shall have
received copies of such amended or supplemented Prospectus and, if
so directed by the Company, such Holder shall deliver to the
Company (at the Company’s expense) all copies, other than
permanent file copies, then in such Holder’s possession of
the Prospectus covering such Registrable Securities at the time of
receipt of such notice or (ii) shall have received notice from the
Company that the disposition of Registrable Securities pursuant to
the Shelf Registration may continue. Each Holder shall keep
confidential any communication received by it from the Company
regarding the suspension of the use of the Prospectus, except as
required by applicable law.
11
(d) The
Company may require each Holder as to which any registration
pursuant to Section 2(a) is being effected to furnish to the
Company such information regarding such Holder and such
Holder’s intended method of distribution of such Registrable
Securities as the Company may from time to time reasonably request
in writing, but only to the extent such information is required to
comply with the Securities Act.
(e) The
Company shall provide a CUSIP number for all Registrable Securities
covered by the Shelf Registration Statement not later than the
effective date of such Shelf Registration Statement and provide the
Trustee and the transfer agent for the Shares with printed
certificates for the Registrable Securities that are in a form
eligible for deposit with The Depository Trust
Company.
(f) The
Company shall use commercially reasonable efforts to provide such
information as is required for any filings required to be made with
FINRA.
(g) Until
the expiration of the Effective Period, the Company will not
resell, and will use its commercially reasonable efforts to prevent
its “affiliates” (as defined in Rule 144) from
reselling, any of the Notes that have been reacquired by any of
them except pursuant to an effective registration statement under
the Securities Act.
(h) The
Company shall cause the Indenture to be qualified under the Trust
Indenture Act in a the manner prescribed by the Trust Indenture Act
and shall enter into any necessary supplemental indentures in
connection therewith.
(i) The
Company shall enter into such customary agreements and take such
other reasonable and lawful actions in connection therewith
(including those reasonably requested by the Majority Holders) in
order to expedite or facilitate disposition of such Registrable
Securities.
(j) The
Company shall cause the Shares covered by the Shelf Registration
Statement to be listed or quoted, as the case may be, on each
securities exchange or automated quotation system on which the
Common Stock is then listed or quoted.
4.
Holders’
Obligations.
(a) In
addition to the other limitations and requirements described
herein, each Holder agrees, by acquisition of the Registrable
Securities, that no Holder shall be entitled to sell any of such
Registrable Securities pursuant to the Shelf Registration Statement
or to receive a Prospectus relating thereto, unless such Holder has
furnished the Company with a completed Notice and Questionnaire as
required pursuant to Section 2(c) hereof (including the information
required to be included in such Notice and Questionnaire) and the
information set forth in the next sentence. Each Notice Holder
agrees to notify the Company as promptly as practicable of any
inaccuracy or change in information previously furnished by such
Notice Holder to the Company or of the occurrence of any event in
either case as a result of which any Prospectus relating to such
registration contains or would contain an untrue statement of a
material fact regarding such Notice Holder or such Notice
Holder’s intended method of disposition of such Registrable
Securities or omits to state any material fact regarding such
Notice Holder or such Notice Holder’s intended method of
disposition of such Registrable Securities necessary to make the
statements therein, in light of circumstances in which they were
made, not misleading, and promptly to furnish to the Company (i)
any additional information required to correct and update any
previously furnished information or required so that such
Prospectus shall not contain, with respect to such Notice Holder or
the disposition of such Registrable Securities, an untrue statement
of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances in which
they were made, not misleading and (ii) any other information
regarding such Notice Holder and the distribution of such
Registrable Securities as may be required to be disclosed in the
Shelf Registration Statement under applicable law or pursuant to
Commission comments. Each Holder further agrees not to sell any
Registrable Securities pursuant to the Shelf Registration Statement
without delivering, causing to be delivered, or, if permitted by
applicable law, making available, a Prospectus to the purchaser
thereof and, following termination of the Effective Period, to
notify the Company, within ten (10) Business Days of a request by
the Company, of the amount of Registrable Securities sold pursuant
to the Shelf Registration Statement and, in the absence of a
response, the Company may assume that all of the Holder’s
Registrable Securities were so sold in compliance with applicable
law and this Agreement unless and until the Company is notified
otherwise.
12
(b) Any
sale of any Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information
relating to such Holder and its plan of distribution is as set
forth in the Prospectus delivered by such Holder in connection with
such disposition, that such Prospectus does not as of the time of
such sale contain any untrue statement of a material fact relating
to or provided by such Holder or its plan of distribution and that
such Prospectus does not as of the time of such sale omit to state
any material fact relating to or provided by such Holder or its
plan of distribution necessary to make the statements in such
Prospectus, in the light of the circumstances under which they were
made, not misleading. Each Holder further agrees that such Holder
will not make any offer relating to the Registrable Securities that
would constitute an “issuer free writing prospectus”
(as defined in Rule 433) or that would otherwise constitute a
“free writing prospectus” (as defined in Rule 405)
required to be filed by the Company with the Commission or retained
by the Company under Rule 433 of the Securities Act, unless it has
obtained the prior written consent of the Company.
(c) The
Holders shall not offer Registrable Securities under the Shelf
Registration Statement in an underwritten offering without the
Company’s prior written consent. Any underwritten offering
agreed to by the Company shall be on terms and conditions agreed to
by the Company in connection with such offering. The Company shall
not be required to undertake more than three underwritten offerings
pursuant to this Agreement.
5. Registration
Expenses.
The Company agrees to bear and to pay or cause to
be paid promptly after request being made therefor all fees and
expenses incident to the Company’s performance of or
compliance with this Agreement, including, but not limited to, (a)
all Commission and any FINRA registration and filing fees and
expenses, (b) all fees and expenses in connection with the
qualification of the Securities for offering and sale under the
state securities and blue sky laws referred to in Section 3(a)(v)
hereof, including reasonable fees and disbursements of one counsel
for the placement agent or underwriters, if any, in connection with
such qualifications, (c) all expenses relating to the preparation,
printing, distribution and reproduction of the Shelf Registration
Statement, the related Prospectus, each amendment or supplement to
each of the foregoing, the certificates representing the Securities
and all other documents relating hereto, (d) fees and expenses of
the Trustee under the Indenture, any escrow agent or custodian, and
of the registrar and transfer agent for the Shares, (e) in
connection with an underwritten offering, fees, disbursements and
expenses of counsel and the registered independent public
accounting firm of the Company (including the expenses of any
opinions or “cold comfort” letters required by or
incident to such performance and compliance) and (f) reasonable
fees, disbursements and expenses of one counsel for all Holders
retained in connection with the Shelf Registration Statement, as
selected by the Company (unless reasonably objected to by the
Majority Holders, in which case the Majority Holders shall select
such counsel for the Holders) (“Special
Counsel”), and fees,
expenses and disbursements of any other Persons, including special
experts, retained by the Company in connection with such
registration (collectively, the “Registration
Expenses”). To the extent
that any reasonable and proper Registration Expenses are incurred,
assumed or paid by any Holder or any underwriter or placement agent
therefor, the Company shall reimburse such Person for the full
amount of the Registration Expenses so incurred, assumed or paid
promptly after receipt of a documented request therefor.
Notwithstanding the foregoing, the Holders of the Registrable
Securities being registered shall pay all underwriting discounts
and commissions and placement agent fees and commissions
attributable to the sale of such Registrable Securities and the
fees and disbursements of any counsel or other advisors or experts
retained by such Holders (severally or jointly), other than the
Special Counsel and experts specifically referred to
above.
13
6. Indemnification.
(a) The
Company shall indemnify and hold harmless each Notice Holder
(including, without limitation, the Initial Holders), its
Affiliates, their respective officers, directors, employees,
representatives and agents, and each Person, if any, who controls
such Notice Holder within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section
6 and Section 7 as an “Indemnified
Holder”) from and against
any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, without limitation, any loss,
claim, damage, liability or action relating to purchases and sales
of Registrable Securities), to which that Indemnified Holder may
become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state
statutory law or regulation, at common law or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of
a material fact contained in any such Shelf Registration Statement
or any Prospectus forming part thereof, or (ii) the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein
(in the case of any Prospectus, in the light of the circumstances
under which they were made) not misleading, and shall reimburse
each Indemnified Holder promptly upon demand for any legal or other
expenses reasonably incurred by that Indemnified Holder in
connection with investigating or defending or preparing to defend
against or appearing as a third party witness in connection with
any such loss, claim, damage, liability or action 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,
liability or action arises out of, or is based upon, an untrue
statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in
conformity with any information provided by such Indemnified Holder
in writing to the Company expressly for use therein including its
Notice and Questionnaire. This indemnity agreement shall be in
addition to any liability that the Company may otherwise
have.
(b) Each
Notice Holder (including, without limitation, the Initial Holders)
shall indemnify and hold harmless the Company, its Affiliates,
their respective officers, directors, employees, representatives
and agents, and each Person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act
(collectively referred to for purposes of this Section 6(b) and
Section 7 as the Company), from and against any loss, claim, damage
or liability, joint or several, or any action in respect thereof,
to which the Company may become subject, whether commenced or
threatened, under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such
Shelf Registration Statement or any Prospectus forming part
thereof, or (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary in order
to make the statements therein (in the case of any Prospectus, in
the light of the circumstances under which they were made) not
misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with any
information furnished to the Company in writing by such Notice
Holder expressly for use therein including its Notice and
Questionnaire, and shall reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection
with investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such
loss, claim, damage, liability or action as such expenses are
incurred; provided, however,
that no such Notice Holder shall be
liable for any indemnity claims hereunder in excess of the amount
of net proceeds received by such Notice Holder from the sale of
Registrable Securities pursuant to such Shelf Registration
Statement. This indemnity agreement will be in addition to any
liability which any such Notice Holder may otherwise
have.
14
(c) Promptly
after receipt by an indemnified party under this Section 6 of
notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party pursuant to Section 6(a) or
6(b), notify the indemnifying party in writing of the claim or the
commencement of that action; provided, however,
that the failure to notify the
indemnifying party shall not relieve it from any liability that it
may have under this Section 6 except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights
or defenses) by such failure; and provided, further,
that the failure to notify the
indemnifying party shall not relieve it from any liability that it
may have to an indemnified party otherwise than under this Section
6. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the
indemnified party under this Section 6 for any legal or other
expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than the reasonable costs
of investigation; provided, however,
that an indemnified party shall have
the right to employ its own counsel in any such action, but the
fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party
unless (1) the employment of counsel by the indemnified party has
been authorized in writing by the indemnifying party, (2) the
indemnified party has reasonably concluded (based upon advice of
counsel to the indemnified party) that there may be legal defenses
available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party,
(3) a conflict or potential conflict exists (based upon advice of
counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will
not have the right to direct the defense of such action on behalf
of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel reasonably satisfactory to the indemnified
party to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action, in each
of which cases the reasonable fees, disbursements and other charges
of counsel will be at the expense of the indemnifying party or
parties. It is understood that the indemnifying party or parties
shall not, in connection with any proceeding or related proceedings
in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of
attorneys (in addition to any local counsel) at any one time for
all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 6(a)
and 6(b), shall use its reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall
have requested an indemnifying party to reimburse the indemnified
party for fees and expenses or counsel as contemplated by this
section, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of a request in writing
setting forth proposed settlement terms from the indemnified party
and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with the aforesaid request prior to
the date of such settlement. No indemnifying party shall, without
the prior written consent of the indemnified party (which consent
shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement (i) includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such proceeding and (ii) does not include a statement or
admission of fault, culpability or a failure to act, by or on
behalf of the indemnified party.
15
(d) The
provisions of this Section 6 and Section 7 shall remain in full
force and effect, regardless of any investigation made by or on
behalf of any Notice Holder, the Company, or any of the indemnified
Persons referred to in this Section 6 and Section 7, and shall
survive the sale by a Notice Holder of Registrable Securities
covered by the Shelf Registration Statement.
7. Contribution.
If the indemnification provided for in Section 6
is unavailable or insufficient to hold harmless an indemnified
party under Section 6(a) or 6(b), then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute
to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect
the relative benefits received by the Company from the offering and
sale of the Notes, on the one hand, and a Holder with respect to
the sale by such Holder of Registrable Securities, on the other, or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand
and such Holder on the other with respect to the statements or
omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the
Company on the one hand and a Holder on the other with respect to
such offering and such sale shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Notes
(before deducting expenses) received by or on behalf of the
Company, on the one hand, and the total net proceeds (before
deducting expenses) received by such Holder upon a resale of the
Registrable Securities, on the other, bear to the total gross
proceeds from the sale of all Registrable Securities pursuant to
the Shelf Registration Statement in the offering of the Registrable
Securities from which the contribution claim arises. 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 the Company or information supplied by the Company on
the one hand or to any information contained in the relevant Notice
and Questionnaire supplied by such Holder on the other, the intent
of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such untrue statement or
omission. The Notice Holders’ respective obligations to
contribute pursuant to this Section 7 are several in proportion to
the respective number of Registrable Securities they have sold
pursuant to the Shelf Registration Statement and not joint. The
parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 7 were to be determined
by pro
rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this
Section 7 shall be deemed to include, for purposes of this Section
7, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or
preparing to defend any such action or claim. Notwithstanding the
provisions of this Section 7, an indemnifying party that is a
Holder shall not be required to contribute any amount in excess of
the amount by which the total price at which the Registrable
Securities sold by such indemnifying party to any purchaser exceeds
the amount of any damages which such indemnifying party has
otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
16
8. Information
Requirements.
The
Company covenants that, if at any time before the end of the
Effective Period the Company is not subject to the reporting
requirements of the Exchange Act, it will cooperate with any Holder
and take such further customary action as any Holder may reasonably
request in writing (including, without limitation, making such
representations as any such Holder may reasonably request), all to
the extent required from time to time to enable such Holder to sell
Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule 144
and Rule 144A under the Securities Act and customarily taken in
connection with sales pursuant to such exemptions. Upon the written
request of any Holder, the Company shall deliver to such Holder a
written statement as to whether it has complied with such filing
requirements, unless such a statement has been included in the
Company’s most recent report filed pursuant to Section 13 or
Section 15(d) of Exchange Act. Notwithstanding the foregoing,
nothing in this Section 8 shall be deemed to require the Company to
register any of its securities under any section of the Exchange
Act.
9. Miscellaneous.
(a) Amendments
and Waivers. The provisions of
this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may
not be given, unless the Company has obtained the written consent
of the Majority Holders. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a
matter that relates exclusively to the rights of Holders whose
Registrable Securities are being sold pursuant to the Shelf
Registration Statement and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of a
majority in aggregate amount of the Registrable Securities being
sold by such Holders pursuant to the Shelf Registration
Statement; provided that such aggregate amount, with respect to such
Registrable Securities that are Notes will be based on the
aggregate principal amount of such Notes that are Registrable
Securities, and with respect to such Registrable Securities that
are Shares, will be based on the average of the Last Reported Sale
Prices of the Company’s Common Stock for each of five
consecutive trading days ending on a date chosen by the Company in
a reasonable manner to effect the intent of this Agreement
multiplied by the number of such Registrable Securities that are
Shares. Notwithstanding the foregoing sentence, (i) this Agreement
may be amended by written agreement signed by the Company and the
Initial Holders, without the consent of the Holders, to cure any
ambiguity or to correct or supplement any provision contained
herein that may be defective or inconsistent with any other
provision contained herein, or to make such other provisions in
regard to matters or questions arising under this Agreement that
shall not adversely affect the interests of the Holders. Each
Holder at the time of any such amendment, modification, supplement,
waiver or consent or thereafter shall be bound by any such
amendment, modification, supplement, waiver or consent effected
pursuant to this Section 9(a), whether or not any notice, writing
or marking indicating such amendment, modification, supplement,
waiver or consent appears on the Registrable Securities or is
delivered to such Holder.
17
(b) Notices.
All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class
mail, telecopier or air courier guaranteeing next-day
delivery:
(1) If
to the Company, initially at the address set forth in the
Indenture; and
(2) If
to a Holder, to the address of such Holder set forth in the
register (described in Section 2.06 of the Indenture), the Notice
and Questionnaire or other records of the Company.
All
such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one (1)
Business Day after being delivered to a next-day air courier; five
(5) Business Days after being deposited in the mail, if being
delivered by first-class mail; and when receipt is acknowledged by
the recipient’s telecopier machine, if sent by
telecopier.
Notwithstanding
the foregoing, the notice required pursuant to Section 3(a)(i)
shall be given in the same manner that notices are required to be
delivered to holders of Notes pursuant to the
Indenture.
(c) Successors
and Assigns. This Agreement
shall be binding upon the Company and each of its successors and
assigns. Any Person who purchases any Securities from any Initial
Holder shall be deemed, for purposes of this Agreement, to be an
assignee of such Initial Holder. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding
upon each Holder, provided that
nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Indenture. If any
transferee of any Holder shall acquire Registrable Securities, in
any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of
this Agreement, and by taking and holding such Registrable
Securities, such Person shall be conclusively deemed to have agreed
to be bound by and to perform all of the terms and provisions of
this Agreement and such Person shall be entitled to receive the
benefits hereof.
(d) Counterparts.
This Agreement may be executed in any number of counterparts (which
may be delivered in original form or by telecopier) and by the
parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken
together shall constitute one and the same
agreement.
(e) Headings.
The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning
hereof.
(f) Governing
Law. THIS AGREEMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF NEW YORK, AND FOR
ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW
YORK (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS
THEREOF).
(g) Remedies.
In the event of a breach by the Company or by any Holder of any of
their respective obligations under this Agreement, each Holder or
the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law, including recovery of damages
(other than the recovery of damages for a breach by the Company of
its obligations under Section 3 hereof for which Additional
Interest has been paid pursuant to Section 2 hereof), will be
entitled to specific performance of its rights under this
Agreement. The Company and each Holder agree that monetary damages
would not be adequate compensation for any loss incurred by reason
of a breach by it of any of the provisions of this Agreement and
hereby further agree that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense
that a remedy at law would be adequate.
18
(h) No
Inconsistent Agreements. The
Company represents, warrants and agrees that (i) it has not entered
into and shall not on or after the date of this Agreement enter
into any agreement that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the
provisions hereof, (ii) it has not previously entered into any
agreement which remains in effect and does not currently
contemplate entering into any agreement granting any registration
rights with respect to any of its debt securities to any Person
other than this Agreement and (iii) without limiting the generality
of the foregoing, without the written consent of the Majority
Holders, it shall not grant to any Person the right to request the
Company to register any securities of the Company under the
Securities Act unless the rights so granted are not in conflict or
inconsistent with the provisions of this
Agreement.
(i) Piggyback
on Registrations. The Company
may grant registration rights that would permit any person that is
a third party the right to piggyback on any Shelf Registration
Statement, provided that if the managing underwriter, if any, of
any underwritten offering conducted pursuant to Section 4(c) hereof
notifies the Company that the total amount of securities which the
Notice Holders and the holders of such piggyback rights intend to
include in any Shelf Registration Statement is so large as to
materially threaten the success of such offering (including the
price at which such securities can be sold), then the amount,
number or kind of securities to be offered for the account of
holders of such piggyback rights will be reduced to the extent
necessary to reduce the total amount of securities to be included
in such offering to the amount, number and kind recommended by the
managing underwriter prior to any reduction in the amount of
Registrable Securities to be included in such Shelf Registration
Statement; provided that it would not be a default under the
agreements granting such piggyback rights to make such reduction;
provided further that to the extent it would be such a default
under any such agreement to make such reduction, the Company will
use its commercially reasonable efforts to obtain appropriate
waivers.
(j) Severability.
The remedies provided herein are cumulative and not exclusive of
any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no
way be affected, impaired or invalidated, and the parties hereto
shall use their commercially reasonable efforts to find and employ
an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without
including any term, provision, covenant or restriction that may be
hereafter declared invalid, illegal, void or
unenforceable.
(k) Survival.
The respective indemnities, agreements, representations, warranties
and each other provision set forth in this Agreement or made
pursuant hereto shall remain in full force and effect regardless of
any investigation (or statement as to the results thereof) made by
or on behalf of any Holder, any director, officer or partner of
such Holder, any agent or underwriter or any director, officer or
partner thereof, or any controlling Person of any of the foregoing,
and shall survive (x) the delivery and payment for the Notes
pursuant to the Exchange and Subscription Agreement and (y) the
transfer and registration of Registrable Securities by holders of
Registrable Securities.
(l) Securities
Held by the Company, etc. Whenever the consent or approval of Holders of a
specified percentage of Securities is required hereunder,
Securities held by the Company or its Affiliates (other than
subsequent Holders if such subsequent Holders are deemed to be
Affiliates solely by reason of their holdings of such Securities)
shall not be counted in determining whether such consent or
approval was given by the Holders of such required
percentage.
19
If the
foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof,
whereupon this instrument will become a binding agreement between
the Company and the Initial Holders in accordance with its
terms.
Very
truly yours,
THE COMPANY
RUMBLEON,
INC.
By:
Name:
Title:
Accepted: January 14, 2020
___________________________
By:
Name:
Title:
___________________________
By:
Name:
Title:
By:
Name:
Title:
___________________________
By:
Name:
Title:
20
___________________________
By:
Name:
Title:
___________________________
By:
Name:
Title:
21
Annex A
Form of Selling Stockholder
Notice and Questionnaire
22
Exhibit 5.1
Snell
& Wilmer L.L.P.
Hughes
Center
3883
Howard Hughes Parkway, Suite 1100
Las
Vegas, NV 89169-5958
TELEPHONE:
702.784.5200
FACSIMILE:
702.784.5252
January
16, 2020
RumbleOn,
Inc.
901 W.
Walnut Hill Lane
Irving,
Texas 75038
Re: Prospectus Supplement to Registration Statement on Form
S-3
Ladies
and Gentlemen:
We have
acted as Nevada counsel to RumbleOn, Inc., a Nevada corporation
(the “Company”), in connection with the Company's
preparation and filing with the Securities and Exchange Commission
(the "Commission") of a Prospectus Supplement dated January 10,
2020 filed with the Commission pursuant to Rule 424(b) of the
Securities Act Regulations ("Prospectus Supplement"), which
supplements the Company's Registration Statement on Form S-3 (File
No. 333-234340) which was declared effective October 31, 2019, as
amended from time to time (the "Registration Statement"), under the
Securities Act of 1933, as amended (the "Securities Act"),
including the base prospectus dated October 31, 2019 (together with
the Prospectus Supplement, the "Prospectus"), relating to the
registration and offering by the Company of 18,000,000 shares (the
“Firm Shares”) and up to 2,700,000 additional shares
(the “Additional Shares,” and together with the Firm
Shares, collectively, the “Shares”) of the
Company’s Class B Common Stock, par value $0.001 per share
(the “Class B Common Stock”), pursuant to that certain
Underwriting Agreement (the “Underwriting Agreement”),
dated January 10, 2020, among the Company, on the one hand, and
National Securities Corporation, as representative of the several
underwriters named in Schedule 1-A to the Underwriting Agreement
(the “Underwriters”), on the other hand.
This
opinion is being furnished in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act in
connection with the filing of the Registration Statement. All
capitalized terms used herein and not otherwise defined shall have
the respective meanings given to them in the
Prospectus.
In
connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the
Registration Statement and exhibits thereto, including the
Prospectus; (ii) the Articles of Incorporation of the Company, as
amended, as currently in effect; (iii) the Amended Bylaws of the
Company, as amended, as currently in effect; (iv) the Underwriting
Agreement and (v) certain resolutions and minutes of meetings of
the Board of Directors of the Company relating to (A) the issuance
and sale of the Shares, (B) the specimen of Class B Common
Stock certificate, and (C) other related matters. For the purpose
of rendering this opinion, we have made such factual and legal
examinations as we deemed necessary under the circumstances, and in
that connection therewith we have examined, among other things,
originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates of
public officials, certificates of officers or other representatives
of the Company, and other instruments and have made such inquiries
as we have deemed appropriate for the purpose of rendering this
opinion.
RumbleOn,
Inc.
January
16, 2020
Page
2
In our
examination, we have assumed without independent verification the
legal capacity of all natural persons, the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents
submitted to us as facsimile, electronic, certified, conformed or
photostatic copies, and the authenticity of the originals of such
copies. In making our examination of executed documents, we have
assumed that the parties thereto, other than the Company, had the
power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and the execution and
delivery by such parties of such documents and the validity and
binding effect thereof on such parties. Our opinions are subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity). As to any facts material to the
opinions expressed herein which were not independently established
or verified, we have relied upon oral or written statements and
representations of officers or other representatives of the Company
and others.
On the
basis of, and in reliance on, the foregoing examination and subject
to the assumptions, exceptions, qualifications and limitations
contained herein, we are of the opinion that the Shares to be
issued and sold by the Company under the Underwriting Agreement
have been duly authorized, and when the Shares are delivered to and
paid for by the Underwriters in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid and
nonassessable.
We
render this opinion only with respect to the general corporate law
of the State of Nevada as set forth in Chapter 78 of the Nevada
Revised Statutes. We neither express nor imply any obligation with
respect to any other laws or the laws of any other jurisdiction or
of the United States. For purposes of this opinion, we assume that
the Shares will be issued in compliance with all applicable state
securities or blue sky laws.
We
assume no obligation to update or supplement this opinion if any
applicable laws change after date of this opinion or if we become
aware after the date of this opinion of any facts, whether existing
before or arising after the date hereof, that might change the
opinions expressly so stated. Without limiting the generality of
the foregoing, we neither express nor imply any opinion regarding
the contents of the Registration Statement, other than as expressly
stated herein with respect to the Shares.
We are
opining only as to matters expressly set forth herein, and no
opinion should be inferred as to any other matters. This opinion is
rendered as of the date hereof and is based upon currently existing
statutes, rules, regulations and judicial decisions. We disclaim
any obligation to advise you of any change in any of these sources
of law or subsequent legal or factual developments that affect any
matters or opinions set forth herein.
We
hereby consent to the filing of this opinion letter with the
Commission as an exhibit to the Current Report on Form 8-K dated
the date hereof filed by the Company. We also consent to the
reference to our firm under the heading “Legal Matters”
in the Prospectus Supplement. In giving such consent, we do not
thereby concede that we are included in the category of persons
whose consent is required under Section 7 of the Securities Act or
the rules and regulations of the Commission promulgated
thereunder.
Very
truly yours,
/s/
Snell & Wilmer L.L.P.
Exhibit 10.1
FORM
OF
NOTE
EXCHANGE & SUBSCRIPTION AGREEMENT
January
10, 2020
RumbleOn,
Inc.
1350
Lakeshore Drive, Suite 160
Coppell,
Texas 75019
Attention:
Chief Financial Officer
Re:
Exchange
and Subscription for RumbleOn, Inc. Convertible Senior Notes due
2025
Ladies
and Gentlemen:
RumbleOn,
Inc., a Nevada corporation, (the “Company”), is offering a new
series of 6.75% Convertible Senior Notes due 2025 (the
“New Notes”).
The New Notes will be convertible into cash, shares
(“Underlying
Shares”) of Class B common stock of the Company, par
value $0.001 per share (“Common Stock”), or a combination
thereof, at the Company’s election. The New Notes will be
issued pursuant to an Indenture, to be dated as of the Closing Date
(as defined below), between the Company and Wilmington Trust, N.A.,
as trustee (the “Trustee”), the form of which is
attached hereto as Exhibit
E (the “Indenture”).
The
undersigned (the “Investor”), for itself and, in
relation to the New Notes Offering (as defined below), on behalf of
the accounts (if any) listed on Exhibit A and Exhibit B hereto (the
“Accounts” and,
collectively with the Investor, the “Purchasers”), agrees
to:
(1)
tender the
Company’s existing 6.75% Convertible Senior Notes due 2024
(CUSIP 781386 AA5 and ISIN: US781386AA56) (the “Old Notes”) for an amount of New
Notes determined as set forth herein (the “Exchange”); and
(2)
subscribe for and
purchase from the Company New Notes for cash (the
“Subscription”
and, together with the Exchange, the “New Notes Offering”),
in each
case, pursuant and subject to the terms and conditions set forth in
this agreement (this “Agreement”).
The
Investor and each Account understands that the New Notes Offering
is being made without registration under the Securities Act of
1933, as amended (the “Securities Act”), or any
securities laws of any state of the United States or of any other
jurisdiction, and that the New Notes Offering is only being made to
investors who are both “accredited investors” (as
defined in Rule 501 of Regulation D under the Securities Act) and
“qualified institutional buyers” (as defined in Rule
144A under the Securities Act) in reliance upon one or more
exemptions from registration under the Securities Act.
The
holders of the New Notes will be entitled to the benefits of a
registration rights agreement, to be dated as of the Closing Date,
the form of which is attached hereto as Exhibit F (the
“Registration Rights
Agreement”), between the Company and the Investors,
pursuant to which the Company will agree to file one or more
registration statements with the U.S. Securities and Exchange
Commission (the “Commission”) providing for the
registration under the Securities Act of the resale of the New
Notes and the Underlying Shares. This Agreement, the Indenture, the
New Notes and the Registration Rights Agreement are referred to
herein collectively as the “Transaction
Documents.”
Concurrently
with the New Notes Offering, the Company is selling, in a
transaction registered under the Securities Act, shares of Common
Stock (the “Concurrent Common
Stock Offering”), and the Company is amending and
exchanging certain of its outstanding subordinated secured
promissory notes in an aggregate principal amount of $2.0 million
to extend the maturity of a portion of such notes (the
“Concurrent
Investor Note
Exchange”). The net proceeds of the Concurrent Common
Stock Offering, less commissions to the placement agent and
estimated expenses payable by the Company, are expected to be at
least $10 million. As contemplated by Section 7(b) of this Agreement, the
New Notes Offering is contingent upon completion of the Common
Stock Offering.
1.
The Exchange. Subject to the
terms and conditions of this Agreement, the Purchasers hereby
tender, assign and transfer to the Company all right, title and
interest in the aggregate principal amount (the “Exchanged Principal Amount”) of
Old Notes set forth in column 2 of Exhibit A hereto (such
principal amount of Old Notes, the “Exchanged Old Notes”) in exchange
for New Notes having an aggregate principal amount, for each
Purchaser, equal to the product of (x) the Exchange Ratio, as set
forth in Exhibit A
and (y) the Exchanged Principal Amount of Exchanged Old Notes for
such Purchaser, rounded to the nearest integral multiple of $1,000
in principal amount, if applicable, as set forth in column 4 of
Exhibit A hereto
(such aggregate principal amount of New Notes, as so rounded, if
applicable, the “Exchanged
New Notes”), and the Company agrees to issue such
Exchanged New Notes to the Purchasers in exchange for such
Exchanged Old Notes. For the avoidance of doubt, the Company will
make separate cash payment in respect of rounded amounts or
interest, if any, accrued and unpaid to the Closing Date (as
defined below) for the Exchanged Old Notes. Subject to the terms
and conditions of this Agreement, the Investor, on behalf of itself
and each Account, hereby (a) waives any and all other rights
with respect to such Exchanged Old Notes, and (b) releases and
discharges the Company from any and all claims the Investor and
each Account may now have, or may have in the future, arising out
of, or related to, such Exchanged Old Notes.
2.
The Subscription. Subject to
the terms and conditions of this Agreement, the Purchasers hereby
agree to purchase from the Company, and the Company hereby agrees
to issue and sell to the Investor and/or any such Account, New
Notes (the “Purchased New
Notes”) having an aggregate principal amount as set
forth in column 2 of Exhibit B hereto (the
“Purchased Principal
Amount”), for an aggregate purchase price in cash in
respect of such Purchased New Notes as set forth in column 3 of
Exhibit B (such
aggregate cash purchase price, the “Cash Purchase
Price”).
3.
The Closing. The closing of the
New Notes Offering (the “Closing”) shall take place at the
offices of Akerman LLP, 350 East Las Olas Boulevard, Fort
Lauderdale, Florida 33301 at 10:00 a.m., New York City time, on
January 14, 2020 or, subject to the immediately succeeding
sentence, at such other time and place as the Company may designate
by notice to the Investor (the “Closing Date”).
4.
Closing Mechanics.
(a)
The Depository
Trust Company (“DTC”) will act as securities
depositary for the New Notes.
(b)
At or prior to the
times set forth in the Exchange/Subscription Procedures set forth
in Exhibit C hereto
(the “Exchange/Subscription
Procedures”), the Investor, on behalf of itself and/or
any other Account, shall:
(ii)
transfer the Cash
Purchase Price by wire in immediately available funds to the
account of the Company designated in the Exchange/Subscription
Procedures.
(c)
On the Closing
Date, subject to satisfaction of the conditions precedent specified
in Section 7 hereof, and the prior
receipt by the Trustee from each Purchaser of the Exchanged Old
Notes to be tendered by such Purchaser and the prior receipt by the
Company of the Cash Purchase Price from such
Purchaser:
(i)
the Company shall
execute and deliver the Indenture; and
(ii)
the Company shall
execute, cause the Trustee to authenticate and cause to be
delivered to the DTC account(s) specified by the Investor or the
relevant Account in Exhibit D hereto, the Exchanged
New Notes and the Purchased New Notes.
All
questions as to the form of all documents and the validity and
acceptance of the Old Notes and the New Notes will be determined in
good faith by the Company.
(a)
Organization. The Company and each of
the subsidiaries of the Company set forth in the SEC Reports
(defined below) (the “Subsidiaries”) is an entity duly
incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use
its properties and assets and to carry on its business as described
in the SEC Reports. Neither the Company nor any Subsidiary is in
violation nor default of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of the Company and the
Subsidiaries is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the
case may be, could not have or reasonably be expected to result in
a material adverse effect on (i) the legality, validity or
enforceability of any Transaction Document, (ii) the results of
operations, assets, business, prospects or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole,
or (iii) on the Company’s ability to perform in any material
respect on a timely basis its obligations under any Transaction
Document (a “Material Adverse
Effect”).
(b)
Due Authorization. The Company has the
requisite corporate power and authority to enter into and to
consummate the transactions contemplated by each of the Transaction
Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly
authorized by all necessary action on the part of the Company and
no further action is required by the Company, the board of
directors of the Company (the “Board of Directors”) or the
Company’s stockholders in connection herewith or therewith
other than in connection with the Required Approvals (as defined
below). This Agreement, the Indenture and each other Transaction
Document to which the Company is a party has been (or upon delivery
will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability
may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting
creditors’ rights generally and by general equitable
principles (regardless of whether such enforceability is considered
in a proceeding in equity or at law) (collectively, the
“Enforceability
Exceptions”).
(c)
New Notes. The Company has all
requisite corporate power and authority to execute, issue, sell and
perform its obligations under the New Notes. The New Notes have
been duly authorized and, at the Closing Date, will have been duly
executed by the Company and, when authenticated, issued and
delivered in the manner provided for in the Indenture and delivered
in the Exchange and the Subscription as provided in this Agreement,
will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture, enforceable against the
Company in accordance with their terms, except as the enforcement
thereof may be limited by the Enforceability Exceptions, and will
be in the form contemplated by, and entitled to the benefits of,
the Indenture.
(d)
Underlying Shares. The maximum number
of Underlying Shares initially issuable upon conversion of the New
Notes (assuming settlement solely in shares of Common Stock and
taking into account the maximum make-whole adjustment under the
Indenture) have been duly and validly authorized and reserved for
by the Company and, when issued upon conversion of the New Notes in
accordance with the terms of the New Notes, will be validly issued,
fully paid and non-assessable, and the issuance of any Underlying
Shares will not be subject to any preemptive or similar
rights.
(e)
Exemption from Registration. Assuming
the accuracy of the representations and warranties of the Investor
and each other investor executing an Agreement, (1) each of
the issuance of the Exchanged New Notes in connection with the
Exchange and the issuance of the Purchased New Notes in connection
with the Subscription, as the case may be, pursuant to this
Agreement is exempt from the registration requirements of the
Securities Act; and (2) the Indenture is not required to be
qualified under the Trust Indenture Act of 1939, as
amended.
(f)
New Class. The New Notes, when issued,
will not be of the same class as securities listed on a national
securities exchange registered under Section 6 of the
Securities Exchange Act of 1934, as amended (the
“Exchange Act”),
or quoted in a U.S. automated inter-dealer quotation system, within
the meaning of Rule 144A(d)(3)(i) under the Securities
Act.
(g)
No Conflicts. The execution, delivery
and performance by the Company of each of the Transaction
Documents, and the consummation by it of the transactions
contemplated thereby, including the offer and sale of the New Notes
and the Underlying Shares do not and will not (i) conflict with or
violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws
or other organizational or charter documents, (ii) conflict with,
or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation
of any lien upon any of the properties or assets of the Company or
any Subsidiary, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or
other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the
Company or any Subsidiary is bound or affected, or (iii) subject to
the Required Approvals, conflict with or result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which
the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not have or
reasonably be expected to result in a Material Adverse
Effect.
(h)
Conduct of Business. Since December 31,
2018, except as has been publicly disclosed in the SEC Reports and
except for the Concurrent Common Stock Offering, the Company has
conducted its business in the ordinary course materially consistent
with past practice. Since December 31, 2018, there has not been any
Material Adverse Effect with respect to the Company or any of its
Subsidiaries nor has there occurred any event that is reasonably
likely to result in a Material Adverse Effect with respect to the
Company or any of its Subsidiaries.
(i)
Filings, Consents and Approvals. The
Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing
or registration with, any court or other federal, state, local or
other governmental authority or other person in connection with the
execution, delivery and performance by the Company of the
Transaction Documents, the consummation by the Company of the
transactions contemplated thereby, including the offer and sale of
the New Notes and the Underlying Shares, in each case other than:
(i) the filings required pursuant to Section 8 of this Agreement, (ii)
application(s) to The Nasdaq Stock Market LLC (“Nasdaq”) for the listing of the
Underlying Shares for trading thereon in the time and manner
required thereby, and (iii) such filings as are required to be made
under applicable state securities laws (collectively, the
“Required
Approvals”).
(j)
Capitalization. The capitalization of
the Company is as set forth in the SEC Reports, except to the
extent affected by the Concurrent Common Stock Offering and the
Concurrent Note Exchange. Except as contemplated by the Concurrent
Common Stock Offering, the Company has not issued any capital stock
since its most recently filed periodic report under the Exchange
Act, other than pursuant to the vesting and delivery of awards
under the Company’s employee equity plans outstanding as of
the date of the most recently filed periodic report under the
Exchange Act. No person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents. All
issued and outstanding securities of the Company issued prior to
the transactions contemplated by this Agreement have been duly
authorized and validly issued and are fully paid and
non-assessable; the holders thereof have no rights of rescission
with respect thereto, and are not subject to personal liability by
reason of being such holders; and none of such securities were
issued in violation of the preemptive rights of any holders of any
security of the Company or similar contractual rights granted by
the Company. The offers and sales of the outstanding shares of
Class A Common Stock and Common Stock were at all relevant times
either registered under the Securities Act and the applicable state
securities or “blue sky” laws or, based in part on the
representations and warranties of the purchasers of such shares of
Class A Common Stock and Common Stock, exempt from such
registration requirements.
(k)
SEC Reports. Since January 9, 2017, the
Company has filed all reports, schedules, forms, statements and
other documents required to be filed by the Company under the
Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”), on a timely basis
or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied
in all material respects with the requirements of the Securities
Act and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(l)
Financial Statements. The financial
statements, including the notes thereto and supporting schedules,
included in the SEC Reports, fairly present the financial position
and the results of operations of the Company at the dates and for
the periods to which they apply; and such financial statements have
been prepared in conformity with U.S. generally accepted accounting
principles (“GAAP”), consistently applied
throughout the periods involved (provided that unaudited interim
financial statements are subject to year-end audit adjustments that
are not expected to be material in the aggregate and do not contain
all footnotes required by GAAP). All disclosures contained in the
SEC Reports regarding “non-GAAP financial measures” (as
such term is defined by the rules and regulations of the
Commission), if any, comply with Regulation G of the Exchange Act
and Item 10 of Regulation S-K of the Securities Act, to the extent
applicable. The SEC Reports disclose all material off-balance sheet
transactions, arrangements, obligations (including contingent
obligations), and other relationships of the Company with
unconsolidated entities or other persons that may have a material
current or future effect on the Company’s financial
condition, changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources, or significant
components of revenues or expenses. Except as disclosed in the SEC
Reports, (a) the Company has not incurred any material liabilities
or obligations, direct or contingent, or entered into any material
transactions other than in the ordinary course of business, (b) the
Company has not declared or paid any dividends or made any
distribution of any kind with respect to its capital stock, (c)
there has not been any change in the capital stock of the Company,
or, other than in the course of business, any grants under any
stock compensation plan, and (d) there has not been any material
adverse change in the Company’s long-term or short-term
debt.
(m)
Disclosure Controls. The Company
maintains disclosure controls and procedures as required by Rule
13a-15 or 15d-15 under the Exchange Act. Such disclosure controls
and procedures are effective to ensure that all information
required to be disclosed by the Company is recorded and reported on
a timely basis to the individuals responsible for the preparation
of the SEC Reports and other public disclosure documents. The
Company maintains systems of “internal control over financial
reporting” (as defined under Rules 13a-15 and 15d-15 under
the Exchange Act Regulations) that comply with the requirements of
the Exchange Act and have been designed by, or under the
supervision of, its principal executive and principal financial
officers, or persons performing similar functions. Such systems of
internal control over financial reporting are effective in
providing reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with GAAP and include policies and
procedures that provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. No attorney representing the Company or
any of its Subsidiaries, whether or not employed by the Company or
any of its Subsidiaries, has reported evidence of a violation of
securities laws, breach of fiduciary duty or similar violation by
the Company or any of its officers, directors, employees or agents
pursuant to the rules adopted pursuant to Section 307 of the
Sarbanes-Oxley Act.
(n)
Internal Controls. The Company has
disclosed, based on the most recent evaluation by its chief
executive officer and its chief financial officer prior to the date
hereof, to the Company’s auditors and the Audit Committee of
Board of Directors (i) any significant deficiencies in the design
or operation of its internal controls over financial reporting that
are reasonably likely to adversely affect the Company’s
ability to record, process, summarize and report financial
information and has identified for the Company’s auditors and
Audit Committee of the Board of Directors any material weaknesses
in internal control over financial reporting and (ii) any fraud,
whether or not material, that involves management or other
employees who have a significant role in the Company’s
internal control over financial reporting. No material complaints
from any source regarding accounting, internal accounting controls
or auditing matters, and no concerns from the Company’s
employees regarding questionable accounting or auditing matters,
have been received by the Company or, to the knowledge of the
Company, the Company’s independent registered public
accounting firm.
(o)
Nasdaq Compliance. The Company is in
compliance in all material respects with the applicable listing and
corporate governance rules and regulations of Nasdaq. From January
1, 2017 through the date hereof, the Company has not received any
comment letter from the Commission or the staff thereof or, except
as disclosed in the SEC Reports, any correspondence from the Nasdaq
or the staff thereof relating to the delisting or maintenance of
listing of Common Stock on Nasdaq, other than such disclosures or
documents that can be obtained on the Commission’s website at
www.sec.gov. No approval of the stockholders of the Company under
the rules and regulations of Nasdaq (including Rule 5635 of the
Nasdaq Marketplace Rules) is required to issue and deliver the New
Notes to the Purchasers or the Underlying Securities upon the
conversion of the New Notes.
(p)
Investment Company. The Company is not,
and is not an Affiliate of, and immediately after receipt of
payment for the New Notes, will not be or be an Affiliate of, an
“investment company” within the meaning of the
Investment Company Act of 1940, as amended. The Company shall
conduct its business in a manner so that it will not become an
“investment company” subject to registration under the
Investment Company Act of 1940, as amended.
(q)
Information Provided. The Company
confirms that, to its knowledge, with the exception of the proposed
sale of the New Notes under this Agreement and the Transaction
Documents relating hereto, neither the Company nor any other
persons acting on its behalf has provided any of the Investors or
their agents or counsel with any information that constitutes or
might constitute material, nonpublic information. The Company
further confirms that until public disclosure of the events
described above, the Investors will be restricted by the insider
trading prohibitions under the Exchange Act from trading or
“tipping” on the basis of such
information.
(r)
Intellectual Property. The Company owns
or possesses or has valid rights to use all patents, trademarks,
service marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses, trade secrets and similar
rights (“Intellectual
Property Rights”), if any, necessary for the conduct
of the business of the Company as currently carried on and as
described in the SEC Reports. To the knowledge of the Company, no
action or use by the Company necessary for the conduct of its
business as currently carried on and as described in the SEC
Reports will involve or give rise to any infringement of, or
license or similar fees for, any Intellectual Property Rights of
others. Except as would not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect, the
Company has not received any notice alleging any such infringement,
fee or conflict with asserted Intellectual Property Rights of
others. Except as would not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect (A)
to the knowledge of the Company, there is no infringement,
misappropriation or violation by third parties of any of the
Intellectual Property Rights owned by the Company; (B) there is no
pending or, to the knowledge of the Company, threatened action,
suit, proceeding or claim by others challenging the rights of the
Company in or to any such Intellectual Property Rights, and the
Company is unaware of any facts which would form a reasonable basis
for any such claim, that would, individually or in the aggregate,
together with any other claims in this Section 5(r), reasonably be expected
to result in a Material Adverse Effect; (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 by a court of competent jurisdiction invalid
or unenforceable, in whole or in part, and there is no pending or,
to the Company’s knowledge, threatened action, suit,
proceeding or claim by others challenging the validity or scope of
any such Intellectual Property Rights, and the Company is unaware
of any facts which would form a reasonable basis for any such claim
that would, individually or in the aggregate, together with any
other claims in this Section 5(r), reasonably be expected
to result in a Material Adverse Effect; (D) there is no pending or,
to the Company’s knowledge, 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, the Company has not
received any written notice of such claim and the Company is
unaware of any other facts which would form a reasonable basis for
any such claim that would, individually or in the aggregate,
together with any other claims in this Section 5(r), reasonably be expected
to result in a Material Adverse Effect; and (E) to the
Company’s knowledge, no employee of the Company is in
violation in any material respect of any term of any employment
contract, patent disclosure agreement, invention assignment
agreement, non-competition agreement, non-solicitation agreement,
nondisclosure agreement or any restrictive covenant to or with a
former employer where the basis of such violation relates to such
employee’s employment with the Company, or actions undertaken
by the employee while employed with the Company and could
reasonably be expected to result, individually or in the aggregate,
in a Material Adverse Effect. To the Company’s knowledge, all
material trade secrets developed by and belonging to the Company
which have not been patented have been kept confidential. The
Company is not a party to or bound by any options, licenses or
agreements with respect to the Intellectual Property Rights of any
other person or entity that are required to be set forth in the SEC
Reports and are not described therein. None of the technology
employed by the Company has been obtained or is being used by the
Company in violation of any contractual obligation binding on the
Company or, to the knowledge of the Company, any of its officers,
directors or employees, or otherwise in violation of the rights of
any persons.
(s)
Registration Rights of Third Parties.
Except (i) pursuant to that certain registration rights
agreement, dated May 14, 2019, between the Company and JMP
Securities LLC, and (ii) as has been publicly disclosed in the
SEC Reports, no holders of any securities of the Company or any
rights exercisable for or convertible or exchangeable into
securities of the Company have the right to require the Company to
(i) register the sale or resale of any such securities of the
Company under the Securities Act (other than pursuant to the
Registration Rights Agreement), (ii) include any such securities in
a registration statement to be filed by the Company (including any
registration statement required to be filed pursuant to the
Registration Rights Agreement, other than the holders of the New
Notes) or (iii) register the resale of any securities of the
Company held by such persons, or that such persons may acquire upon
the exercise or conversion of any other securities of the Company
or pursuant to the prospectus as part of the Concurrent Common
Stock Offering.
(t)
No Integration. Neither the Company nor
any of its affiliates has, directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated
in respect of, any security (as defined in the Securities Act),
that is or will be integrated with the Exchange or the Subscription
in a manner that would require registration of the Securities under
the Securities Act.
(u)
Litigation; Governmental Proceedings.
There is no action, suit, proceeding, inquiry, arbitration,
investigation, litigation or governmental proceeding pending or, to
the Company’s knowledge, threatened against, or involving the
Company which (i) has not been disclosed in the SEC Reports and, if
resolved adversely to the Company, is reasonably likely to result
in a Material Adverse Effect or (ii) adversely affects or
challenges the legality, validity or enforceability of any of the
Transaction Documents, the New Notes or the Underlying
Shares.
(a)
The Investor is a
corporation, limited partnership, limited liability company or
other entity, as the case may be, duly formed, validly existing and
in good standing under the laws of the jurisdiction of its
formation.
(b)
The Investor has
full power and authority to tender, assign and transfer the
Exchanged Old Notes in exchange for the Exchanged New Notes
pursuant to this Agreement and to enter into this Agreement and
perform all obligations required to be performed by the Investor
hereunder. If the Investor is executing this Agreement on behalf of
an Account, (i) the Investor has all requisite authority to enter
into this Agreement on behalf of, and, bind, each Account to the
terms of this Agreement, (ii) Exhibit A hereto is a true,
correct and complete list of (A) the name of each Purchaser and (B)
the principal amount of each Purchaser's Exchanged Old Notes and
(iii) Exhibit B
hereto is a true, correct and complete list of each Purchaser and
the aggregate principal amount of Purchased New Notes each such
Purchaser agrees to purchase hereunder.
(c)
Each Purchaser
participating in the Exchange is the current beneficial owner of
the Exchanged Old Notes. When the Exchanged Old Notes are
exchanged, the Company will acquire good, marketable and
unencumbered title thereto, free and clear of all liens,
restrictions, charges, encumbrances, adverse claims, rights or
proxies.
(d)
Participation in
the New Notes Offering will not contravene (1) any law, rule
or regulation binding on the Investor or any investment guideline
or restriction applicable to the Investor (or, if applicable, any
Account) and (2) the charter or bylaw (or equivalent
organizational documents) of the Investor (or, if applicable, any
Account).
(e)
The Investor (or
applicable Account) is a resident of the jurisdiction set forth in
Exhibit D and,
unless otherwise set out in Exhibit A and Exhibit B hereto is not
acquiring the Exchanged New Notes or the Purchased New Notes,
respectively, as a nominee or agent or otherwise for any other
person.
(f)
The Investor has
received a copy of the Transaction Documents. The Investor
acknowledges that: (1) no person has been authorized to give any
information or to make any representation concerning the New Notes
Offering or the Company or any of its subsidiaries, other than as
contained in this Agreement or the Transaction Documents or in the
information (i) contained in the Company’s periodic and
current reports filed by the Company with the Commission or (ii)
given by the Company’s duly authorized officers and employees
in connection with the Investor’s examination of the Company
and its subsidiaries and the terms of the New Notes Offering; and
(2) the Company and its subsidiaries do not take any responsibility
for, and cannot provide any assurance as to the reliability of, any
other information that may have been provided to the
Investor.
(g)
The Investor
understands and accepts that acquiring the New Notes in the New
Notes Offering involves risks, including those risks set forth in
the SEC Reports. The Investor has such knowledge, skill and
experience in business, financial and investment matters that the
Investor is capable of evaluating the merits and risks of the New
Notes Offering and an investment in the New Notes. With the
assistance of its own professional advisors (to the extent the
Investor has deemed appropriate), the Investor has made its own
legal, tax, accounting and financial evaluation of the merits and
risks of an investment in the New Notes and the consequences of the
New Notes Offering and this Agreement. The Investor has considered
the suitability of the New Notes as an investment in light of its
own circumstances and financial condition, and the Investor is able
to bear the risks associated with an investment in the New
Notes.
(h)
The Investor
confirms that it is not relying on any communication (written or
oral) of the Company or any of its agents or affiliates as
investment advice or as a recommendation to participate in the New
Notes Offering and receive the New Notes pursuant to the terms
hereof. It is understood that information provided in the
Transaction Documents, or by the Company or any of its agents or
affiliates, shall not be considered investment advice or a
recommendation with respect to the New Notes Offering, and that
neither the Company nor any of its agents or affiliates is acting
or has acted as an advisor to the Investor in deciding whether to
participate in the New Notes Offering.
(i)
The Investor
confirms that the Company has not (1) given any guarantee or
representation as to the potential success, return, effect or
benefit (either legal, regulatory, tax, financial, accounting or
otherwise) of an investment in the New Notes; or (2) made any
representation to the Investor regarding the legality of an
investment in the New Notes under applicable investment guidelines,
laws or regulations. In deciding to participate in the New Notes
Offering, the Investor is not relying on the advice or
recommendations of the Company, and the Investor has made its own
independent decision that the investment in the New Notes is
suitable and appropriate for the Investor.
(j)
The Investor is a
sophisticated participant in the transactions contemplated hereby
and has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an
investment in the New Notes, is experienced in investing in capital
markets and is able to bear the economic risk of an investment in
the New Notes. The Investor is familiar with the business and
financial condition and operations of the Company and its
subsidiaries and has conducted its own investigation of the Company
and its subsidiaries and the New Notes and has consulted with its
own advisors concerning such matters and shall be responsible for
making its own independent investigation and appraisal of the
transactions contemplated hereby. The Investor has had access to
the Company filings with the Commission and such other information
concerning the Company and its subsidiaries and the New Notes as it
deems necessary to enable it to make an informed investment
decision concerning the New Notes Offering. The Investor has been
offered the opportunity to ask questions of the Company and its
representatives and has received answers thereto as the Investor
deems necessary to enable it to make an informed investment
decision concerning the New Notes Offering and the New
Notes.
(k)
The Investor
understands that no federal, state, local or foreign agency has
passed upon the merits or risks of an investment in the New Notes
or made any finding or determination concerning the fairness or
advisability of such investment.
(l)
The Investor is an
“accredited investor” as defined in Rule 501(a) under
the Securities Act and a “qualified institutional
buyer” as defined in Rule 144A under the Securities Act. The
Investor agrees to furnish any additional information reasonably
requested by the Company or any of its affiliates to assure
compliance with applicable U.S. federal and state securities laws
in connection with the New Notes Offering.
(m)
The Investor is not
directly, or indirectly through one or more intermediaries,
controlling or controlled by, or under direct or indirect common
control with, the Company and is not, and has not been for the
immediately preceding three months, an “affiliate”
(within the meaning of Rule 144 under the Securities Act) of the
Company.
(n)
The Investor is
acquiring the New Notes solely for the Investor’s own
beneficial account, or for an account with respect to which the
Investor exercises sole investment discretion, for investment
purposes, and not with a view to, or for resale in connection with,
any distribution of the New Notes that is impermissible under
applicable law. The Investor understands that the offer and sale of
the New Notes have not been registered under the Securities Act or
any state securities laws by reason of specific exemptions under
the provisions thereof that depend in part upon the investment
intent of the Investor and the accuracy of the other
representations made by the Investor in this
Agreement.
(o)
The Investor
understands that the Company is relying upon the representations
and agreements contained in this Agreement (and any supplemental
information) for the purpose of determining whether the
Investor’s participation in the New Notes Offering meets the
requirements for the exemptions referenced in Section 6(n) above.
(p)
The Investor
acknowledges that the New Notes have not been registered under the
Securities Act. As a result, until registered under the Securities
Act, the New Notes may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons,
except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act as
described in the Indenture, and the Investor hereby agrees that it
will not sell the New Notes other than in compliance with such
transfer restrictions. Further, the Investor acknowledges that the
New Notes will initially be issued pursuant to a restricted CUSIP
number.
(q)
The Investor
acknowledges that the terms of the New Notes Offering have been
mutually negotiated between the Investor and the Company. The
Investor was given a meaningful opportunity to negotiate the terms
of the New Notes Offering.
(r)
The Investor will,
upon request, execute and deliver any additional documents,
information or certifications reasonably requested by the Company,
the Trustee to complete the New Notes Offering.
(s)
The Investor
understands that, unless the Investor notifies the Company in
writing to the contrary before the Closing, each of the
Investor’s representations and warranties contained in this
Agreement will be deemed to have been reaffirmed and confirmed as
of the Closing, taking into account all information received by the
Investor.
(t)
The Investor
acknowledges that it had a sufficient amount of time to consider
whether to participate in the New Notes Offering and that the
Company has not placed any pressure on the Investor to respond to
the opportunity to participate in the New Notes Offering. The
Investor acknowledges that it did not become aware of the New Notes
Offering through any form of general solicitation or advertising
within the meaning of Rule 502 under the Securities
Act.
(u)
The operations of
the Investor have been conducted in material compliance with the
rules and regulations administered or conducted by the U.S.
Department of Treasury Office of Foreign Assets Control
(“OFAC”)
applicable to the Investor. The Investor has performed due
diligence necessary to reasonably determine that its (or, where
applicable, the Accounts’) beneficial owners are not named on
the lists of denied parties or blocked persons administered by
OFAC, resident in or organized under the laws of a country that is
the subject of comprehensive economic sanctions and embargoes
administered or conducted by OFAC (“Sanctions”), or otherwise the
subject of Sanctions.
(a)
The satisfaction at
or prior to the Closing of the condition precedent that the
representations and warranties of the Company on the one hand, and
of the Investor on the other contained in Sections 5 and 6, respectively, shall be
true and correct as of the Closing in all material respects with
the same effect as though such representations and warranties had
been made as of the Closing.
(c)
The maximum number
of Underlying Shares initially issuable upon conversion of the New
Notes (assuming settlement solely in shares of Common Stock and
taking into account the maximum make-whole adjustment under the
Indenture) have been approved for listing on Nasdaq.
(d)
Solely as to the
obligations of the Investor:
i.
The execution and
delivery of the Registration Rights Agreement by the Company and
the execution and delivery by the Company and the Trustee of the
Indenture.
ii.
The delivery to the
Investor of a certificate of the chief financial officer or chief
accounting officer of the Company and one additional senior
executive officer of the Company confirming that the
representations and warranties of the Company in this Agreement are
true and correct as of the Closing Date and that the Company has
complied with all agreements and satisfied all conditions on their
part to be performed or satisfied hereunder at or prior to the
Closing Date.
iii.
The delivery to the
Investor of an opinion from (x) Akerman LLP (or if Akerman LLP is
unable to issue such an opinion, of another nationally recognized
law firm proposed by the Company that is reasonably acceptable to
the Investor), and (y) Snell & Wilmer L.L.P., Nevada counsel
for the Company, in each case, dated as of the Closing Date and in
form and substance reasonably satisfactory to the
Investor.
iv.
The payment of fees
of counsel of King & Spalding LLP as contemplated by that Fee
Letter, dated January 5, 2020, between the Company and King &
Spalding LLP.
v.
From the date
hereof to the Closing Date, trading in the Common Stock shall not
have been suspended by the Commission or Nasdaq, and, at any time
prior to the Closing Date, trading in securities generally as
reported by Bloomberg L.P. shall not have been suspended or
limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on Nasdaq,
nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have
occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its
effect on, or any material adverse change in, any financial market
which, in each case, in the reasonable judgment of the Investor,
makes it impracticable or inadvisable to proceed with the
Closing
8.
Covenant and Acknowledgment of the
Company. At or prior to 9:00 a.m., New York City time, on
the first business day after the date hereof, the Company shall
issue a press release announcing the New Notes Offering, which
press release the Company acknowledges and agrees will disclose all
confidential information communicated by or on behalf of the
Company to the Investor in connection with the New Notes Offering
to the extent such confidential information constitutes material
non-public information. Notwithstanding the foregoing, the Company
shall not publicly disclose the name of the Investor, any of its
Accounts, or their respective affiliates and investment advisors,
or include the name of the Investor, any of its Accounts, or their
respective affiliates and investment advisors in any press release
or in any filing with the Commission or any regulatory agency or
trading market, without the prior written consent of the Investor,
except (i) as required by the federal securities laws in connection
with the transaction contemplated hereby, and (ii) to the extent
such disclosure is required by law, at the request of the Staff of
the Commission, any representative of Nasdaq or any other
regulatory agency, in which case the Company shall, to the extent
practicable, provide the Investor with prior written notice of such
disclosure.
9.
Integration. The Company shall
not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of
the Securities Act) that would be integrated with the offer or sale
of the New Notes or the Underlying Shares in a manner that would
require the registration under the Securities Act of the sale of
the Shares or that would be integrated with the offer or sale of
the Shares for purposes of the rules and regulations of any trading
market on which the Common Stock is listed such that it would
require shareholder approval prior to the closing of such other
transaction unless shareholder approval is obtained before the
closing of such subsequent transaction.
10.
Covenant of the Investor. No
later than one (1) business day after the date hereof, the Investor
agrees to deliver settlement instructions for each Purchaser to the
Company substantially in the form of Exhibit D hereto.
11.
Waiver, Amendment. Neither this
Agreement nor any provisions hereof shall be modified, changed,
discharged or terminated except by an instrument in writing, signed
by the party against whom any waiver, change, discharge or
termination is sought.
12.
Assignability. Neither this
Agreement nor any right, remedy, obligation or liability arising
hereunder or by reason hereof shall be assignable by the Company or
the Investor without the prior written consent of the other
party.
13.
Taxation. The Investor
acknowledges that, if the Investor (or any Account) is a United
States person for U.S. federal income tax purposes, either
(1) the Company must be provided with a correct taxpayer
identification number (“TIN”), generally a person’s
social security or federal employer identification number, and
certain other information on Internal Revenue Service
(“IRS”) Form
W-9, which is provided as an attachment hereto, and a
certification, under penalty of perjury, that such TIN is correct,
that the Investor (or such Account) is not subject to backup
withholding and that the Investor is a United States person, or
(2) another basis for exemption from backup withholding must
be established. The Investor further acknowledges that, if the
Investor (or any Account) is not a United States person for U.S.
federal income tax purposes, (1) the Company must be provided
the appropriate IRS Form W-8 signed under penalties of perjury,
attesting to that non-U.S. Investor’s foreign status, and
(2) the Investor (or such Account) may be subject to U.S.
federal withholding or U.S. federal backup withholding tax on
certain payments made to the Investor (or such Account) unless the
Investor (or such Account) properly establishes an exemption from,
or a reduced rate of, withholding or backup
withholding.
14.
Waiver of Jury Trial. EACH OF
THE COMPANY AND THE INVESTOR (FOR ITSELF AND, IF APPLICABLE, ON
BEHALF OF EACH ACCOUNT) IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
15.
Governing Law. THIS AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICT OF LAW PRINCIPLES THAT WOULD RESULT IN THE
APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW
YORK.
16.
Submission to Jurisdiction.
Each of the Company and the Investor (for itself and, if
applicable, on behalf of each Account) (a) agrees that any
legal suit, action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby shall be
instituted exclusively in the courts of the State of New York
located in the City and County of New York or in the United States
District Court for the Southern District of New York;
(b) waives any objection that it may now or hereafter have to
the venue of any such suit, action or proceeding; and
(c) irrevocably consents to the jurisdiction of the aforesaid
courts in any such suit, action or proceeding. Each of the Company
and the Investor (for itself and, if applicable, on behalf of each
Account) agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law.
17.
Venue. Each of the Company and
the Investor (for itself and, if applicable, on behalf of each
Account) irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement
in any court referred to in Section 16. Each of the Company and
the Investor (for itself and, if applicable, on behalf of each
Account) irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
18.
Service of Process. Each of the
Company and the Investor (for itself and, if applicable, on behalf
of each Account) irrevocably consents to service of process in the
manner provided for notices in Section 21. Nothing in this
Agreement will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
19.
Section and Other Headings. The
section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
20.
Counterparts.
This Agreement may be executed by one or more of the parties hereto
in any number of separate counterparts (including by facsimile or
other electronic means, including telecopy, email or otherwise),
and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. Delivery of an executed
signature page of this Agreement by facsimile or other transmission
(e.g., “pdf” or “tif” format)
shall be effective as delivery of a manually executed counterpart
hereof.
21.
Notices. All notices and other
communications to the Company provided for herein shall be in
writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, return receipt
requested, postage prepaid to the following addresses, or, in the
case of the Investor or any Account, the address provided in
Exhibit D (or such
other address as either party shall have specified by notice in
writing to the other):
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If to
the Company:
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RumbleOn,
Inc.
901 W.
Walnut Hill Lane
Irving,
Texas 75038
Attention:
Chief Financial Officer
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In each
case, with a copy to (which shall not constitute
notice):
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Akerman
LLP
350 E.
Las Olas Boulevard
Fort
Lauderdale, FL 33301
Attn:
Michael Francis; Christina Russo
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22.
Binding Effect. The provisions
of this Agreement shall be binding upon and accrue to the benefit
of the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns.
23.
Notification of Changes. The
Investor (for itself and, if applicable, on behalf of each Account)
hereby covenants and agrees to notify the Company upon the
occurrence of any event prior to the Closing that would cause any
representation, warranty, or covenant of the Investor (and/or such
Account) contained in this Agreement to be false or incorrect in
any material respect.
24.
Severability. If any term or
provision (in whole or in part) of this Agreement is invalid,
illegal or unenforceable in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other term or
provision of this Agreement or invalidate or render unenforceable
such term or provision in any other jurisdiction.
[Signature
Pages Follow]
IN WITNESS WHEREOF, the Investor (for itself and, if
applicable, on behalf of each Account) has executed this Agreement
as of the date first written above.
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Legal
Name of Executing Investor:
___________________________
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By:
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[Signature Page to
Agreement]
IN WITNESS WHEREOF, the Investor (for itself and, if
applicable, on behalf of each Account) has executed this Agreement
as of the date first written above.
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___________________________
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By:
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___________________________
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By:
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___________________________
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By:
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[Signature
Page to Agreement]
ACCEPTED AND AGREED:
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RUMBLEON,
INC.
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By:
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[Signature Page to
Agreement]
EXHIBIT A
The Exchange Ratio: 1.0
EXHIBIT B
EXHIBIT C
NOTICE OF EXCHANGE/SUBSCRIPTION PROCEDURES
Attached
are Exchange/Subscription Procedures for the settlement of the
RumbleOn, Inc. (the “Company”) exchange and
subscription of its Convertible Senior Notes due 2025 (the
“New Notes”)
pursuant to the Agreement, dated as of January 10, 2020, between
you and the Company which is expected to occur on or about January
14, 2020. To ensure timely settlement, please follow the
instructions for exchanging your existing RumbleOn, Inc.’s
6.75% Convertible Senior Notes due 2024 (the “Old Notes”) and subscribing for
New Notes as set forth on the following page.
These instructions supersede any prior instructions you received.
Your failure to comply with the attached instructions may delay
your receipt of the New Notes.
If you
have any questions, please contact Nathan Plotkin at
(860) 251-5320.
Thank
you.
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Delivery of Old Notes
You must direct the
eligible DTC participant through which you hold a beneficial
interest in the Old Notes to post on January 14, 2020, no later than 9:00 a.m.,
New York City time, one-sided withdrawal instructions
through DTC via DWAC for transfer to Wilmington Trust, National
Association, the aggregate principal amount1 of Exchanged Old
Notes (CUSIP 781386 AA5 / ISIN: US781386AA56) set forth in column 2
of Exhibit A
(“Aggregate Principal Amount of Exchanged Old Notes”)
of the Agreement.
It
is important that this instruction be submitted and the DWAC posted
on January 14, 2020, no later than 9:00 a.m., New York City
time.
To receive New Notes
You must direct
your eligible DTC participant through which you wish to hold a
beneficial interest in the New Notes to post and accept on January
14, 2020, no later than 9:00 a.m., New York City time, a one-sided
deposit instruction through DTC via DWAC from Wilmington Trust,
National Association for the aggregate principal amount2 of Exchanged New
Notes (CUSIP/ISIN #781386 AB3 / US781386AB30) set forth in column 4
of Exhibit A
(“Aggregate Principal Amount of Exchanged New Notes”)
of the Agreement.
It
is important that this instruction be submitted and the DWAC posted
on January 14, 2020, no later than 9:00 a.m., New York City
time.
AND
1.
No later than 11:00 a.m., New York City time, on January 14
2020, you must pay the Cash Purchase Price set forth in
column 3 of Exhibit
B3
(“Cash Purchase Price”) of the Agreement by wire
transfer in immediately available funds to the following account of
the Company:
Beneficiary
Financial Center Name and Address:
______________________
______________________
______________________
Account
Holder/Beneficiary: __________
Beneficiary Account
Name: ___________
Beneficiary Account
Number: _________
ABA/Routing Number:
______________
You must complete
ALL steps described above in
order to complete the exchange of Old Notes for New
Notes.
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1 Note that the
DWAC instruction should specify the principal amount, not the
number, of Exchanged Old Notes.
2 Note that the
DWAC instruction should specify the principal amount, not the
number, of New Notes.
3 The Cash
Purchase Price is the amount of cash that you must wire to the
Company in connection with your purchase of New Notes.
EXHIBIT D
Purchaser Settlement Details
These settlement instructions are to be delivered to the Company
for each Purchaser no later than one (1) business day after the
date of the Agreement.
Name of
Purchaser:
Purchaser
Address:
Telephone:
Email
Address:
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SETTLEMENT
On
January 14, 2020, after the Company receives your Old Notes and
your Cash Purchase Price and your delivery instructions as set
forth above, and subject to the satisfaction of the conditions to
closing as set forth in your Agreement, the Company will deliver
your New Notes in accordance with the delivery instructions set
forth above.
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Country of
Residence:
Taxpayer
Identification Number:
Exchanged Old Notes
DTC Participant
Number:
DTC Participant
Name:
DTC Participant
Phone Number:
DTC Participant
Contact Email:
FFC Account #:
Account # at
Bank/Broker:
Exchanged New Notes (if different from Exchanged Old
Notes)
DTC Participant
Number:
DTC Participant
Name:
DTC Participant
Phone Number:
DTC Participant
Contact Email:
FFC Account #:
Account # at Bank/Broker:
EXHIBIT E
Indenture
See
Exhibit 4.1 to the Form 8-K.
EXHIBIT F
Registration Rights Agreement
See Exhibit 4.3 to the Form 8-K.
Exhibit 10.2
FORM
OF
JOINDER AND AMENDMENT TO EXCHANGE
AND SUBSCRIPTION AGREEMENT
This
JOINDER AND AMENDMENT (the “Amendment”) to the
EXCHANGE AND SUBSCRIPTION AGREEMENT, dated as of January 10, 2020
(the “Agreement”), as
amended from time to time by and among RUMBLEON, INC. (the
“Company”) and
___________________________
, ___________________________
, and ___________________________
, (each, an “Investor”) is
entered into and shall be effective as of January 13, 2020 (the
“Effective Date”), among each
Investor, ___________________________
.. (the “New
Investor”) and the Company (referred individually as
“Party” and
collectively as “Parties”).
WITNESSETH:
WHEREAS, the
Company and the Investors entered into the Agreement pursuant to
which the Investors (i) will tender their existing 6.75%
Convertible Senior Notes due 2024 (CUSIP 781386 AA5 and ISIN:
US781386AA56) (the “Old Notes”) for an amount of New
Notes determined as set forth in the Agreement and (ii) subscribed
for and will purchase from the Company New Notes for cash;
and
WHEREAS, the
Company and the Investors now wish to revise and update the
Agreement as of the Effective Date to add the New Investor and
amend certain terms as set forth below;
NOW,
THEREFORE, in consideration of the mutual agreements herein
contained, the receipt and legal sufficiency of which is hereby
acknowledged, the Parties agree as follows:
1.
Definitions. Terms defined in
the Agreement shall, except to the extent that the context
otherwise requires, bear the same respective meanings in this
Amendment.
2.
Amendments. The Agreement shall
be amended as follows:
a.
Section 5(s) shall
be deleted in its entirety and replaced with the
following:
Registration Rights of Third Parties.
Except (i) pursuant to that certain registration rights
agreement, dated May 14, 2019, between the Company and JMP
Securities LLC (“JMP Securities LLC Registration Rights
Agreement”), and (ii) as has been publicly disclosed in
the SEC Reports, no holders of any securities of the Company or any
rights exercisable for or convertible or exchangeable into
securities of the Company have the right to require the Company to
(i) register the sale or resale of any such securities of the
Company under the Securities Act (other than pursuant to the
Registration Rights Agreement), (ii) include any such securities in
a registration statement to be filed by the Company (including any
registration statement required to be filed pursuant to the
Registration Rights Agreement, other than the holders of the New
Notes) or (iii) register the resale of any securities of the
Company held by such persons, or that such persons may acquire upon
the exercise or conversion of any other securities of the Company
or pursuant to the prospectus as part of the Concurrent Common
Stock Offering. Company hereby represents and warrants that any
rights under the JMP Securities LLC Registration Rights Agreement
are not in conflict or inconsistent with any registration rights
granted to holders of the New Notes.
b.
Section 6(u) shall
be deleted in its entirety and replaced with the
following:
The
operations of the Investor have been conducted in material
compliance with the rules and regulations administered or conducted
by the U.S. Department of Treasury Office of Foreign Assets Control
(“OFAC”)
applicable to the Investor. The Investor, or its delegates have
performed due diligence necessary to reasonably determine that its
(or, where applicable, the Accounts’) investors are not named
on the lists of denied parties or blocked persons administered by
OFAC, resident in or organized under the laws of a country that is
the subject of comprehensive economic sanctions and embargoes
administered or conducted by OFAC (“Sanctions”), or otherwise the
subject of Sanctions.
c.
Section 8 shall be
deleted in its entirety and replaced with the
following:
Covenant and Acknowledgment of the
Company. At or prior to 9:00 a.m., New York City time, on
the first business day after the date hereof, the Company shall
issue a press release or file with the Commission a Current Report
on Form 8-K announcing the New Notes Offering and disclosing all
material terms of the transaction contemplated by this Agreement as
well as any material non-public information, which press release
the Company acknowledges and agrees will disclose all confidential
information communicated by or on behalf of the Company to the
Investor in connection with the New Notes Offering and any
transaction contemplated by this Agreement. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of the
Investor, any of its Accounts, or their respective affiliates and
investment advisors, or include the name of the Investor, any of
its Accounts, or their respective affiliates and investment
advisors in any press release or in any filing with the Commission
or any regulatory agency or trading market, without the prior
written consent of the Investor, except (i) as required by the
federal securities laws in connection with the transaction
contemplated hereby, and (ii) to the extent such disclosure is
required by law, at the request of the Staff of the Commission, any
representative of Nasdaq or any other regulatory agency, in which
case the Company shall, to the extent practicable, provide the
Investor with prior written notice of such disclosure.
d.
Exhibit A of the
Agreement shall be deleted in its entirety and replaced with
Exhibit A attached hereto.
e.
Exhibit B of the
Agreement shall be deleted in its entirety and replaced with
Exhibit B attached hereto.
f.
Except as expressly
provided herein, no other changes or modifications to the Agreement
are intended or implied, and in all other respects the Agreement is
hereby specifically ratified, restated and reaffirmed by the
Parties.
3.
Representations. Each party
represents to the other parties that all representations contained
in the Agreement are true and accurate as of the date of this
Amendment, and that such representations are deemed to be given or
repeated by each Party, as the case may be, on the date of this
Amendment.
4.
Integration/Effect of
Amendment. This Amendment and any instrument and agreements
delivered pursuant hereto constitute the entire agreement of the
Parties with respect to the subject matter hereof and thereof, and
supersede all prior oral and written communications with respect to
the subject matter hereof and thereof. To the extent that any
provision of the Agreement is inconsistent with the provisions of
this Amendment, the provisions of this Amendment shall
control.
5.
Governing Law. This Amendment
shall be construed in accordance with and governed by the laws of
the State of New York excluding any principles of conflicts of law
or other rule of law that would cause the application of the law of
any jurisdiction other than the laws of the State of New
York.
6.
Counterparts. This Amendment
may be executed in any number of counterparts and any such
counterpart shall be deemed an original, but all such counterparts
shall constitute one and the same agreement.
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IN
WITNESS WHEREOF, the parties hereto have entered into this
Amendment as of the date set forth above.
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RUMBLEON,
INC.
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___________________________
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___________________________
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___________________________
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EXHIBIT A
The Exchange Ratio: 1.0
EXHIBIT B
Exhibit 10.3
FORM OF
NOTE EXCHANGE AGREEMENT
THIS NOTE EXCHANGE
AGREEMENT (this
“Agreement”) is dated as of January 14, 2020 (the
“Closing
Date”), between RumbleOn,
Inc., a Nevada corporation (the “Company”), and ___________
(the “Holder”) and relates to the proposed exchange of
that certain promissory note, dated ___________,
payable by the Company to the Holder (the
“Note”),
which Note is attached hereto as Exhibit
A, for a new note
substantially in the form attached
hereto as Exhibit B
(“New Note”);
Recitals
WHEREAS, the principal and accrued interest from January
1, 2020 due under the terms of the Note as of the Closing Date is
$___________
(the “Outstanding
Amount”);
WHEREAS, the Note is set to mature on March 31, 2020 (the
“Maturity
Date”);
and
WHEREAS, the parties wish to cancel the Note in exchange
for the New Note for the Outstanding Amount, substantially
in the form attached hereto as Exhibit B.
NOW, THEREFORE,
in consideration of the foregoing and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby agreed and acknowledged, the
parties hereto hereby agree as follows:
1. Securities
Exchange.
(a)
Upon the following terms and subject
to the conditions contained herein, the Holder agrees to deliver to
the Company the Note in exchange for the New Note and the Company
agrees to deliver to the Holder the New Note.
(b)
The execution and delivery of this
Agreement by the parties hereto and the closing under this
Agreement (the “Closing”) shall occur upon execution of this
Agreement and the delivery of the Note to the Company for
cancellation. At Closing, (i) the New Note issued in exchange for
cancellation of the Note shall be deemed the full and final
consideration for the cancellation of the Note, and the Note shall
thereby be fully satisfied, terminated and of no further force and
effect without any further action by any party; and (ii) all
security interests and other liens of every type at any time
granted to or held by the Holder as security for the indebtedness
evidenced by the Note shall be terminated and automatically
released without further action by the Holder.
2. Waiver.
The Holder hereby irrevocably waives the provisions set forth in
the Note such that: (i) the Company will not incur any penalty or
premium by the exchange of the Note for the New Note; (ii) the
Company will not be obligated or required to pay any further
interest accrued under the terms of the Note; and (iii) and the
Holder will accept the New Note, rather than cash, as full
satisfaction of the Company’s obligations under the
Note.
3. Representations,
Warranties and Covenants of the Holder. The Holder hereby makes the following
representations and warranties to the Company, and covenants for
the benefit of the Company.
(a)
This Agreement has been duly
authorized, validly executed and delivered by the Holder and is a
valid and binding agreement and obligation of the Holder
enforceable against the Holder in accordance with its terms,
subject to limitations on enforcement by general principles of
equity and by bankruptcy or other laws affecting the enforcement of
creditors’ rights generally, and the Holder has the power and
authority to execute and deliver this Agreement and documents
contemplated hereby and to perform its obligations hereunder and
thereunder.
(b)
The Holder did not receive any other
form of additional consideration in connection with the issuance of
the New Note.
(c)
The Holder understands that the New
Note is being offered and sold in reliance on specific provisions
of federal and state securities laws and that the Company is
relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the
Holder set forth herein for purposes of qualifying for exemptions
from registration under the Securities Act of 1933, as amended (the
“Securities
Act”), and applicable
state securities laws.
(d)
The Holder owns and holds,
beneficially and of record, the entire right, title, and interest
in and to the Note free and clear of all rights and Encumbrances
(as defined below) other than restrictions under the Securities Act
and other applicable federal and state securities laws. The Holder
has full power and authority to transfer and dispose of the Note
free and clear of any right or Encumbrance other than restrictions
under the Securities Act and other applicable federal and state
securities laws. Other than the transactions contemplated by this
Agreement, there is no pending proposal, or other right of any
person to acquire all or any of portion of the Note.
“Encumbrances”
shall mean any security or other property interest or right, claim,
lien, pledge, option, charge, security interest, contingent or
conditional sale, or other title claim or retention agreement
interest or other right or claim of third parties, whether
perfected or not perfected, voluntarily incurred or arising by
operation of law, and including any agreement (other than this
Agreement) to grant or submit to any of the foregoing in the
future.
(e)
The Holder is an “accredited
investor” as defined under Rule 501 of Regulation D
promulgated under the Securities Act, with sufficient knowledge and
experience in financial matters as to be capable of evaluating the
risks and merits of the transaction contemplated
hereby.
(f)
The Holder is acquiring the New Note
for the Holder’s own account, for investment purposes, and
not with a view to any resale or distribution in whole or in part,
in violation of the Securities Act or any applicable securities
laws; provided, however, that by making the representations herein, the
Holder does not agree to hold the New Note for any minimum or other
specific term and reserves the right to dispose of any shares of
the Company’s Class B Common Stock, $0.001 par value,
issuable upon conversion of the New Note
(“Conversion
Shares”) at any time in
accordance with federal and state securities laws applicable to
such disposition.
(g)
The Holder understands that the
Conversion Shares are “restricted securities,” as that
term is defined in the Securities Act and the rules thereunder,
have not been registered under the Securities Act, and that none of
the Conversion Shares can be sold or transferred unless they are
first registered under the Securities Act and such state and other
securities laws as may be applicable or an exemption from
registration under the Securities Act is available (and then the
Conversion Shares may be sold or transferred only in compliance
with such exemption and all applicable state and other securities
laws).
(h)
No person or entity, other than the
Company, has been authorized to give any information or to make any
representation on behalf of the Company in connection with the New
Note, and if given or made, such information or representations
have not been relied upon by the Holder as having been made or
authorized by the Company. The only representations and warranties
made by the Company in connection with the New Note are those
contained in this Agreement, and the only information made
available by the Company in connection with the New Note is
contained in this Agreement.
4. Representations,
Warranties and Covenants of the Company. The Company represents and warrants to the
Holder, and covenants for the benefit of the Holder, as
follows:
(a)
The Company has been duly incorporated
and is validly existing and in good standing under the laws of the
state of Nevada, with full corporate power and authority to own,
lease and operate its properties and to conduct its business as
currently conducted.
(b)
This Agreement has been duly
authorized, validly executed and delivered on behalf of the Company
and is a valid and binding agreement and obligation of the Company
enforceable against the Company in accordance with its terms,
subject to limitations on enforcement by general principles of
equity and by bankruptcy or other laws affecting the enforcement of
creditors’ rights generally, and the Company has full
corporate power and authority to execute and deliver this Agreement
and the other agreements and documents contemplated hereby and to
perform its obligations hereunder and
thereunder.
(c)
The Company covenants and agrees that
promptly following the Closing, the Note will be cancelled and
retired by the Company.
5. Fees and
Expenses. Each party hereto
shall pay the fees and expenses of its advisors, counsel,
accountants and other experts, if any, and all other expenses,
incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this
Agreement.
6. Waiver of
Interest. In addition to the
waiver of any and all further accrued interest under Section 2 of
this Agreement, the Holder hereby irrevocably waives any and all
claims, demands, suits, actions, causes of action and rights
whatsoever at law or in equity, now existing or arising relating to
any further accrued and unpaid interest on the Note or any other
agreement between the parties. The Holder hereby acknowledges and
agrees that it shall not commence or prosecute in any way, or cause
to be commenced or prosecuted, any action in any court relating to
such accrued and unpaid interest.
7. Governing Law; Consent
to Jurisdiction. This Agreement
shall be governed by and interpreted in accordance with the laws of
the State of Nevada without giving effect conflicts of law
principles that would result in the application of the substantive
laws of another jurisdiction. EACH PARTY WAIVES ITS RIGHT TO A
TRIAL BY JURY.
8. Entire
Agreement. This Agreement
constitutes the entire understanding and agreement of the parties
with respect to the subject matter hereof and supersedes all prior
and/or contemporaneous oral or written proposals or agreements
relating thereto all of which are merged herein. This Agreement may
not be amended or any provision hereof waived in whole or in part,
except by a written amendment signed by all of the parties
hereto.
9. Counterparts.
This Agreement may be executed by facsimile signature or electronic
PDF signature and in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
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IN
WITNESS WHEREOF, this Agreement was duly executed on the date first
written above.
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RUMBLEON,
INC.
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By:
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Marshall
Chesrown
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Chief Executive
Officer
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By:
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Name:
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Title:
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EXHIBIT A
The Note
(see attached)
EXHIBIT B
New Note
See Exhibit 10.4 to the Form 8-K.
Exhibit 10.4
FORM OF
SENIOR SECURED CONFESSED JUDGMENT PROMISSORY NOTE
THIS
NOTE AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH SECURITIES UNDER THE
ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
$___________ January
14, 2020 (“Effective
Date”)
IMPORTANT NOTICE
THIS INSTRUMENT CONTAINS A CONFESSION OF JUDGMENT PROVISION WHICH
CONSTITUTES A WAIVER OF IMPORTANT RIGHTS YOU MAY HAVE AS A DEBTOR
AND ALLOWS THE CREDITOR TO OBTAIN A JUDGMENT AGAINST YOU WITHOUT
ANY FURTHER NOTICE.
FOR VALUE
RECEIVED, the undersigned,
RumbleOn, Inc., a Nevada corporation (“Borrower”),
does hereby promise to pay to the order of ___________
(“Lender”),
on January 31, 2021 (the “Maturity
Date”), or such earlier
time as provided herein, the principal sum of
______________________ Dollars ($___________) (the
“Principal
Amount”), in lawful money
of the United States of America, together with any unpaid, accrued
interest (“Interest”)
thereon, on the terms and conditions set forth in this Senior
Secured Confessed Judgment Promissory Note (this
“Note”).
1. Interest.
From the Effective Date through and until the Maturity Date,
Interest shall accrue on the outstanding and unpaid Principal
Amount at the rate of 10.0% per annum. Interest shall be computed
on the basis of a 365-day year for the actual number of days in the
interest period. All accrued Interest shall be paid to Lender
quarterly in arrears on the last day of each of the Company's
fiscal quarters beginning on March 30, 2020, and, if applicable, on
the Maturity Date.
2. Maturity
Date. Borrower will repay the
outstanding Principal Amount, together with any accrued and unpaid
Interest thereon, in one lump sum on the Maturity
Date.
3. Prepayment.
The Principal Amount and any Interest accrued thereon may be
prepaid by Borrower at any time prior to the Maturity Date without
premium or penalty.
4. Application
of Payments. All payments made
under this Note shall be applied first to late penalties or other
sums owed to the holder of this Note, next to accrued interest, if
any, and then to the Principal Amount.
5. Conversion.
(a) At
any time prior to and including the Maturity Date, any Interest and
Principal Amount due under the Note shall be convertible into
shares of the Borrower’s Class B
Common Stock, par value $0.001 per share (“Conversion
Shares”) at a conversion price of $3.00 per share (a
“Conversion”) at the Lender's option.
(b) In the event that
any Conversion of this Note in whole or in part into Class B Common
Stock is not permitted under applicable law, rule, regulation or
stock exchange requirement or would result in the issuance of any
fraction of a share of Class B Common Stock, the Borrower shall not
be obligated to issue such shares or fraction of a share of Common
Stock but shall promptly pay to the Lender in cash the amount of
the Note otherwise to be satisfied by such shares or fraction of a
share of Class B Common Stock.
(c) Subject to Section
5(a) above, the Borrower shall at all times cause to be reserved
for issuance such number of authorized and unissued shares of
Common Stock as shall be sufficient for conversion of this Note.
The Borrower (i) covenants to instruct its transfer agent to issue
certificates for the Common Stock issuable upon conversion of this
Note and (ii) agrees that its issuance of this Note shall
constitute full authority to its officers and agents who are
charged with the duty of executing stock certificates to execute
and issue the necessary certificates for shares of Class B Common
Stock in accordance with the terms and conditions of this
Note.
(d) Any certificates
issued in exchange for, or in substitution or upon conversion of
this Note, shall bear the following legend:
“THE
SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR UNDER ANY APPLICABLE STATE SECURITIES LAW AND MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO A VALID EXEMPTION UNDER SUCH ACT AS EVIDENCED IN AN
OPINION OF COUNSEL TO RUMBLEON, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.”
6. Adjustments
for Certain Structural Events.
(a) Splits
and Combinations. If the
Borrower combines its outstanding equity securities into a smaller
number of equity securities, the conversion price in effect
immediately before the combination will be proportionately
increased, as of the effective date of the combination, as follows:
(i) the number of Conversion Shares issuable to the Lender
hereunder immediately before the effective date of the combination
will be adjusted so that the Lender, if the Note is converted on or
after that date, will receive the number of Conversion Shares that
the Lender would have owned and been entitled to receive as a
result of the combination had the Note been converted immediately
before that date; and (ii) the conversion price in effect
immediately before such adjustment will be adjusted by multiplying
the conversion price by a fraction, the numerator of which is the
aggregate number of Conversion Shares issuable to the Lender upon
conversion of this Note immediately before such adjustment, and the
denominator of which is the aggregate number of Conversion Shares
issuable to the Lender upon conversion of this Note immediately
thereafter. If the Borrower subdivides its outstanding equity
securities, the number of Conversion Shares issuable upon
Conversion hereunder will be proportionally increased and the
conversion price in effect before the subdivision will be
proportionately decreased, as of the effective date of the
subdivision, as follows: (A) the number of Conversion Shares
issuable to the Lender upon the conversion of this Note immediately
before the effective date of the subdivision will be adjusted so
that the Lender, if converted on or after that date, will receive
the number of Conversion Shares that the Lender would have owned
and been entitled to receive as a result of the subdivision had the
Note been converted immediately before that date; and (B) the
conversion price in effect immediately before the adjustment will
be adjusted by multiplying the conversion price by a fraction, the
numerator of which is the aggregate number of Conversion Shares
issuable to the Lender upon Conversion of this Note immediately
before such adjustment, and the denominator of which is the
aggregate number of Conversion Shares issuable to the Lender upon
Conversion of this Note immediately thereafter.
(b) Reorganization,
Recapitalization, Merger. If
there occurs any reorganization, recapitalization,
reclassification, merger, or statutory conversion to another form
of business entity involving the Borrower in which the equity
securities of the Borrower are converted into or exchanged for
other securities (other than a transaction covered by Section 6(a),
then Lender will receive upon conversion of this Note, in lieu of
the Conversion Shares of the Borrower immediately theretofore
issuable upon conversion of this Note, for the aggregate conversion
price in effect prior thereto, the kind and amount of other
securities receivable upon such reorganization, recapitalization,
reclassification, merger, or statutory conversion to another form
of business entity, by the holders of the number of Conversion
Shares of the Borrower for which this Note could have been
converted immediately prior to such reorganization,
recapitalization, reclassification, merger, or statutory conversion
to another form of business entity.
7.
Default.
If (1) Borrower shall fail to pay the then unpaid Principal Amount
on the Maturity Date or any Interest accrued thereon when due, (2)
Borrower shall fail to perform, observe or comply with any other obligation under
this Note, which failure is not cured promptly but in no case more
than fifteen (15) days after written notice to Borrower, except
that in the event Borrower is unable to complete the cure within
the fifteen (15) day period, the cure period shall be extended if
Borrower has commenced the cure within fifteen (15) days and is
diligently pursuing the cure; in no event, however, shall the cure
period exceed thirty (30) days from the date of Lender’s
notice, unless Lender and Borrower mutually agree to an extension
of the cure period, (3) Borrower shall fail to perform, observe or
comply with any other obligation under the Security Agreement
attached hereto and incorporated herein by reference
as
Exhibit A and executed on the date
hereof by the Borrower in favor of the Lender (the “Security
Agreement”), which failure is not cured promptly but in no
case more than fifteen (15) days after written notice to Borrower,
except that in the event Borrower is unable to complete the cure
within the fifteen (15) day period, the cure period shall be
extended if Borrower has commenced the cure within fifteen (15)
days and is diligently pursuing the cure; in no event, however,
shall the cure period exceed thirty (30) days from the date of
Lender’s notice, unless Lender and Borrower mutually agree to
an extension of the cure period, (4) Borrower is acquired in a
merger, consolidation, transfer of all or substantially all of its
assets, or enters into any other strategic transaction with a third
party(ies) pursuant to which Borrower assigns to the third
party(ies) the right to use all of the assets of Borrower in
exchange for payments, or (7) Borrower shall commence a voluntary
case concerning itself under Title 11 of the United States Code
entitled “Bankruptcy,” as now or hereafter in effect,
or any successor thereto (the “Bankruptcy
Code”); or an involuntary
case is commenced against Borrower under the Bankruptcy Code, and
the petition is not controverted within 30 days, or is not
dismissed within 90 days, after commencement of the case; or a
trustee or custodian is appointed for, or takes charge of, all or
substantially all of the property of Borrower, or Borrower
commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to Borrower, or there
is commenced against Borrower any such proceeding which remains
undismissed for a period of 90 days, or Borrower is adjudicated
insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or Borrower makes
a general assignment for the benefit of creditors (any of the
events referred to in Section 7 (1) – (7) above being
referred to herein as a “Default”); then Lender, by
written notice to Borrower, may declare the unpaid Principal Amount
and any accrued Interest thereon to be, and the same shall
thereupon become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are
hereby waived by Borrower, and Interest on the unpaid Principal
Amount shall thereafter accrue at the rate of fifteen percent (15%)
per annum.
8. Security.
As
security for the prompt payment and complete performance of
Borrower of its obligations under this Note, Borrower has executed
and delivered to the Lender on the date hereof the Security
Agreement.
9.
Subordination.
(a) Notwithstanding
anything to the contrary set forth in this Note, all of the
obligations under this Note ("Subordinated
Obligations") shall at all
times and in all respects be subordinate and junior in right of
payment to all Senior Debt (defined below), and for so long as any
Senior Debt shall be outstanding, Borrower shall not be obligated
to make any payments otherwise required hereunder if the Borrower
is then in default under any agreements evidencing and securing the
Senior Debt ("Senior Debt
Documents") or the payment
would cause the Borrower to be in default under the Senior Debt
Documents. For purposes of this Note, "Senior
Debt" shall mean any other
indebtedness of the Borrower as defined under United States
Generally Accepted Accounting Principles, as in effect on the date
hereof, that is secured by any assets of the Borrower, and that is
(i) indebtedness for borrowed money or indebtedness evidenced by
notes, bonds or similar instruments, related to any term loan,
revolving credit financing, working capital financing, floor plan
financing or real estate financing, and (ii) purchase money
indebtedness and capital leases, in the case of (i) or (ii),
whether now existing or entered into
after the date hereof.
(b) The
security interest granted under the Security Agreement (the
“Security Interest”) shall be subordinated for all
purposes and in all respects to the liens and security interests
securing any Senior Debt, regardless of the time, manner or order
of perfection of any such liens and security
interests.
(c) Promptly
upon Borrower's request, Lender will from time to time execute and
deliver a subordination agreement on the terms consistent with this
Section 9 and reasonably requested by any holder of any Senior Debt
(or any agent for such holders), including but not limited to
subordination provisions providing for "deep subordination" of this
Note, the Subordinated Obligations and the Security Interest to any
Senior Debt; provided that the provisions of such subordination
agreement shall not expand the limitations on Borrower's payment
obligations set forth in the first sentence of Section
9(a), that is, those provisions shall not restrict a
payment by Borrower to Lender in a manner that is not otherwise
contemplated by the first sentence of Section 9(a). Lender shall
also agree to provide any requested UCC amendment subordinating any
of its collateral that is subject to the security interest of any
holder of Senior Debt.
(d) The
subordination, agreements and priorities set forth in this Section
9 shall remain in full force and effect until this Note shall have
been indefeasibly paid in full (regardless of whether or not any
Senior Debt shall be outstanding), and in the event the Lender is
required to return to any party funds or other property that Lender
receives from Borrower or any of its respective affiliates in
respect of the Subordinated Obligations, the Lender shall not have
been deemed to have waived its rights to payment in full under this
Note, provided that the provisions of this Section 9 shall apply to
such rights to payment of the Lender and to the continuing
obligations of the Borrower in respect thereof (which for all
purposes shall continue to be Subordinated Obligations hereunder),
and Lender agrees to be bound thereby.
10. CONFESSION
OF JUDGMENT. UPON A DEFAULT OF
THIS NOTE, THE BORROWER AUTHORIZES ANY ATTORNEY ADMITTED TO
PRACTICE BEFORE ANY COURT OF RECORD IN THE UNITED STATES, INCLUDING
GLENN D. SOLOMON, AS THE BORROWER’S TRUE AND LAWFUL
ATTORNEY-IN-FACT, WITH FULL POWER AND AUTHORITY FOR THE BORROWER,
IN THE BORROWER’S NAME, PLACE AND STEAD, ON BORROWER’S
BEHALF, TO WAIVE THE ISSUANCE AND SERVICE OF PROCESS AND CONFESS
JUDGMENT AGAINST THE BORROWER, IN THE FULL AMOUNT THEN DUE UNDER
THIS NOTE, INCLUDING ANY EXPENSES OF COLLECTION, PLUS REASONABLE
ATTORNEYS’ FEES. THE AUTHORITY AND POWER TO APPEAR FOR AND
ENTER JUDGMENT AGAINST THE BORROWER SHALL NOT BE EXTINGUISHED BY
ANY JUDGMENT ENTERED PURSUANT THERETO; SUCH AUTHORITY AND POWER MAY
BE EXERCISED ON ONE OR MORE OCCASIONS FROM TIME TO TIME, IN THE
SAME OR DIFFERENT JURISDICTIONS, AS OFTEN AS THE HOLDER OF THIS
NOTE SHALL DEEM NECESSARY OR ADVISABLE UNTIL ALL SUMS DUE UNDER
THIS NOTE HAVE BEEN PAID IN FULL.
11. No
Waiver or Modification Except in Writing. No failure on the part of Lender to exercise,
and no delay in exercising, any right, remedy, or power under this
Note or under any other document or agreement executed in
connection with this Note shall operate as a waiver thereof. This
Note may not be amended or modified orally, nor may any right or
provision hereof be waived orally, but only by an instrument in
writing signed by the party against which enforcement of such
amendment, modification or waiver is sought.
12. Waiver
of Presentment. Borrower hereby
waives presentment for payment, protest and notice of maturity or
non-payment.
13. Severability.
If any provision of this Note is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this
Note will remain in full force and effect. Any provision of this
Note held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or
unenforceable. The parties consent to the reformation of any
invalid or unenforceable provision so that it is enforceable to the
maximum extent permitted by law.
14. Notices.
All notices, requests, consents, demands, and other communications
under this Note shall be in writing and shall be delivered either
(a) via hand delivery; (b) via facsimile to the recipient’s
number (with a confirmation copy delivered via reputable airborne
carrier); or (c) via reputable airborne carrier (e.g., Federal
Express or DHL). Notice shall be deemed delivered when actually
received by the intended recipient. All notices shall be addressed
to such address as any party may indicate for itself by written
notice to the other party.
15. Assignments.
The Lender shall not assign or transfer any claim, or suffer or
permit the creation or attachment of any lien, claim, encumbrance,
hypothecation or pledge upon any claim, with respect to the
Subordinated Obligations, unless such assignment or transfer is
made expressly subject to this Note, and Lender agrees to provide
to any holder of Senior Debt (or its agents) written confirmation
from any such assignee or transferee of receipt of, and agreement
to be bound by, this Note. Any assignee or pledgee of this Note
shall promptly deliver to Borrower a written acknowledgement of the
subordination provisions contained in Section 9 of this Note and
its obligation to comply therewith. In the event one or more
subordination agreements are in effect, any assignee or pledgee of
this Note shall promptly execute a joinder to or an acknowledgement
of such subordination agreement(s) in the form reasonably
acceptable to the Senior Lender(s) party to such subordination
agreement(s).
16. Governing
Law. This Note shall be
governed by and construed in accordance with the laws of the State
of Maryland.
17. Consent
to Jurisdiction. Each of
Borrower and Lender submits to the exclusive jurisdiction of any
state or federal court within the State of Maryland in any action
or proceeding arising out of or relating to this Agreement and
agrees that all claims in respect of the action or proceeding shall
be exclusively heard and determined in any such court. The parties
hereby irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have
to the laying of venue of any such dispute brought in such court.
Each of the Parties waives any defense of inconvenient forum to the
maintenance of any action or proceeding so
brought.
18. WAIVER
OF JURY TRIAL: EACH PARTY
HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS NOTE OR THE SUBJECT MATTER
HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS NOTE,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS
SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND
THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY
HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.
19. Facsimile
Signature. The execution of
this Note by Borrower and the delivery to Lender of a facsimile or
PDF copy of such executed Note shall be effective to obligate
Borrower hereunder for all purposes and such facsimile or PDF copy
shall be deemed to be an original for all
purposes.
20. Usury
Laws. It is the intention of
the parties to conform strictly to all applicable usury laws now or
hereafter in force, and if the interest imposed hereunder is in
excess of the maximum legal amount allowed under the applicable
usury laws as now or hereafter construed by the courts having
jurisdiction over such matters (the “Usury Laws’) any
Interest payable under this Note shall be subject to reduction to
the amount equal to the maximum legal amount allowed under the
Usury Laws. The aggregate of all interest (whether designated as
interest, service charges, points, or otherwise) contracted for,
chargeable, or receivable under this Note shall under no
circumstances exceed the maximum legal rate upon the unpaid
principal balance of this Note remaining unpaid. If such interest
does exceed the maximum legal rate, it shall be deemed a mistake
and such excess shall be canceled automatically and, if theretofore
paid, rebated to Borrower or credited on the unpaid Principal
Amount, or if this Note has been repaid, then such excess shall be
rebated to Borrower.
21. Expenses
of Collection. Upon a Default,
this Note may be referred to an attorney for collection, whether or
not judgment has been confessed or suit has been filed, and the
Borrower shall pay all of the reasonable costs, fees, and expenses,
including reasonable attorney’s fees, incurred by the
Lender.
22. Binding
Nature. This Note shall inure
to the benefit of and be enforceable by the Lender and the
Lender’s successors and permitted assigns, and shall be
binding and enforceable against the Borrower and the
Borrower’s successors and assigns.
NOW THEREFORE,
Borrower has executed this Senior
Secured Confessed Judgment Promissory Note under seal on the date
first above written.
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WITNESS:
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BORROWER:
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RUMBLEON,
INC.
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By:
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Marshall
Chesrown
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Chief
Executive Officer
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ACKNOWLEDGED
AND AGREED:
LENDER:
__________________________________
[Signature Page to the Form of Note]
Exhibit 10.5
FORM
OF
SECURITY AGREEMENT
THIS
SECURITY AGREEMENT (the “Agreement”), made this
14th day
of January, 2020, by and among RUMBLEON, INC., a Nevada
corporation, with an address of 901 West Walnut Hill Lane, Irving,
Texas 75038 ("Debtor"),
and HALCYON CONSULTING, LLC, a Maryland limited liability company,
with an address of 8600 S. Freeport Parkway, Suite 330, Irving,
Texas 75063, Denmar Dixon, with an address of
___________________________________________, Blue Flame Capital,
LLC, with an address of __________________________________________,
Lori Sue Chesrown, with an address of
____________________________________, and Ralph Wegis, with an
address of _____________________________________, (each, a
"Secured
Party" and collectively, "Secured
Parties").
1. Grant of Security
Interest. Subject to the applicable terms of this Agreement,
Debtor grants to Secured Parties a security interest in the
Collateral to secure, on a pro rata basis based on the percentage
equal to the amount of principal outstanding on a Note divided by
the amount of principal outstanding on all of the Notes to each
Secured Party, the payment of the Obligations, provided that the
security interest granted hereby is subject to the provisions of
applicable law (e.g., UCC Section 9-408(c)).
2. The
Obligations. As used in this Agreement, "Obligations"
means collectively all of the following:
(a) All amounts due
pursuant to the terms of the five (5) promissory notes of even date
herewith described in Exhibit A
attached hereto (individually, a “Note” and
collectively, "Notes").
(b) All costs incurred
by Secured Parties to enforce the security interest granted hereby
("Security
Interest"), collect the Obligations, and maintain the
Collateral free of liens (other than Permitted Encumbrances as
defined in Exhibit B
attached hereto), and including (but not limited to) reasonable
attorneys' fees and legal expenses, and expenses of
sale.
3. The
Collateral. As used in this Agreement, "Collateral"
shall mean all of Debtor's assets, both now and hereafter acquired,
and wherever located, including but not limited to:
(a) Accounts;
(b) Chattel
paper;
(c) Contracts;
(d) Deposit
accounts;
(e) Documents;
(f) Equipment;
(g) Farm
products;
(h) Fixtures;
(i) General
intangibles;
(j) Goods;
(k) Instruments;
(l) Inventory;
(m) Investment
property;
(n) Letter-of-credit
rights;
(o) The Trademark
Collateral; and
(p) Proceeds and
products of all of the foregoing; provided however,
that the "Collateral" shall exclude the "Excluded
Property". Excluded Property means (i) motor vehicles and
other assets subject to certificates of title, letter of credit
rights and commercial tort claims; (ii) pledges and security
interests prohibited by applicable law, rule, regulation; (iii)
equity interests in any person other than wholly-owned subsidiaries
of Debtor; (iv) any lease, license or other agreement to the extent
that a grant of a security interest therein would violate or
invalidate such lease, license or agreement or create a right of
termination in favor of any other party thereto; (v) any
governmental licenses or state or local franchises, charters and
authorizations (but not registered patents and trademarks); (vi)
any equipment or other asset subject to liens securing capitalized
lease obligations or permitted purchase money indebtedness; and
(vii) any property subject to liens securing indebtedness for floor
plan financing, and Secured Parties shall release from their
security interest (including, without limitation, by the filing of
applicable UCC release amendments) any property that now or
hereafter constitutes Excluded Property.
“Trademark
Collateral” means:
(a)
All trademark registrations and applications registered with the
United States Patent and Trademark Office, including for the design
logo “R” serial number 87532685 and for RumbleOn,
serial numbers 874309812, 87975582 and 87532644, together with the
goodwill connected with the use of and symbolized thereby and all
extensions and renewals thereof (the "Trademarks"), excluding only
United States intent-to-use trademark applications to the extent
that and solely during the period in which the grant of a security
interest therein would impair, under applicable federal law, the
registrability of such applications or the validity or
enforceability of registrations issuing from such
applications;
(b) all
rights of any kind whatsoever of Debtor accruing under any of the
Trademarks provided by applicable law of any jurisdiction, by
international treaties and conventions and otherwise throughout the
world;
(c) any
and all royalties, fees, income, payments and other proceeds now or
hereafter due or payable with respect to any and all of the
Trademarks; and
(d)
any and all claims and causes of action, with respect to any of the
Trademarks, whether occurring before, on or after the date hereof,
including all rights to and claims for damages, restitution and
injunctive and other legal and equitable relief for past, present
and future infringement, dilution, misappropriation, violation,
misuse, breach or default, with the right but no obligation to sue
for such legal and equitable relief and to collect, or otherwise
recover, any such damages.
4. Debtor's
Covenants.
(a) Debtor shall
maintain at its principal place of business complete records
regarding all account balances due Debtor, whether secured or
unsecured, which account balances comprise the Collateral
hereunder. Such records shall include, without limitation, current
statements of balances due, and copies of all contracts,
instruments or documents evidencing, securing or guarantying such
balances. Upon reasonable prior notice by Secured Parties, Debtor
shall make all such records available for inspection and copying by
any Secured Party and/or its agents during normal business
hours.
(b) Debtor covenants
and agrees that it shall: (i) take adequate care of the Collateral
(except as provided in 4(b)(viii) below) in accordance with
reasonable and customary business practices for similar businesses
as the Debtor's, reasonable wear and tear excepted; (ii) insure the
Collateral for such hazards and in such amounts customary for
similar businesses as the Debtor's, with policies to name the
Secured Parties as additional insured and/or loss payee, as the
case may be; (iii) pay all costs necessary to enforce the Security
Interest, collect the Obligations, and maintain the Collateral free
of liens (other than Permitted Encumbrances), including (but not
limited to) taxes, assessments, reasonable attorneys' fees and
legal expenses, and expenses of sale; (iv) furnish Secured Parties
with any information on the Collateral reasonably requested by
Secured Parties; (v) upon receipt of reasonable prior written
notice, allow any Secured Party to inspect the Collateral, and
inspect and copy all records relating to the Collateral and the
Obligations, in each case, during business hours; (vi) take
commercially reasonable steps to preserve the liability of account
debtors, obligors, and secondary parties whose obligations are part
of the Collateral; (vii) notify Secured Parties of any material
change occurring in or to the Collateral, taken as a whole, and
(viii) in its sole discretion, make the decisions regarding any
continued prosecution and maintenance of patent Collateral and
trademark Collateral.
(c) Debtor agrees and
covenants that it shall not (without Secured Parties' consent,
which shall not be unreasonably withheld): (i) remove the
Collateral (except in the ordinary course of business) or any
records relating thereto from the address set forth above; (ii)
allow the Collateral to become an accession to other goods; or
(iii) allow the Collateral to be affixed to real estate, except
goods identified herein as fixtures.
(d) Debtor warrants and
represents to the best of its information, knowledge and belief, as
follows: (i) Debtor is absolute owner of the Collateral and the
Collateral is not encumbered other than by Permitted Encumbrances;
(ii) none of the Collateral is affixed to real estate or an
accession to other goods, nor will Collateral acquired hereafter be
affixed to real estate or an accession to other goods when
acquired, unless Debtor has furnished Secured Parties the consents
or disclaimers necessary to make this Security Interest valid
against persons holding interests in the real estate or other
goods; (iii) all of the Collateral is located at Debtor's premises;
and (iv) Debtor has never been known by, or done business under,
any other name.
(e) Debtor authorizes
Secured Parties to file financing statements and assignments
covering the Collateral and containing such legends as Secured
Parties shall deem necessary or desirable to protect Secured
Parties' interest in the Collateral.
5. Default.
(a) Any "Default" as
defined under the Notes shall be an event of default hereunder.
"Senior Debt" means any indebtedness of the Debtor as defined under
United States Generally Accepted Accounting Principles
("GAAP"), as
in effect on the date hereof, that is secured by any assets of the
Debtor, and that is (i) indebtedness for borrowed money or
indebtedness evidenced by notes, bonds or similar instruments,
relating to any term loan, revolving credit financing, working
capital financing, floor plan financing or real estate financing,
and (ii) purchase money indebtedness and capital leases, in each
case, whether now existing or entered into after the date
hereof.
(b) When an event of
default occurs, the entire Obligations become immediately due and
payable at Secured Parties' option without notice to Debtor, and
Secured Parties may proceed to enforce payment of same and exercise
any and all of the rights and remedies available to a secured party
under the Uniform Commercial Code as well as all other rights and
remedies provided for herein or by law. When Debtor is in default,
Debtor, upon demand by Secured Parties, shall assemble the
Collateral and make it available to Secured Parties at a place
reasonably convenient to both parties. Debtor is entitled to any
surplus and shall be liable to Secured Parties for any deficiency,
arising from accounts, contract rights, or chattel paper included
in the Collateral through sale thereof to the Secured
Parties.
6. Remedies of Secured
Parties. Secured Parties may, in their discretion, after an
event of default: (i) require Debtor to give possession or control
of the Collateral to Secured Parties, and Secured Parties may take
possession of the Collateral without the exercise of judicial
process; (ii) indorse as Debtor's agent any instruments or chattel
paper in the Collateral; (iii) notify account debtors and obligors
on instruments constituting Collateral to make payment directly to
Secured Parties; (iv) contact account debtors directly to verify
information furnished by Debtor relating to Collateral; (v) take
control of proceeds and use cash proceeds from Collateral to reduce
any part of the Obligations; (vi) take any action Debtor is
required to take or otherwise necessary to perfect, preserve, and
enforce the Security Interest, and maintain and preserve the
Collateral, without notice to Debtor, and add costs of same to the
Obligations (but Secured Parties are under no duty to take any such
action); (vii) release Collateral in its possession to Debtor,
temporarily or otherwise; (viii) take control of funds generated by
the Collateral, such as dividends, interest, proceeds or refunds
from insurance, and use same to reduce any part of the Obligations;
and (ix) waive any of its rights hereunder without such waiver
prohibiting the later exercise of the same or similar
rights.
7. Application of
Proceeds. If Secured Parties dispose of the Collateral
following default, the proceeds of such disposition shall be
applied first to the Notes, and thereafter to any remaining
Obligations secured hereby.
8. Subordination.
Notwithstanding anything to the contrary set forth in this
Agreement:
(a) The
Security Interest shall be subordinated for all purposes and in all
respects to the liens and security interests securing any Senior
Debt, regardless of the time, manner or order of perfection of any
such liens and security interests.
(b) Promptly
upon Debtor's request, Secured Parties will from time to time
execute and deliver a subordination agreement on the terms
consistent with Section 9 of the Notes and this Section 8 and
reasonably requested by any holder of any Senior Debt (or any agent
for such holders), including but not limited to subordination
provisions providing for subordination of the Notes, the
Obligations and the Security Interest to any Senior
Debt.
9. Release.
Upon payment in full of the Obligations, the Security Interest
shall automatically terminate and be released without any further
action of the Secured Parties, and at such time Debtor is
authorized to file terminations, releases and any other document
necessary to terminate and release any evidence of the Security
Interest delivered by Debtor or otherwise recorded or filed to
evidence the Security Interest, including releases or terminations
of UCC financing statements.
10. Miscellaneous.
The rights and privileges of each Secured Party shall inure to its
successors and assigns. All representations, warranties, covenants
and agreements of Debtor shall bind Debtor and Debtor's successors
and assigns. Unless otherwise defined herein, definitions in the
Uniform Commercial Code apply to words and phrases in this
Agreement. Debtor waives presentment, demand, notice of dishonor,
protest, and extension of time without notice as to any instruments
and chattel paper in the Collateral. Notice mailed to Debtor's
address set forth above, or to Debtor's most recent changed address
on file with Secured Parties, at least five (5) days prior to the
related action (or, if the Uniform Commercial Code specifies a
longer period, such longer period prior to the related action),
shall be deemed reasonable. The laws of the State of New York shall
govern the rights and obligations of the parties to this Agreement
and the interpretation, construction and enforceability thereof. As
used herein, the singular shall include the plural, the plural
shall include the singular, and the use of any gender shall include
all genders. A photographic or other reproduction of this
Agreement, or any financing statement signed by Debtor, is
sufficient as a financing statement.
IN
WITNESS WHEREOF, the parties have executed this Agreement under
seal as of the day and year first above written.
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WITNESS:
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RUMBLEON,
INC.
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By:
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Marshall
Chesrown
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President
"Debtor"
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WITNESS:
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HALCYON CONSULTING,
LLC
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By:
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Kartik
Kakarala
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Manager
"Secured
Party"
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WITNESS:
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By:
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Denmar
Dixon
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"Secured
Party"
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WITNESS:
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BLUE FLAME CAPITAL,
LLC
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By:
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Denmar
Dixon
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Managing
Partner
"Secured
Party"
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WITNESS:
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By:
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Lori Sue
Chesrown
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"Secured
Party"
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WITNESS:
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By:
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Ralph Wegis
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"Secured
Party"
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EXHIBIT "A"
Notes
(1)
________ Senior Secured Confessed Judgment Promissory Note by
RumbleOn, Inc. to the order of Halcyon Consulting,
LLC;
(2)
________ Senior Secured Confessed Judgment Promissory Note by
RumbleOn, Inc. to the order of Denmar Dixon;
(3)
________ Senior Secured Confessed Judgment Promissory Note by
RumbleOn, Inc. to the order of Blue Flame Capital,
LLC;
(4)
________ Senior Secured Confessed Judgment Promissory Note by
RumbleOn, Inc. to the order of Lori Sue Chesrown; and
(5)
________ Senior Secured Confessed Judgment Promissory Note by
RumbleOn, Inc. to the order of Ralph Wegis
EXHIBIT "B"
Permitted Encumbrances
(a) liens created
hereby or otherwise securing the Note;
(b) the following liens
existing on the date hereof and any renewals or extensions thereof:
________________________________________________________;
(c) liens (other than
liens imposed under ERISA) for taxes, assessments or governmental
charges or levies not yet due or which are being contested in good
faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books
of the applicable person in accordance with GAAP;
(d) statutory or common
law liens of landlords (and customary landlords’ liens in
leases), carriers, warehousemen, mechanics, materialmen and
suppliers and other liens imposed by law or pursuant to customary
reservations or retentions of title arising in the ordinary course
of business, provided that such liens secure only amounts not
overdue by more than 90 days or, if more than 90 days overdue, are
unfiled and no other action has been taken to enforce such lien or
which are being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have
been established;
(e) pledges or deposits
in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other
social security legislation, other than any lien imposed by
ERISA;
(f) deposits to secure
the performance of bids, trade contracts and leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(g) easements,
rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially
detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of
the applicable person;
(h) judgment liens in
respect of judgments, the uninsured portion of which, if any, does
not exceed $100,000;
(i) liens securing
Senior Debt;
(j) leases or subleases
granted to others not interfering in any material respect with the
business of Debtor;
(k) any interest of
title of a lessor under, and liens arising from UCC financing
statements (or equivalent filings, registrations or agreements in
foreign jurisdictions) relating to, leases;
(l) normal and
customary rights of setoff upon deposits of cash in favor of banks
or other depository institutions;
(m) liens of a
collection bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection;
(n) liens of sellers of
goods to the Debtor arising under Article 2 of the Uniform
Commercial Code or similar provisions of applicable law in the
ordinary course of business, covering only the goods sold and
securing only the unpaid purchase price for such goods and related
expenses; and
(o) liens existing on
property at the time of its acquisition; provided, that, (i) such lien was not
created in contemplation of such acquisition, and (ii) such lien
does not encumber any property other than the property encumbered
at the time of such acquisition.
Exhibit 99.1
RumbleOn, Inc. Closes $10.26 Million
Public Offering of its Class B Common Stock and Private Placement of
$8.75 Million Convertible Notes
Dallas, Texas, January 14, 2020 – RumbleOn, Inc. (NASDAQ:
RMBL) (the
“Company”), the e-commerce
company using innovative technology to simplify how dealers and
consumers buy, sell, trade or finance pre-owned vehicles, today
announced the closing of its previously announced underwritten
public offering of 18,000,000 shares of its Class B Common Stock at
a price of $0.57 per share. All of the Class B Common Stock was
offered by the Company.
National Securities Corporation, a wholly owned subsidiary of
National Holdings Corporation (NasdaqCM:NHLD), served as lead
book-running manager for the offering. Maxim Group LLC served as
co-manager for the offering.
The gross proceeds from the public offering, were $10.26 million,
excluding underwriting discounts and commissions and other
offering-related expenses. Certain of our officers and directors have
participated in the public offering.
RumbleOn also announced the closing of its previously announced
private placement of $8.75 million aggregate principal amount of
6.75% convertible senior notes due 2025 (the “Note
Offering”) and the exchange of $25 million of the
Company’s 6.75% Convertible Senior Notes due 2024 for new
6.75% Convertible Senior Notes due 2025 (the “New
Notes”) in a private placement to qualified institutional
buyers as defined by Rule 144A under the Securities Act of 1933, as
amended (the “Act”).
The gross proceeds from the private placement, was approximately
$8.75 million, excluding offering-related expenses.
RumbleOn intends to use the net proceeds from the two offerings for
working capital and general corporate purposes, which may include
further technology development, increased spending on marketing and
advertising, and capital expenditures necessary to further grow the
business.
Also, in connection with the closing of the offerings, certain of
the Company's investors extended the maturity of currently
outstanding promissory notes, and exchanged such notes for new
notes (the "New Investor Notes"), including Halcyon Consulting,
LLC, an entity affiliated with Kartik Kakarala, a director of the
Company, and Denmar Dixon, also a director of the Company. The New
Investor Notes, having an aggregate principal amount of $1.5
million, will mature on January 31, 2021, and will be convertible
at any time at the Investor's option at a price of $3.00 per
share.
A shelf registration statement relating to the shares of Class B
Common Stock offered and sold was filed with the U.S. Securities
and Exchange Commission (SEC) on Form S-3 (Reg. No. 333-234340) and
was declared effective by the SEC on October 31, 2019. The
prospectus supplement relating to this offering is dated January
10, 2020. Copies of the final prospectus supplement and the
accompanying base prospectus relating to the offering may be
obtained by request to the offices of
National Securities Corporation, Attn: Charles Wanyama, Syndicate,
200 Vesey St, 25th Floor, New York, NY 10281, Telephone:
(212)-417-3634; Email: prospectusrequest@nationalsecurities.com;
or on the SEC’s website at http://www.sec.gov.
Akerman LLP served as legal counsel to RumbleOn, and McGuireWoods
LLP served as legal counsel to the underwriters.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any sale of
these securities in any state or jurisdiction in which such an
offer, solicitation or sale is not permitted.
About RumbleOn, Inc.
RumbleOn (NASDAQ: RMBL) is an e-commerce company that uses
innovative technology to simplify how dealers and customers buy,
sell, trade, or finance pre-owned vehicles through RumbleOn’s
100% online marketplace. Leveraging its capital-light network of 17
regional partnerships and innovative technological solutions,
RumbleOn is disrupting the old-school pre-owned vehicle supply
chain by providing users with the most efficient, timely and
transparent transaction experience. For more information, please
visit
http://www.rumbleon.com.
Cautionary Note on Forward-Looking Statements
This press release contains “forward-looking
statements” within the meaning of the Private Securities
Litigation Reform Act of 1995 regarding the offering and the
intended use of proceeds from the offering. Readers are cautioned
not to place undue reliance on these forward-looking statements,
which are based on our expectations as of the date of this press
release and speak only as of the date of this press release and are
advised to consider the factors listed above together with the
additional factors under the heading “Forward-Looking
Statements” and “Risk Factors” in the
Company’s Annual Report on Form 10-K for the year ended
December 31, 2018, as may be supplemented or amended by the
Company’s Quarterly Reports on Form 10-Q and other filings
with the SEC, including the prospectus supplement. We undertake no
obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise, except as required by law.
Investor Relations:
The Blueshirt Group:
Whitney Kukulka
Investors@rumbleon.com
Source: RumbleOn, Inc.