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 8, 2015
BROCADE COMMUNICATIONS SYSTEMS, INC.
(Exact Name of Registrant as Specified in Charter)
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| Delaware |
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000-25601 |
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77-0409517 |
| (State or Other Jurisdiction
of Incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
130 Holger Way
San Jose, CA 95134
(Address, including zip code, of principal executive offices)
(408) 333-8000
(Registrant’s telephone number, including area code)
Not Applicable
(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 (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.01 |
Entry into a Material Definitive Agreement. |
On January 14, 2015, Brocade
Communications Systems, Inc. (the “Company”) issued $575,000,000 principal amount of its 1.375% Convertible Senior Notes due 2020 (the “Notes”). The Company estimates that the net proceeds from the offering of the Notes will be
approximately $564.1 million after deducting the discount of the initial purchasers of the Notes (the “Initial Purchasers”) and estimated offering expenses payable by the Company. The Company used approximately $35.0 million of the net
proceeds of the offering to pay the cost of the convertible note hedge transactions described below (after such cost was partially offset by the proceeds to the Company of the warrant transactions described below) and approximately $48.9 million of
the net proceeds of the offering to repurchase approximately 4.1 million shares of its common stock (“Common Stock”) in privately negotiated transactions effected through one of the Initial Purchasers, as the Company’s agent.
These repurchases were effected concurrently with the pricing of the offering from purchasers of the Notes, at a purchase price of $11.80 per share, which was the closing price of the Common Stock on The NASDAQ Global Select Market on
January 8, 2015, the date of the pricing of the Notes. The Company intends to use the remainder of the net proceeds from the offering to redeem all of its outstanding 6.875% senior secured notes due 2020 (the “2020 notes”) and for
general corporate purposes, including potential acquisitions and other business development activities.
Concurrently with the closing of
the offering, the Company called the 2020 notes for redemption with a redemption date of February 13, 2015, and irrevocably deposited with the trustee for the 2020 notes $322.2 million to discharge the 2020 notes in full, all in accordance
with the terms of the 2020 notes.
Purchase Agreement
On January 8, 2015, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with the Initial Purchasers
relating to the Company’s sale of up to $575,000,000 aggregate principal amount of the Notes (including an over-allotment option) to the Initial Purchasers in a private placement in reliance on Section 4(a)(2) of the Securities Act of
1933, as amended (the “Securities Act”) and for initial resale by the Initial Purchasers to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act. The Company and the
Initial Purchasers relied on these exemptions from registration based in part on representations made by the Company and the Initial Purchasers, respectively. The sale includes the exercise in full by the Initial Purchasers of their option under the
Purchase Agreement to purchase up to $75,000,000 aggregate principal amount of Notes, solely to cover over-allotments. The Purchase Agreement includes customary representations, warranties and covenants by the Company and the Initial Purchasers.
Under the terms of the Purchase Agreement, the Company has agreed to indemnify the Initial Purchasers against certain liabilities under the Securities Act. The Notes and the shares of Common Stock issuable upon conversion of the Notes, if any, have
not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Indenture & the Notes
The Notes
were issued pursuant to an Indenture, dated as of January 14, 2015 (the “Indenture”), between the Company and Wells Fargo Bank, National Association, as trustee. The Notes are general, unsecured obligations of the Company. The notes
will bear interest at a rate of 1.375% per year, payable semiannually in arrears on January 1 and July 1 of each year, beginning on July 1, 2015. The Notes mature on January 1, 2020 unless repurchased or converted in
accordance with their terms prior to such date. The Company may not redeem the Notes prior to their maturity.
The Indenture includes
customary terms and covenants, including certain events of default after which the Notes may be due and payable immediately. The following events are considered “events of default,” which may result in acceleration of the maturity of the
Notes:
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(1) |
default by the Company in any payment of interest on any Note when due and payable, and the default continues for a period of 30 days; |
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(2) |
default by the Company in the payment of principal of any Note when due and payable at its stated maturity, upon any required repurchase, upon declaration of acceleration or otherwise; |
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(3) |
failure by the Company to comply with its obligation to convert the Notes in accordance with the Indenture upon exercise of a holder’s conversion right, and such failure continues for a period of five business
days; |
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(4) |
failure by the Company to issue a fundamental change notice, notice of the effective date of a make-whole fundamental change, or a notice of a specified corporate event at the time and in the manner provided in the
Indenture; |
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(5) |
failure by the Company to comply with its obligations under the Indenture with respect to consolidation, merger or sale of assets of the Company; |
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(6) |
failure by the Company, for a period of 60 days after written notice from the trustee or the holders of 25% or more in aggregate principal amount of the Notes then outstanding has been received by the Company, to comply
with any of its agreements under the Notes or the Indenture; |
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(7) |
default by the Company or any of its significant subsidiaries with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any
indebtedness for money borrowed in excess of $75,000,000 in the aggregate of the Company and/or any such subsidiary, and such default |
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(i) |
results in such indebtedness becoming or being declared due and payable, or |
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(ii) |
constitutes a failure to pay the principal or interest of any such indebtedness when due and payable (at its stated maturity, upon required repurchase, upon acceleration as a result of an event of default or otherwise),
if such default is not cured or waived, or such acceleration is not rescinded, within 30 days after written notice to the Company by the trustee or holders of 25% or more in aggregate principal amount of the Notes then outstanding; or
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(8) |
certain events of bankruptcy, insolvency or reorganization of the Company or any of its significant subsidiaries occur. |
If specified bankruptcy and insolvency-related events of default described in clause (8) above and further specified in the Indenture
occur, the principal of, and accrued and unpaid interest on, all of the then-outstanding Notes shall automatically become due and payable. If an event of default other than these bankruptcy and insolvency-related events of default occurs and is
continuing, the trustee by notice to the Company or the holders of 25% or more in aggregate principal amount of the Notes then outstanding by notice to the Company and the trustee, may declare the principal of, and accrued and unpaid interest on,
all of the then-outstanding Notes to be due and payable. Notwithstanding the foregoing, the Indenture provides that, to the extent the Company elects, the sole remedy for an event of default relating to certain failures by the Company to comply with
certain reporting covenants in the Indenture will, for the first 360 days after such event of default, consist exclusively of the right to receive additional interest on the Notes.
The Notes are convertible at an initial conversion rate of 62.7746 shares of Common Stock per $1,000 principal amount of the Notes, which is
equivalent to an initial conversion price of approximately $15.93 per share of Common Stock, subject to adjustment. Upon conversion, the Company will satisfy its conversion obligation by paying or delivering, as the case may be, cash, shares of
Common Stock or a combination of cash and shares of Common Stock, at its election. If the Company satisfies its conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of Common
Stock, the amount of cash and shares of Common Stock, if any, due upon conversion will be based on a daily conversion value calculated on a proportionate basis for each trading day in a 30 trading day observation period (as defined in the
Indenture). Prior to the close of business on the business day immediately preceding September 1, 2019, such conversion is subject to the satisfaction of the conditions set forth below.
Holders of the Notes may convert all or a portion of their Notes prior to the close of business on the business day immediately preceding
September 1, 2019, in multiples of $1,000 principal amount, only under the following circumstances:
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during any fiscal quarter commencing after the fiscal quarter ending on May 2, 2015 (and only during such fiscal quarter), if the last reported sale price of Common Stock for at least 20 trading days (whether or
not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price of the Notes on each applicable trading day;
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during the five business day period after any ten consecutive trading day period in which the trading price per $1,000 principal amount of the Notes for each trading day of that ten day consecutive trading day period
was less than 98% of the product of the last reported sale price of Common Stock and the conversion rate of the Notes on each such trading day; or |
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upon the occurrence of specified corporate events. |
On or after September 1, 2019, to the
close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their Notes regardless of the foregoing conditions.
Holders of the Notes who convert their Notes in connection with a make-whole fundamental change (as defined in the Indenture) are, under
certain circumstances, entitled to an increase in the conversion rate. Additionally, in the event of a fundamental change (as defined in the Indenture), holders of the Notes may require the Company to repurchase all or a portion of their Notes at a
price equal to 100% of the principal amount of Notes, plus any accrued and unpaid interest to, but excluding, the repurchase date.
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A copy of the Indenture is attached hereto as Exhibit 4.1 and is incorporated herein by
reference. The description of the Notes contained in this Form 8-K is qualified in its entirety by reference to the Indenture.
Convertible Note Hedge
Transactions
On each of January 8, 2015, concurrently with the pricing of the Notes, and January 9, 2015, concurrently with
the Initial Purchasers’ exercise of the over-allotment option to purchase additional Notes, the Company entered into convertible note hedge transactions with respect to its Common Stock (the “Purchased Options”) with affiliates of
certain initial purchasers and another financial institution (the “Counterparties”). The Purchased Options cover, subject to anti-dilution adjustments substantially identical to those in the Notes, approximately 36.1 million shares of
Common Stock, which is equal to the number of shares of Common Stock that will initially underlie the Notes, at an initial strike price of $15.93 per share. The Purchased Options will expire upon the maturity of the Notes, if not earlier exercised
or terminated. A copy of the form of confirmation for the Purchased Options is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The Purchased Options are intended to reduce potential dilution to Common Stock upon any
conversion of the Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, in the event that the market value per share of Common Stock, as measured under the
Purchased Options, at the time of exercise is greater than the strike price of the Purchased Options, which initially corresponds to the initial conversion price of the Notes. The Purchased Options are separate transactions, entered into by the
Company with the Counterparties, and are not part of the terms of the Notes.
The Company used $35.0 million of the net proceeds from the
offering of the Notes to pay the cost of the Purchased Options (after such cost was partially offset by the proceeds to the Company of the Warrants (as defined below)).
Warrant Transactions
Separately from the
Purchased Options, on each of January 8, 2015, concurrently with the pricing of the Notes, and January 9, 2015, concurrently with the Initial Purchasers’ exercise of the over-allotment option to purchase additional Notes, the Company
entered into warrant transactions to sell to the Counterparties warrants (the “Warrants”) to acquire, subject to customary anti-dilution adjustments, up to approximately 36.1 million shares of Common Stock in the aggregate at a strike
price of approximately $20.65 per share. The Company offered and sold the Warrants in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. Neither the Warrants nor the underlying shares of Common Stock
issuable upon conversion of the Warrants have been registered under the Securities Act and neither may be offered or sold in the United States absent registration or an applicable exemption from registration requirements. A copy of the form of
confirmation for the Warrants is attached hereto as Exhibit 99.2 and is incorporated herein by reference. If the market value per share of Common Stock, as measured under the Warrants, at the time of exercise exceeds the strike price of the
Warrants, the Warrants will have a dilutive effect on the Company’s earnings per share. The Warrants are separate transactions, entered into by the Company with the Counterparty, and are not part of the terms of the Notes. The Warrants will
expire in 2020.
| Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The terms and conditions of the Notes and Indenture described in Item 1.01 of this report are incorporated herein by reference into this
Item 2.03.
| Item 3.02. |
Unregistered Sales of Equity Securities. |
The information set forth in Item 1.01 of
this report under the headings “Purchase Agreement” and “Warrant Transactions” is incorporated by reference into this Item 3.02.
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| Item 9.01 |
Financial Statements and Exhibits. |
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| Exhibit
No. |
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Description |
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| 1.1 |
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Purchase Agreement, dated January 8, 2015, by and among Brocade Communications Systems, Inc., Wells Fargo Securities, LLC, and Merrill Lynch, Pierce, Fenner & Smith Incorporated. |
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| 4.1 |
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Indenture (including the form of Notes) dated January 14, 2015, between Brocade Communications Systems, Inc. and Wells Fargo Bank, National Association |
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| 4.2 |
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Form of 1.375% Convertible Senior Note due 2020 (included in Exhibit 4.1) |
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| 99.1 |
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Form of Convertible Note Hedge Transaction Confirmation |
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| 99.2 |
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Form of Warrant Transaction Confirmation |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
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BROCADE COMMUNICATIONS SYSTEMS, INC. |
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| Date: January 14, 2015 |
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By: |
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/s/ Daniel W. Fairfax |
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Daniel W. Fairfax |
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Chief Financial Officer and Senior Vice President |
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EXHIBIT INDEX
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| Exhibit
No. |
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Description |
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| 1.1 |
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Purchase Agreement, dated January 8, 2015, by and among Brocade Communications Systems, Inc., Wells Fargo Securities, LLC, and Merrill Lynch, Pierce, Fenner & Smith Incorporated. |
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| 4.1 |
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Indenture (including the form of Notes) dated January 14, 2015, between Brocade Communications Systems, Inc. and Wells Fargo Bank, National Association |
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| 4.2 |
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Form of 1.375% Convertible Senior Note due 2020 (included in Exhibit 4.1) |
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| 99.1 |
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Form of Convertible Note Hedge Transaction Confirmation |
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| 99.2 |
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Form of Warrant Transaction Confirmation |
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Exhibit 1.1
Brocade Communications Systems, Inc.
$500,000,000 Aggregate Principal Amount
1.375% Convertible Senior Notes Due 2020
PURCHASE AGREEMENT
dated
January 8, 2015
Wells Fargo Securities, LLC
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Purchase Agreement
January 8, 2015
WELLS FARGO SECURITIES, LLC
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
As Representatives
of the several Initial Purchasers
c/o
Wells Fargo
Securities, LLC
375 Park Avenue
New York, NY 10152
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
One Bryant Park
New York, NY 10036
Ladies and Gentlemen:
Introductory. Brocade Communications Systems, Inc., a Delaware corporation (the “Company”), proposes to
sell to the several purchasers named in Schedule A (the “Initial Purchasers”), for whom you (the “Representatives”) are acting as representatives, the respective aggregate principal amount of the
Company’s 1.375% Convertible Senior Notes due 2020 (the “Firm Notes”) set forth opposite each Initial Purchaser’s name in Schedule A. The Company also proposes to grant to the Initial Purchasers an option to
purchase up to an additional $75,000,000 aggregate principal amount of its 1.375% Convertible Senior Notes due 2020 solely to cover over-allotments, if any (the “Optional Notes”). The Firm Notes and, if and to the extent such option
is exercised, the Optional Notes are collectively called the “Securities”. The terms Representatives and Initial Purchasers shall mean either the singular or plural as the context requires.
The Securities will be convertible by the holders thereof into cash, fully paid, non-assessable shares of common stock, $0.001 par value per
share, of the Company (the “Common Stock”) or a combination of cash and shares of Common Stock, at the option of the Company and on the terms, and subject to the conditions, set forth in the Indenture (as defined below). As used
herein, “Conversion Shares” means the shares of Common Stock, if any, into which the Securities are convertible. The Securities will be issued pursuant to an indenture to be dated as of the Closing Date (as defined in Section 2
hereof) (the “Indenture”) among the Company and Wells Fargo Bank, National Association, as trustee (the “Trustee”).
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In connection with the offering of the Firm Notes, the Company is separately entering into
convertible note hedge transactions and warrant transactions with one or more counterparties, which may include affiliates of one or more of the Initial Purchasers (each, a “Call Spread Counterparty”), in each case pursuant to one
or more convertible note hedge confirmations (each, a “Base Bond Hedge Confirmation”) and one or more warrant confirmations (each, a “Base Warrant Confirmation”), respectively, each dated the date hereof (the Base
Bond Hedge Confirmations and the Base Warrant Confirmations, collectively, the “Base Call Spread Confirmations”), and in connection with the issuance of any Optional Notes, the Company and each Call Spread Counterparty may enter
into additional convertible note hedge transactions and additional warrant transactions pursuant to additional convertible note hedge confirmations (each, an “Additional Bond Hedge Confirmation”) and additional warrant confirmations
(each, an “Additional Warrant Confirmation”), respectively, each to be dated the date on which the option granted to the Initial Purchasers pursuant to Section 2 to purchase such Optional Notes is exercised (the Additional Bond
Hedge Confirmations and the Additional Warrant Confirmations, the “Additional Call Spread Confirmations” and, together with the Base Call Spread Confirmations, the “Call Spread Confirmations”).
The Company understands that the Initial Purchasers propose to make an offering of the Securities on the terms and in the manner set
forth herein and agrees that the Initial Purchasers may resell, subject to the conditions set forth herein, all or a portion of the Securities to purchasers (“Subsequent Purchasers”) at any time after the date of this Agreement. The
Securities will be offered and sold to or through the Initial Purchasers without being registered under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”), in reliance
upon an exemption therefrom. The terms of the Securities and the Indenture will require that investors that acquire Securities expressly agree that Securities (and any Conversion Shares) may only be resold or otherwise transferred, after the date
hereof, if such Securities (or Conversion Shares, if any) are registered for sale under the Securities Act or if an exemption from the registration requirements of Securities Act is available (including the exemption afforded by Rule 144A
(“Rule 144A”) thereunder).
The Company has prepared and delivered to each Initial Purchaser copies of a
preliminary offering memorandum dated as of January 7, 2015, prior to the Applicable Time (as defined below) (the “Preliminary Offering Memorandum”) and will prepare and will deliver to each Initial Purchaser, on the date
hereof or the next succeeding day, copies of a final offering memorandum dated as of January 8, 2015 (the “Final Offering Memorandum”), each for use by such Initial Purchaser in connection with its solicitation of purchases of,
or offering of, the Securities. “Offering Memorandum” means, with respect to any date or time referred to in this Agreement, the most recent offering memorandum (whether the Preliminary Offering Memorandum or the Final Offering
Memorandum, or any amendment or supplement to either such document), including exhibits thereto and any documents incorporated therein by reference, which has been prepared and delivered by the Company to the Initial Purchasers, in the case of the
Preliminary Offering Memorandum prior to the Applicable Time, in connection with their solicitation of purchases of, or offering of, the Securities. The Company will prepare a final term sheet reflecting the final terms of the Securities, in the
form set forth in Schedule B hereto (the “Final Term Sheet”), and will deliver such Final Term Sheet to the Initial Purchasers prior to the Applicable Time in connection with their solicitation of purchases of, or offering
of, the Securities. The Company agrees that, unless it obtains the prior written consent of the
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Representatives, it will not make any offer relating to the Securities by any written materials other than the Offering Memorandum and the Issuer Written Information. “Issuer Written
Information” means (i) any writing intended for general distribution to investors as evidenced by its being specified in Schedule C hereto, including the Final Term Sheet, and (ii) any “road show” that is a
“written communication” within the meaning of the Securities Act. “General Disclosure Package” means the Preliminary Offering Memorandum and any Issuer Written Information specified on Schedule C hereto and issued at or
prior to 10:53 P.M., New York City time, on January 8, 2015, or such other time as agreed by the Company and the Representatives (such date and time, the “Applicable Time”).
All references in this Agreement to financial statements and schedules and other information which is “contained,”
“included” or “stated” in the Offering Memorandum (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which are incorporated by reference into
the Offering Memorandum; and all references in this Agreement to amendments or supplements to the Offering Memorandum shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder (the “Exchange Act”) which is incorporated by reference into the Offering Memorandum.
The Company hereby confirms its agreements with the Initial Purchasers as follows:
Section 1. Representations and Warranties. The Company hereby represents and warrants to each Initial Purchaser as of the
date hereof, as of the Applicable Time (as defined below) and as of the Closing Date (as defined below), and covenants to each Initial Purchaser as follows:
(a) General Disclosure Package; Rule 144A Eligibility. The Company hereby confirms that it has authorized the use of the General
Disclosure Package, including the Preliminary Offering Memorandum and the Final Term Sheet, and the Final Offering Memorandum in connection with the offer and sale of the Securities by the Initial Purchasers. The Securities are eligible for resale
pursuant to Rule 144A and will not be, on the Closing Date or any Subsequent Closing Date, if applicable, of the same class as securities of the Company listed on a national securities exchange registered under Section 6 of the Exchange Act, or
quoted in a U.S. automated interdealer quotation system.
(b) No Registration Required; No General Solicitation.
Subject to compliance by the Initial Purchasers with the representations, warranties and covenants of the Initial Purchasers and the procedures set forth in Section 6 hereof, it is not necessary in connection with the offer, sale and delivery of
the Securities to the Initial Purchasers and to each Subsequent Purchaser in the manner contemplated by this Agreement, the General Disclosure Package and the Final Offering Memorandum to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”). None of the Company, its Affiliates (as defined in Section 6(c) hereof) or any person acting on behalf of the Company
or its Affiliates (other than the Initial Purchasers, as to whom the Company makes no representation) has (i) directly or indirectly, solicited any offer to buy or offered to sell, or will, directly or indirectly, solicit any offer to buy or
offer to sell, in the United States or to any United States citizen or resident, any security which is or would be integrated with the sale of the
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Securities in a manner that would require the Securities to be registered under the Securities Act or (ii) engaged, in connection with the offering of the Securities, in any form of general
solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act.
(c) Accurate Disclosure. As
of the Applicable Time, neither (A) the General Disclosure Package nor (B) any Issuer Written Information, when considered together with the General Disclosure Package, included, includes or will include any 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. The Final Offering Memorandum, as of its date, as of the
Closing Date and as of any Subsequent Closing Date, did not, does not and will not contain any 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. The documents incorporated or deemed to be incorporated by reference in the General Disclosure Package and the Final Offering Memorandum, when such documents incorporated by reference were filed with the
Securities and Exchange Commission (the “Commission”), when read together with the other information in the General Disclosure Package or the Final Offering Memorandum, as the case may be, did not, do not and will not
contain any 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. The representations and warranties in
this subsection shall not apply to statements in or omissions in the General Disclosure Package or the Final Offering Memorandum made in reliance upon and in conformity with Initial Purchaser Information (as defined in Section 9(b) hereof).
(d) Accuracy of Statements in Offering Memorandum. The statements in each of the Preliminary Offering Memorandum and the
Final Offering Memorandum under the headings “Description of Notes,” “Description of Capital Stock,” “Description of Certain Other Indebtedness” and “Certain United States Federal Income Tax Considerations,”
insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, fairly present such legal matters, agreements, documents or proceedings in all material respects.
(e) Incorporation of Documents by Reference. The documents incorporated or deemed to be incorporated by reference in the
Preliminary Offering Memorandum and the Final Offering Memorandum, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the Exchange Act.
(f) Authorization of the Purchase Agreement. This Agreement has been duly authorized, executed and delivered by, and is a valid
and binding agreement of, the Company.
(g) Authorization of the Indenture. The Indenture has been duly authorized by
the Company and, when duly executed and delivered by each of the Company and the Trustee, will constitute a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).
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(h) Authorization of the Securities. The Securities have been duly authorized and,
on the respective Closing Date and any Subsequent Closing Date, as applicable, will have been duly executed by the Company and, when authenticated, issued and delivered in the manner provided for in the Indenture and delivered against payment of the
purchase price therefor as provided in this Agreement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be in the form contemplated by, and entitled to the benefits of, the Indenture.
(i) Authorization of the Call Spread Confirmations. The Base Call Spread Confirmations have been duly authorized, executed and delivered
by the Company and are enforceable against the Company in accordance with their terms, and any Additional Call Spread Confirmations will, on or prior to the date such Additional Call Spread Confirmations are entered into, have been duly authorized,
executed and delivered by the Company and will be enforceable against the Company in accordance with their terms, subject in each case to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and equitable
principles of general applicability.
(j) Authorization of the Conversion Shares. The maximum number of shares of Common Stock
initially issuable upon conversion of the Securities (including the maximum number of shares of Common Stock that may be issued upon conversion of the Securities in connection with a make-whole fundamental change), assuming the Company elects to
issue and deliver solely shares of Common Stock in respect of all such conversions (the “Maximum Number of Underlying Securities”), have been duly authorized and reserved for issuance upon such conversion by all necessary corporate
action, and any such shares of Common Stock, when issued upon such conversion, will be validly issued and will be fully paid and non-assessable; and the issuance of any such shares of Common Stock upon such conversion will not be subject to the
preemptive or other similar rights of any security holder of the Company.
(k) Authorization of the Warrant Securities. The maximum
number of shares of Common Stock issuable upon exercise and settlement or termination of the warrants issued pursuant to the Base Warrant Confirmations and any Additional Warrant Confirmations (the “Warrant Securities”) have been
duly authorized and reserved and, when issued upon exercise of such warrants in accordance with the terms of such warrants, will be validly issued, fully paid and non-assessable, and the issuance of the Warrant Securities will not be subject to any
preemptive or similar rights.
(l) Conformity of Securities. The Securities to be purchased by the Initial Purchasers from the
Company will on the Closing Date be in the form contemplated by the Indenture. The Securities, the Indenture and the Call Spread Confirmations will conform in all material respects to the descriptions thereof in the General Disclosure Package and
the Final Offering Memorandum.
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(m) No Applicable Registration or Other Similar Rights. Except as described in the
General Disclosure Package and the Final Offering Memorandum, there are no persons with registration or other similar rights to have any securities registered for sale or sold by the Company under the Securities Act.
(n) No Material Adverse Change. Subsequent to the respective dates as of which information is given in each of the General
Disclosure Package and the Final Offering Memorandum, (i) the Company and its subsidiaries have not incurred any material liability or obligation, direct or contingent, nor entered into any material transaction (other than agreements entered
into with original equipment manufacturers in the ordinary course of business consistent with past practice); (ii) the Company has not purchased any of its outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock other than ordinary and customary dividends (other than purchases of common stock pursuant to the Company’s stock repurchase program or equity compensation plans described in the General Disclosure
Package and the Final Offering Memorandum); (iii) there has not been any material change in the capital stock (other than issuances of capital stock pursuant to employee benefit or equity compensation plans described in the General Disclosure
Package and the Final Offering Memorandum or upon exercise of outstanding options or warrants or the vesting of restricted stock units described in the General Disclosure Package and the Final Offering Memorandum, and the grant of options and awards
under existing equity incentive plans described in the General Disclosure Package and the Final Offering Memorandum) or long term debt of the Company and its subsidiaries; and (iv) neither the Company nor any of its subsidiaries has sustained
any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or
governmental or regulatory authority, except in each case as described in each of the General Disclosure Package and the Final Offering Memorandum.
(o) Independent Accountants. KPMG LLP, which expressed its opinion with respect to the financial statements (which term as used
in this Agreement includes the related notes thereto) and any supporting schedules included in the General Disclosure Package, are independent public or certified public accountants within the meaning of the Rules of Professional Conduct/Code of
Ethics (or similar rules) and Regulation S-X under the Securities Act and the Exchange Act, and any non-audit services provided to the Company by KPMG LLP have been approved by the audit committee of the board of directors of the Company.
(p) Preparation of the Financial Statements. The consolidated financial statements of the Company included in the
General Disclosure Package and the Final Offering Memorandum present fairly in all material respects the consolidated financial position of the Company and its subsidiaries as of and at the dates indicated and the results of their consolidated
operations and cash flows for the periods specified. The schedules, if any, included in the General Disclosure Package and the Final Offering Memorandum present fairly the information required to be stated therein. Such financial statements and
schedule have been prepared in conformity with generally accepted accounting principles (“GAAP”) as applied in the United States applied on a consistent basis throughout the periods involved, except as may be expressly
stated in the related notes thereto. The financial data set forth in the General Disclosure Package under the caption “Summary—Summary Consolidated Financial Data” fairly presents, in all material respects, the
6
information set forth therein on a basis consistent with that of the audited financial statements contained in the General Disclosure Package. The interactive data in eXtensible Business
Reporting Language included in or incorporated by reference into the General Disclosure Package and the Final Offering Memorandum fairly presents the information called for in all material respects and has been prepared in accordance with the
Commission’s rules and guidelines applicable thereto in each case in all material respects.
(q) No Material Adverse Change
Since Financial Statements Date. Subsequent to the date of the most recent financial statements included or incorporated by reference in each of the General Disclosure Package and the Final Offering Memorandum, there has not occurred any
material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set
forth in the General Disclosure Package provided to prospective purchasers of the Securities.
(r) Incorporation and Good
Standing of the Company and the Company’s Significant Subsidiaries. Each of the Company and the Company’s significant subsidiaries (as defined in Rule 1-02(w) of Regulation S-X), all of which are listed on Annex A hereto (the
“Significant Subsidiaries”), has been duly incorporated or organized, as applicable, and is validly existing in good standing under the laws of the jurisdiction of its incorporation or organization, as applicable, and
has the power and authority (corporate or limited liability company) to own or lease, as the case may be, and operate its properties and to conduct its business as described in the General Disclosure Package and the Final Offering Memorandum and, in
the case of the Company, to enter into and perform its obligations under this Agreement and the Indenture. Each of the Company and the Significant Subsidiaries is duly qualified as a foreign corporation or entity to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except for such jurisdictions where the failure to so qualify or to be in good standing
would not, individually or in the aggregate, result in a material adverse effect on the condition, financial or otherwise, or on the earnings, business, properties, operations or prospects, whether or not arising from transactions in the ordinary
course of business, of the Company and its subsidiaries, considered as one entity (a “Material Adverse Effect”). All of the issued and outstanding shares of capital stock, units or membership interests, if applicable,
of each subsidiary have been duly authorized and validly issued, are fully paid and nonassessable (except, in the case of any foreign subsidiary, for directors’ qualifying shares and except as otherwise disclosed in each of the General
Disclosure Package and the Final Offering Memorandum) and are owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim, except those existing under the Credit
Agreement (as defined below) or the Company’s 6.875% Senior Secured Notes due 2020 or that constitute Permitted Liens (as defined in the Indenture relating to the 4.625% Senior Notes due 2023, “Permitted Liens”).
(s) Capitalization and Other Capital Stock Matters. The authorized, issued and outstanding capital stock of the
Company is contained in the General Disclosure Package and the Final Offering Memorandum under the caption “Description of Capital Stock” (other than for subsequent issuances, if any, pursuant to employee benefit plans or stock purchase
plans described in the General Disclosure Package and the Final Offering Memorandum or upon
7
exercise of outstanding options or the vesting of restricted stock units described in the General Disclosure Package and the Final Offering Memorandum, as the case may be). The Common Stock
(including any Conversion Shares) conforms in all material respects to the description thereof contained in the General Disclosure Package and the Final Offering Memorandum. All of the issued and outstanding shares of Common Stock have been duly
authorized and validly issued, are fully paid and nonassessable and have been issued in compliance with federal and state securities laws. None of the outstanding shares of Common Stock were issued in violation of any preemptive rights, rights of
first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt
securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other than those accurately described in the General Disclosure Package and the Final Offering Memorandum. The description of
the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, contained in the General Disclosure Package and the Final Offering Memorandum accurately and fairly presents in
all material respects the information required to be shown with respect to such plans, arrangements, options and rights.
(t)
Stock Options. With respect to the outstanding stock options (the “Stock Options”) granted pursuant to the stock-based compensation plans of the Company (the “Company Stock Plans”), except as
otherwise disclosed in the General Disclosure Package and the Final Offering Memorandum, (i) each Stock Option intended to qualify as an “incentive stock option” under Section 422 of the Code so qualifies, (ii) each grant of
a Stock Option was duly authorized no later than the date on which the grant of such Stock Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action, including, as applicable, approval by the board
of directors of the Company (or a duly constituted and authorized committee thereof) and any required stockholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed
and delivered by each party thereto, (iii) each such grant was made in accordance with the terms of the Company Stock Plans, the Exchange Act and the rules of the Nasdaq Global Select Market, (iv) the per share exercise price of each Stock
Option was equal to the fair market value of a share of Common Stock on the applicable Grant Date and (v) each such grant was properly accounted for in accordance with U.S. generally accepted accounting principles in the financial statements
(including the related notes) of the Company and disclosed in the Company’s filings with the Commission in accordance with the Exchange Act and all other applicable laws, except in the case of clauses (i)-(v) in such instances that are
reasonably expected to not have a Material Adverse Effect. Except as otherwise disclosed in the General Disclosure Package and the Final Offering Memorandum, the Company has not knowingly granted, and there is no and has been no policy or practice
of the Company of granting, Stock Options prior to the release or other public announcement of material information regarding the Company or its subsidiaries or their results of operations or prospects, except in such instances that are reasonably
expected to not have a Material Adverse Effect.
(u) No Stamp or Transfer Taxes. There are no stamp or other issuance
or transfer taxes or duties or other similar fees or charges to be paid in connection with the execution and delivery of this Agreement or the issuance or sale by the Company of the Securities or upon the issuance of any shares of Common Stock upon
the conversion of the Securities, unless a converting holder of Securities requests that any such shares of Common Stock be issued in a name other than such holder’s name.
8
(v) Non-Contravention of Existing Instruments. Neither the Company nor any of its
subsidiaries is (i) with respect to the Company or any Significant Subsidiary, in violation of its charter, bylaws or other constitutive document; (ii) in default (or, with the giving of notice or lapse of time, would be in default)
(“Default”) under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be
bound (including, without limitation, the Credit Agreement dated as of October 7, 2008, among the lenders party thereto, Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, Morgan Stanley Senior
Funding, Inc., as syndication agent, Banc of America Securities LLC and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, HSBC Bank USA National Association and Keybank National Association, as co-documentation
agents and the Company, as amended (the “Credit Agreement”); the Company’s 6.875% Senior Secured Notes due 2020 (the “2020 Notes”); or the Company’s 4.625% Senior Notes due
2023) or to which any of the property or assets of the Company or any of its subsidiaries is subject (each, an “Existing Instrument”); or (iii) in violation of any statute, law, rule, regulation, judgment, order
or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or such subsidiary or any of its properties, as applicable, except, in the case of clauses
(ii) and (iii) above, for such Defaults and violations as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The Company’s execution, delivery and performance of this Agreement,
the Indenture and the Call Spread Confirmations, the issuance and delivery of the Securities, and the consummation of the transactions contemplated hereby and thereby and by the General Disclosure Package and the Final Offering Memorandum
(including, without limitation, the termination of the Credit Agreement and the use of proceeds from the sale of the Securities to repurchase shares of Common Stock and redeem and discharge the 2020 Notes) (i) will not result in any violation
of the provisions of the charter, bylaws or other constitutive document of the Company or any of the Significant Subsidiaries, (ii) will not conflict with or constitute a breach of, or Default or a Debt Repayment Triggering Event (as defined
below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, or require the consent of any other party to, any Existing Instrument, except
for such conflicts, breaches, Defaults, liens, charges or encumbrances (x) as have been waived or otherwise approved pursuant to such Existing Instrument or (y) as would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect, and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company or any subsidiary, except for such violations as would not,
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. As used herein, a “Debt Repayment Triggering Event” means any event or condition which gives, or with the giving of
notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries.
9
(w) No Further Authorizations or Approvals Required. No consent, approval,
authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency is required for the Company’s execution, delivery and performance of the Call Spread Confirmations, this
Agreement or the Indenture, or the issuance and delivery of the Securities, or consummation of the transactions contemplated hereby and thereby and by the Final Offering Memorandum, except for (x) such consents, approvals, authorizations,
orders, registrations or filings, as may be required under applicable state securities laws of the several states of the United States or provinces of Canada in connection with the purchase and resale of the Securities by the Initial Purchasers,
(y) such consents, approvals, authorizations, orders, registrations or filings as have been obtained or made by the Company and are in full force and effect and (z) such consents, approvals, authorizations, orders, registrations or filings
the failure of which to obtain or make would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or a material adverse effect on the consummation of the offering of the Securities or the transactions
contemplated by this Agreement, the Indenture and the Call Spread Confirmations.
(x) No Material Actions or Proceedings.
Other than proceedings accurately described in all material respects in the General Disclosure Package, there are no legal or governmental proceedings pending or, to the knowledge of the Company, overtly threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that would reasonably be expected to have a Material Adverse Effect or a material adverse effect on the power or ability of the
Company to perform its obligations under this Agreement, the Indenture, the Call Spread Confirmations or the Securities or to consummate the transactions contemplated by the General Disclosure Package.
(y) Labor Matters. No labor disturbance by or dispute with employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is threatened, except as would not reasonably be expected to have a Material Adverse Effect.
(z)
Intellectual Property Rights. The Company and its subsidiaries own or possess adequate rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses, except in any such instances that,
individually or in the aggregate, are not reasonably expected to have a Material Adverse Effect; and the conduct of their respective businesses will not conflict in any material respect with any such rights of others, and, except as otherwise
disclosed in the General Disclosure Package and the Final Offering Memorandum, the Company and its subsidiaries have not received any notice of any claim of infringement of or conflict with any such rights of others, and the Company has no knowledge
of any other fact which would form a reasonable basis for any such claim that, if subject to an unfavorable decision, ruling or finding, would reasonably be expected to have a Material Adverse Effect.
(aa) All Necessary Permits, etc. The Company and its subsidiaries possess all licenses, certificates, permits and other
authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the
conduct of their respective businesses as described in each of the General Disclosure Package and the Final Offering Memorandum, except where the failure to possess or make the same would not,
10
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and except as otherwise disclosed in each of the General Disclosure Package and the Final Offering
Memorandum, neither the Company nor any of its subsidiaries has received notice of any revocation or modification of any such material license, certificate, permit or authorization or has any reason to believe that any such material license,
certificate, permit or authorization will not be renewed in the ordinary course.
(bb) Title to Properties. The Company and
its subsidiaries have good and marketable title to, or have valid rights to lease or otherwise use, all items of real and personal property that are material to the respective businesses of the Company and its subsidiaries, in each case free and
clear of all liens, encumbrances, claims and defects and imperfections of title, except for (x) Permitted Liens, (y) those existing under the Credit Agreement or the 2020 Notes or (z) those that (i) do not materially interfere
with the use made and proposed to be made of such property by the Company and its subsidiaries or (ii) could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(cc) Tax Law Compliance. The Company and its subsidiaries have filed all federal, state, local and foreign tax returns required
to be filed through the date hereof and have paid all taxes shown as due on such returns, except in such instances that are not reasonably expected, individually or in the aggregate, to have a Material Adverse Effect; the Company and its
subsidiaries have either paid or appropriately reserved under GAAP for all federal, state, local and foreign taxes required to be paid through the date hereof, except in such instances that are not reasonably expected, individually or in the
aggregate, to have a Material Adverse Effect; and except as otherwise disclosed in each of the General Disclosure Package and the Final Offering Memorandum, there is no material tax deficiency that has been, or that is reasonably expected to be,
asserted against the Company or any of its Significant Subsidiaries or any of their respective properties or assets.
(dd)
Company Not an “Investment Company”. The Company is not, and after giving effect to the transactions contemplated by the Call Spread Confirmations, the offering and sale of the Securities and the application of the proceeds thereof
as described in the Final Offering Memorandum will not be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended (the “Investment Company
Act”).
(ee) Insurance. The Company and the Significant Subsidiaries have insurance covering their
respective properties, operations, personnel and businesses, including business interruption insurance, which insurance is in amounts and insures against material losses and risks and are reasonably believed to be adequate and customary to protect
the Company and the Significant Subsidiaries and their respective businesses; and neither the Company nor any of the Significant Subsidiaries has (i) received notice from any insurer or agent of such insurer that capital improvements or other
expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business.
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(ff) No Restrictions on Dividends. Except pursuant to the Credit Agreement, the
Indenture dated as of January 20, 2010, among the Company, the guarantors party thereto and Wells Fargo Bank, N.A. as trustee regarding the Company’s 6.875% Senior Secured Notes due 2020, and the Indenture dated as of January 22,
2013, among the Company, the guarantors party thereto and Wells Fargo Bank, N.A. as trustee regarding the Company’s 4.625% Senior Notes due 2023, no subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement
or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company.
(gg) No Price Stabilization or Manipulation. The Company has not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
(hh) Solvency. On and immediately after the Closing Date, the Company (after giving effect to the issuance of the Securities and
the other transactions related thereto as described in each of the General Disclosure Package and the Final Offering Memorandum) will be Solvent. As used in this paragraph, the term “Solvent” means, with respect to a
particular date and entity, that on such date (i) the fair value of the assets of such entity and its consolidated subsidiaries taken as a whole is not less than the total amount of liabilities of such entity and its consolidated subsidiaries
taken as a whole; (ii) such entity is able to pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business; (iii) assuming consummation of the issuance of the
Securities as contemplated by this Agreement, the General Disclosure Package and the Final Offering Memorandum, such entity is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature; and (iv) such
entity is not engaged in any business or transaction, and does not propose to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the
industry in which such entity is engaged.
(ii) Ranking. The Securities, upon issuance, will constitute “senior
indebtedness” as such term is defined in any indenture or agreement governing any outstanding subordinated indebtedness of the Company.
(jj) Disclosure Controls. The Company and its subsidiaries maintain an effective system of “disclosure controls and
procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure at the reasonable assurance level that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure at the reasonable assurance level that such information is accumulated and
communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure. The Company and its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as
required by Rule 13a-15 of the Exchange Act.
12
(kk) Internal Controls and Procedures. The Company and its subsidiaries maintain
systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective
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. The Company and its subsidiaries maintain 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 generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; (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; and
(v) interactive data in eXtensible Business Reporting Language included or incorporated by reference in each of the General Disclosure Package and the Final Offering Memorandum is prepared in accordance with the Commission’s rules and
guidelines applicable thereto. Except as disclosed in each of the General Disclosure Package and the Final Offering Memorandum, since the end of the Company’s most recent audited fiscal year, the Company has not identified any material
weaknesses or significant deficiencies in the Company’s internal controls over financial reporting. 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 reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information;
and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.
(ll) Neither the Company nor any of its subsidiaries nor any agent thereof acting on their behalf has taken, and none of them will take, any
action that might cause this Agreement or the issuance or sale of the Securities to violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve System.
(mm) No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act)
contained in any of the General Disclosure Package or the Final Offering Memorandum has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(nn) No Unlawful Contributions or Other Payments. None of the Company, any of its subsidiaries or, to the knowledge of the
Company, any director, officer, agent, employee, affiliate or other person acting on behalf of the Company or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of
the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including, without limitation, making use of the mails or any means or instrumentality of interstate
commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official”
(as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign
13
political office, in contravention of the FCPA and the Company and, to the knowledge of the Company, its affiliates have conducted their businesses in compliance with the FCPA and have instituted
and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(oo) No Conflict with Money Laundering Laws. The operations of the Company and its subsidiaries 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 or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(pp) No Conflict with OFAC Laws. None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director,
officer, agent, employee, affiliate or representative of the Company or any of its subsidiaries is an individual or entity (“Person”) currently the subject or target of any sanctions administered or enforced by the
United States Government, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council
(“UNSC”), the European Union, Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), nor is the Company
located, organized or resident in a country or territory that is the subject of Sanctions; and the Company will not directly or indirectly use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such proceeds
to any subsidiaries, joint venture partners or other Person, to fund any activities of or business with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions or in any other manner that will
result in a violation by any Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.
(qq) Compliance with Environmental Laws. Except as otherwise disclosed in the General Disclosure Package and the Final Offering
Memorandum, (i) the Company and its subsidiaries (x) are in compliance with all applicable federal, state, local and foreign laws, statutes, rules, regulations, requirements, decisions and orders relating to the protection of the
environment or natural resources, or to hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”), (y) have received and are in compliance with all permits, licenses, certificates
or other authorizations or approvals required of them under applicable Environmental Laws to conduct their respective businesses, and (z) have not received written notice of any actual or potential liability under or relating to any
Environmental Laws, including for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, and have no knowledge of any event or condition that would reasonably be expected
to result in any such notice, and (ii) there are no costs or liabilities associated with Environmental Laws of or relating to the Company or its subsidiaries, except in the case of each of (i) and (ii) above, for any such failure to
comply, or failure to receive required permits, licenses, certificates or other authorizations or approvals, or cost or liability, as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and
(iii) except as otherwise disclosed in the General Disclosure Package and the Final Offering
14
Memorandum, (x) there are no proceedings that are pending, or that are known to be contemplated, against the Company or any of its subsidiaries under any Environmental Laws in which a
governmental entity is also a party, other than such proceedings regarding which it is reasonably believed no monetary sanctions of $100,000 or more will be imposed, (y) the Company and its subsidiaries are not aware of any issues regarding
compliance with, or liabilities or other obligations under, Environmental Laws that could reasonably be expected to have a Material Adverse Effect, and (z) none of the Company and its subsidiaries anticipates material capital expenditures
relating to any Environmental Laws.
(rr) Hazardous Substances. There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission, or other release of any kind of toxic wastes or hazardous substances, including, but not limited to, any naturally occurring radioactive materials, brine, drilling mud, crude oil, natural gas
liquids and other petroleum materials, by, due to or caused by the Company or any of its subsidiaries (or, to the Company’s knowledge, any other entity (including any predecessor) for whose acts or omissions the Company or any of its
subsidiaries is or could reasonably be expected to be liable) upon any of the property now or previously owned or leased by the Company or any of its subsidiaries, or upon any other property, in violation of any Environmental Laws or in a manner or
to a location that could reasonably be expected to give rise to any liability under the Environmental Laws, except for any violation or liability which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(ss) ERISA Compliance. Except as otherwise disclosed in the General Disclosure Package and the Final Offering
Memorandum or as would not reasonably be expected to have a Material Adverse Effect, (i) each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), for which the Company or any member of its “Controlled Group” (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended (the “Code”)) would have any liability (each, a “Plan”) has been maintained in compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan,
excluding transactions effected pursuant to a statutory or administrative exemption; (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding
deficiency” as defined in Section 412 of the Code, whether or not waived, has occurred or is reasonably expected to occur; (iv) the fair market value of the assets of each Plan exceeds the present value of all benefits accrued under
such Plan (determined based on those assumptions used to fund such Plan); (v) no “reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur; and (vi) neither the
Company nor any member of the Controlled Group has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the PBGC, in the ordinary course and without default) in respect
of a Plan (including a “multiemployer plan,” within the meaning of Section 4001(a)(3) of ERISA).
(tt)
Brokers. Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against any of them or any Initial Purchaser for
a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Securities.
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(uu) No Outstanding Loans or Other Indebtedness. No relationship, direct or
indirect, exists between or among any of Company or any affiliate of the Company, on the one hand, and any director, officer, member, stockholder, customer or supplier of the Company or any affiliate of the Company, on the other hand, which is
required by the Exchange Act to be disclosed in Item 13 of an Annual Report on Form 10-K which is not so disclosed in the General Disclosure Package. There are no outstanding loans, advances (except advances for business expenses in the
ordinary course of business) or guarantees of indebtedness by the Company or any affiliate of the Company to or for the benefit of any of the officers or directors of the Company or any affiliate of the Company or any of their respective family
members.
(vv) Sarbanes-Oxley Compliance. The Company and its subsidiaries and, to the Company’s knowledge, their
respective officers and directors are in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act,” which term, as used herein, includes the rules
and regulations of the Commission promulgated thereunder).
(ww) Statistical and Market Related Data. Nothing has come
to the attention of the Company that has caused the Company to believe that the statistical and market-related data included or incorporated by reference in each of the General Disclosure Package and the Final Offering Memorandum is not based on or
derived from sources that are reliable and accurate in all material respects.
(xx) Officer’s Certificates. Any
certificate signed by an officer of the Company and delivered to the Representatives shall be deemed to be a representation and warranty by the Company to each Initial Purchaser as to the matters set forth therein.
Section 2. Purchase, Sale and Delivery of the Securities.
(a) The Firm Notes. The Company agrees to sell to the several Initial Purchasers the Firm Notes upon the terms herein set forth.
On the basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Initial Purchasers agree, severally and not jointly, to purchase from the Company the aggregate
principal amount of Firm Notes set forth opposite their names on Schedule A at a purchase price of 98.375% of the aggregate principal amount.
(b) The Closing Date. Delivery of certificates for the Firm Notes to be purchased by the Initial Purchasers and payment therefor
shall be made at the offices of Davis Polk & Wardwell LLP, 1600 El Camino Real, Menlo Park, CA 94025 (or such other place as may be agreed to by the Company and the Representatives) at 9:00 A.M. New York City time, on January 14, 2015
or such other time and date not later than 1:30 P.M. New York City time, on January 21, 2015, as the Representatives shall designate by notice to the Company (the time and date of such closing are called the “Closing
Date”).
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(c) The Optional Notes; the Subsequent Closing Date. In addition, on the basis of
the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Company hereby grants an option to the several Initial Purchasers to purchase, severally and not jointly, up to
$75,000,000 aggregate principal amount of Optional Notes from the Company at a purchase price of 98.375% of the aggregate principal amount, solely to cover over-allotments, if any. The option granted hereunder may be exercised at any time and from
time to time upon notice by the Representatives to the Company, provided that the Subsequent Closing Date (as defined below) related to any such notice occurs during the 13 day period beginning on, and including, the Closing Date. Such notice shall
set forth (i) the aggregate principal amount of Optional Notes as to which the Initial Purchasers are exercising the option, (ii) the names and denominations in which the certificates for the Optional Notes are to be registered and
(iii) the time, date and place at which such certificates will be delivered (which time and date may be simultaneous with, but not earlier than, the Closing Date; and in such case the term “Closing Date” shall refer to the time and
date of delivery of certificates for the Firm Notes and the Optional Notes). Each time and date of delivery, if subsequent to the Closing Date, is called a “Subsequent Closing Date” and shall be determined by the
Representatives and shall not be earlier than three nor later than five full business days after delivery of such notice of exercise. If any Optional Notes are to be purchased, each Initial Purchaser agrees, severally and not jointly, to purchase
the principal amount of Optional Notes (subject to such adjustments to eliminate unauthorized denominations as the Representatives may determine) that bears the same proportion to the total principal amount of Optional Notes to be purchased as the
principal amount of Firm Notes set forth on Schedule A opposite the name of such Initial Purchaser bears to the total principal amount of Firm Notes.
(d) Payment for the Securities. Payment for the Securities shall be made at the Closing Date (and, if applicable, at any
Subsequent Closing Date) by wire transfer of immediately available funds to a bank account designated by the Company.
It is
understood that Wells Fargo Securities, LLC (“Wells Fargo”) has been authorized, for its own account and the accounts of the several Initial Purchasers, to accept delivery of and receipt for, and make payment of the purchase price
for, the Firm Notes and any Optional Notes the Initial Purchasers have agreed to purchase. Wells Fargo, individually and not as the Representative of the Initial Purchasers, may (but shall not be obligated to) make payment for any Securities to be
purchased by any Initial Purchaser whose funds shall not have been received by the Representatives by the Closing Date or any Subsequent Closing Date, as the case may be, for the account of such Initial Purchaser, but any such payment shall not
relieve such Initial Purchaser from any of its obligations under this Agreement.
(e) Delivery of the Securities. The
Company shall deliver, or cause to be delivered, to Wells Fargo for the accounts of the several Initial Purchasers the Firm Notes in the form of one or more permanent global securities in definitive form (the “Global
Notes”), deposited with the Trustee as custodian for DTC and registered in the name of Cede & Co., as nominee for DTC, at the Closing Date, against the irrevocable release of a wire transfer of immediately available funds
for the amount of the purchase price therefor. The Company shall also deliver, or cause to be delivered, to Wells Fargo for the accounts of the several Initial Purchasers, the Optional Notes in the form of Global Notes, deposited with the Trustee as
custodian for DTC and registered in the name of Cede & Co., as nominee for DTC, which the Initial Purchasers have agreed to purchase at the Closing Date (or any Subsequent Closing Date, as applicable), against the irrevocable release of a
wire transfer of immediately available funds for the amount of the
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purchase price therefor. The Securities shall be registered in such names and principal amounts as the Initial Purchasers shall have requested at least two full business days prior to the Closing
Date (or any Subsequent Closing Date, as applicable) and shall be made available for inspection on the business day preceding the Closing Date (or any Subsequent Closing Date, as applicable) at a location in New York City as the Initial Purchasers
may designate. Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Initial Purchasers.
Section 3. Covenants. The Company covenants and agrees with each Initial Purchaser as follows:
(a) Notice and Effect of Material Events. If at any time prior to the completion of resales of the Securities by the Initial
Purchasers, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Initial Purchasers or for the Company, to amend or supplement the General Disclosure Package or the Final Offering
Memorandum in order that the General Disclosure Package or the Final Offering Memorandum, 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 Subsequent Purchaser, the Company will promptly (A) give the Representatives notice of such event and (B) prepare any amendment or supplement as may
be reasonably necessary to correct such statement or omission and, a reasonable amount of time prior to any proposed use or distribution, furnish the Representatives with copies of any such amendment or supplement; provided that, unless in the
opinion of counsel to the Company the use or distribution of such amendment or supplement is necessary to maintain compliance with applicable law, the Company shall not use or distribute any such amendment or supplement to which the Representatives
or counsel for the Initial Purchasers shall reasonably object. The Company will furnish to the Initial Purchasers such number of copies of such amendment or supplement as the Initial Purchasers may reasonably request.
(b) Copies of the Offering Memorandum. The Company has delivered to each Initial Purchaser, without charge, as many copies of the
Preliminary Offering Memorandum (as amended or supplemented) and documents incorporated by reference therein as such Initial Purchaser reasonably requested, and the Company hereby consents to the use of such copies. The Company will furnish to each
Initial Purchaser, without charge, such number of copies of the Final Offering Memorandum (as amended or supplemented) and documents incorporated by reference therein as such Initial Purchaser may reasonably request.
(c) Foreign Securities Law Compliance. The Company shall cooperate with the Representatives and counsel for the Initial
Purchasers to qualify or register the Securities for sale under (or obtain exemptions from the application of) Canadian provincial securities laws or other foreign laws of those jurisdictions designated by the Representatives, shall comply with such
laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Securities. The Company shall not be required to qualify as a foreign corporation or to take any action that would
subject it to general service of process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a foreign corporation. The Company will advise the Representatives promptly of the suspension of the
qualification or registration of (or any such exemption relating to) the Securities for
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offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding known by the Company for any such purpose, and in the event of the issuance of any order suspending
such qualification, registration or exemption, the Company shall use its commercially reasonable efforts to obtain the withdrawal thereof at the earliest possible moment.
(d) Agreement Not to Offer or Sell Additional Common Stock. During the period commencing on the date hereof and ending on the 60th day
following the date of the Final Offering Memorandum, the Company will not, without the prior written consent of the Representatives (which consent may be withheld at the sole discretion of the Representatives), directly or indirectly, sell, offer,
contract or grant any option to sell, pledge, transfer or establish an open “put equivalent position” or liquidate or decrease a “call equivalent position” within the meaning of Rule 16a-1(h) under the Exchange Act, or enter into
any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap or transaction is to be settled by delivery of Common
Stock or other securities, in cash or otherwise, or otherwise dispose of or transfer (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition of), or announce the offering of, or file any
registration statement (other than a registration statement on Form S-8) under the Securities Act in respect of, any shares of Common Stock, options or warrants to acquire shares of the Common Stock or securities exchangeable or exercisable for or
convertible into shares of Common Stock (other than as contemplated by this Agreement with respect to the Securities or in connection with any conversion of a Note into any Conversion Shares). The foregoing sentence shall not apply to (i) the
issuance and sale of the Securities under this Agreement, (ii) the issuance of shares of Common Stock or options to purchase Common Stock, or Common Stock upon exercise of options, pursuant to any stock option, stock bonus or other stock plan
or arrangement described in, or incorporated by reference into, the General Disclosure Package and the Final Offering Memorandum, (iii) the entry into, or the issuance by the Company of the Base Warrant Confirmations and any Additional Warrant
Confirmations, and any Common Stock upon settlement or termination of the warrant transactions evidenced by the Base Warrant Confirmations and any Additional Warrant Confirmations, or (iv) up to an aggregate of 3% of the Company’s
outstanding Common Stock issued in connection with any strategic transaction that includes a commercial relationship involving the Company and other entities (including but not limited to joint ventures, marketing or distribution arrangements,
collaboration agreements or intellectual property license agreements) for cash to one or more of such entities that are party to such transaction; provided, however, that in the case of subclause (iv) the recipients of such Common Stock
shall agree, for the benefit of the Representatives, to be bound by the restrictions set forth in Exhibit A hereto.
(e) No
Manipulation of Price. The Company will not take, directly or indirectly, any action designed to cause or result in, or that has constituted or might reasonably be expected to constitute, under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any securities of the Company.
(f) Listing. On or prior to the Closing Date, the Maximum Number
of Underlying Securities and the Warrant Securities shall be approved for listing on NASDAQ, subject to notice of issuance.
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(g) Available Common Shares. The Company will reserve and keep available at all
times, free of pre-emptive rights, the Maximum Number of Underlying Securities and the Warrant Securities, for the purpose of enabling the Company to satisfy all obligations to issue Conversion Shares and the Warrant Securities, as the case may be.
(h) Use of Proceeds. The Company shall use the proceeds of the sale of the Securities in the manner described in the
General Disclosure Package and the Final Offering Memorandum, including, without limitation, by (i) causing a portion of such proceeds to be irrevocably deposited on the Closing Date with the trustee for the 2020 Notes in an amount sufficient
to discharge the 2020 Notes in full in accordance with the terms of the 2020 Notes and (ii) repurchasing shares of Common Stock as set forth in the General Disclosure Package and the Final Offering Memorandum.
The Representatives, on behalf of the several Initial Purchasers, may, in their sole discretion, waive in writing the performance by the
Company of any one or more of the foregoing covenants or extend the time for their performance.
Section 4. Payment of
Expenses. The Company agrees to pay all costs, fees and expenses incurred in connection with the performance of its obligations hereunder and in connection with the transactions contemplated hereby, including without limitation (i) all
expenses incident to the issuance and delivery of the Securities (including all printing and engraving costs), (ii) the costs and charges of the Trustee and any transfer agent, registrar or depositary, (iii) all necessary issue, transfer
and other stamp taxes in connection with the issuance and sale of the Securities to the Initial Purchasers, (iv) all fees and expenses of the Company’s counsel, independent public or certified public accountants and other advisors,
(v) all costs and expenses incurred in connection with the preparation, printing, shipping and distribution of the Preliminary Offering Memorandum (including financial statements, exhibits, schedules, consents and certificates of experts), any
Issuer Written Information, the Final Term Sheet and the Final Offering Memorandum (including financial statements, exhibits, schedules, consents and certificates of experts), and all amendments and supplements thereto, and this Agreement,
(vi) all filing fees, attorneys’ fees and expenses incurred by the Company or the Initial Purchasers in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the
Securities for offer and sale under the state securities or blue sky laws or the provincial securities laws of Canada, and, if requested by the Representatives, preparing and printing a “Blue Sky Survey” or memorandum, and any supplements
thereto, advising the Initial Purchasers of such qualifications, registrations and exemptions, (vii) all costs and expenses incident to listing the Maximum Number of Underlying Securities and the Warrant Securities on NASDAQ, (viii) any
filing fees incident to, and the reasonable fees and expenses of counsel for the Initial Purchasers in connection with, the Financial Industry Regulatory Authority, Inc.’s (“FINRA’s”) review and approval of the Initial
Purchasers’ participation in the offering and distribution of the Securities, (ix) expenses and taxes incident to the sale and delivery of the Securities to be sold to the Initial Purchasers hereunder, (x) any fees charged by rating
agencies for the rating of the Securities, (xi) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Securities, including,
without limitation, expenses associated with the preparation or dissemination of any electronic road show, expenses associated with production of road show slides and graphics, and fees and expenses of any consultants engaged by the Company in
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connection with the road show presentations, if any, (xii) the fees and expenses, if any, incurred in connection with the admission of the Securities for trading on any appropriate market
system and (xiii) all other cost and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section. Except as provided in this Section 4, Section 7, Section 9 and
Section 10 hereof, the Initial Purchasers shall pay their own expenses, including the fees and disbursements of their counsel.
Section 5. Conditions of the Obligations of the Initial Purchasers. The obligations of the several Initial Purchasers to purchase
and pay for the Securities as provided herein on the Closing Date and, with respect to the Optional Notes, any Subsequent Closing Date, shall be subject to the accuracy of the representations and warranties on the part of the Company set forth in
Section 1 hereof as of the date hereof and as of the Closing Date as though then made, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the timely performance by the Company of its
covenants and other obligations hereunder, and to each of the following additional conditions:
(a) Accountants’ Comfort Letter.
On the date hereof, the Representatives shall have received from KPMG LLP, independent registered public accounting firm for the Company, one or more “comfort letters” dated the date hereof addressed to the Initial Purchasers, in form
and substance satisfactory to the Representatives, covering the financial information in the General Disclosure Package, the Final Offering Memorandum and other customary matters.
(b) No Material Adverse Change. For the period from and after the date of this Agreement, or the respective dates as of which
information is given in the General Disclosure Package, and prior to the Closing Date and, with respect to the Optional Notes, any Subsequent Closing Date:
(i) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded the Company of any of the securities of the Company or any of its subsidiaries or in the rating outlook for the
Company by any “nationally recognized statistical rating organization,” as such term is defined in Section 3(a)(62) of the Exchange Act; and
(ii) there shall not have occurred any change, or any development involving a prospective change, in the condition, financial
or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the General Disclosure Package (exclusive of any amendment or supplement thereto) provided to the prospective
purchasers of the Securities that, in the judgment of the Representatives, is material and adverse and that makes it, in the judgment of the Representatives, impracticable to market the Securities on the terms and in the manner contemplated in the
General Disclosure Package (exclusive of any amendment or supplement thereto).
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(c) Opinions of Counsel for the Company. The Initial Purchasers shall have received
(i) an opinion on each of the Closing Date and any Subsequent Closing Date and (ii) a negative assurance letter on the Closing Date, in each case of Cooley LLP, counsel for the Company, dated as of such date, in form and substance
reasonably satisfactory to the Representatives.
(d) Opinion of Counsel for the Initial Purchasers. The Initial Purchasers shall
have received (i) an opinion on each of the Closing Date and any Subsequent Closing Date and (ii) a negative assurance letter on the Closing Date, in each case of Davis Polk & Wardwell LLP, counsel for the Initial Purchasers,
dated as of such date, with respect to such matters as may be reasonably requested by the Initial Purchasers.
(e) Officers’
Certificate. The Initial Purchasers shall have received on the Closing Date a certificate dated as of the Closing Date and signed by the Chief Executive Officer or President of the Company and the Chief Financial Officer or Chief Accounting
Officer of the Company to the effect set forth in Sections 5(b)(i) and 5(b)(ii), and further to the effect that the representations and warranties of the Company contained in this Agreement were true and correct as of the Applicable Time and are
true and correct as of the Closing Date; that the Company has complied with all of the agreements and satisfied all of the conditions on their part to be performed or satisfied hereunder on or before the Closing Date; and that the sale of the
Securities has not been enjoined (temporarily or permanently).
(f) Bring-down Comfort Letter. On the Closing Date, the
Representatives shall have received from KPMG LLP, independent registered public accounting firm for the Company, a letter dated such date, in form and substance satisfactory to the Representatives, to the effect that they reaffirm the statements
made in the letter furnished by them pursuant to subsection (a) of this Section 5, except that it shall cover any amendment or supplement to the Final Offering Memorandum and the specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the Closing Date.
(g) Indenture. On the Closing Date, the Company shall have
executed and delivered the Indenture, in form and substance reasonably satisfactory to the Initial Purchasers, and the Initial Purchasers shall have received executed copies thereof.
(h) Sale of Securities Not Enjoined. The sale of the Securities shall not be enjoined (temporarily or permanently) on the Closing Date
or the Subsequent Closing Date, as applicable.
(i) Lock-Up Agreement from Directors and Executive Officers of the Company. On or
prior to the date hereof, the Company shall have furnished to the Representatives an agreement in the form of Exhibit A hereto from each director and executive officer of the Company and such agreement shall be in full force and effect on
each of the Closing Date and any Subsequent Closing Date.
(j) Exchange Listing. On or prior to the Closing Date, an application for
the listing of the Maximum Number of Underlying Securities and the Warrant Securities shall have been approved for listing on NASDAQ, subject in each case to official notice of issuance.
(k) Amendment of Credit Agreement. On or prior to the Closing Date, (i) the Company shall have executed and delivered that certain
Amendment No. 6 to the Credit Agreement dated as of January 7, 2014 in substantially the form provided to the Initial Purchasers prior to the date hereof and (ii) the Initial Purchasers shall have received a certificate signed by the
Chief Executive Officer or President of the Company and the Chief Financial Officer or Chief Accounting Officer of the Company to the effect that the conditions to the effectiveness of such amendment have been satisfied.
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(l) Additional Documents. On or before each of the Closing Date and any Subsequent Closing
Date, the Representatives and counsel for the Initial Purchasers shall have received such information, documents and opinions as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Securities as
contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the Closing Date and, with respect to the Optional Notes, at any time prior to the applicable Subsequent Closing Date, which termination shall be without liability on the part of
any party to any other party, except that Section 4, Section 7, Section 9 and Section 10 shall at all times be effective and shall survive such termination.
Section 6. Subsequent Offers and Resales of the Securities.
(a) Offers and Sales Procedures. Each of the Initial Purchasers and the Company hereby establishes and agrees to observe the following
procedures in connection with the offer and sale of the Securities:
(i) offers and sales of the Securities shall be made
to such persons and in such manner as is contemplated by the Offering Memorandum. Each Initial Purchaser severally agrees that it will not offer, sell or deliver any of the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof, and (other than as provided in Section 4 and Section 7 hereof) that it will take at its own expense whatever action is required to permit its purchase and resale of the
Securities in such jurisdictions. The Company has not entered into any contractual arrangement, other than this Agreement, with respect to the distribution of the Securities or any shares of Common Stock issuable upon conversion of the Securities,
and the Company will not enter into any such arrangement except as contemplated thereby;
(ii) no general solicitation or
general advertising (within the meaning of Rule 502(c) under the Securities Act) will be engaged in the United States in connection with the offering or sale of the Securities; and
(iii) each of the Securities will bear, to the extent applicable, the legend contained in “Transfer Restrictions” in
the General Disclosure Package and the Final Offering Memorandum for the time period and upon the other terms stated therein.
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(b) Covenants of the Company. The Company covenants with each Initial Purchaser as
follows:
(i) the Company agrees that it will not and will cause its Affiliates not to, directly or indirectly, solicit any
offer to buy, sell or make any offer or sale of, or otherwise negotiate in respect of, securities of the Company of any class if, as a result of the doctrine of “integration” referred to in Rule 502 under the Securities Act, such
offer or sale would render invalid (for the purpose of (i) the sale of the offered Securities by the Company to the Initial Purchasers, (ii) the resale of the offered Securities by the Initial Purchasers to Subsequent Purchasers or
(iii) the resale of the offered Securities by such Subsequent Purchasers to others) the exemption from the registration requirements of the Securities Act provided by Section 4(2) thereof or by Rule 144A thereunder or otherwise;
(ii) the Company agrees that, in order to render the offered Securities eligible for resale pursuant to Rule 144A,
while any of the offered Securities remain outstanding, it will make available, upon request, to any holder of offered Securities or prospective purchasers of Securities the information specified in Rule 144A(d)(4), unless the Company furnishes
information to the Commission pursuant to Section 13 or 15(d) of the Exchange Act; and
(iii) the Company agrees
that any Security that is repurchased or owned by the Company or any of its Affiliates may not be resold by the Company or any such Affiliate 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 Security no longer being a “restricted security” (as such term is defined under Rule 144(a)(3) under the Securities Act).
(c) Representations, Warranties and Agreements of the Initial Purchasers. Each Initial Purchaser severally and not jointly represents
and warrants to, and agrees with, the Company that it is a Qualified Institutional Buyer and an “accredited investor” within the meaning of Rule 501(a) under the Securities Act. Each Initial Purchaser understands that the
Securities have not been and will not be registered under the Securities Act and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the
Securities Act. Each Initial Purchaser severally represents and agrees that it has not offered or sold, and will not offer or sell, any offered Securities constituting part of its allotment within the United States except in accordance with
Rule 144A or another applicable exemption from the registration requirements of the Securities Act. Accordingly, neither it nor any person acting on its behalf has made or will make offers or sales of the Securities in the United States by
means of any form of general solicitation or general advertising (within the meaning of Regulation D) in the United States. Each Initial Purchaser will take commercially reasonable steps to inform, and cause each of its affiliates (as such term is
defined in Rule 501(b) under the Securities Act (each, an “Affiliate”)) to take reasonable steps to inform, persons acquiring Securities from such Initial Purchaser or Affiliate, as the case may be, that the Securities (A) have
not been and will not be registered under the Securities Act, (B) are being sold to them without registration under the Securities Act in reliance on Rule 144A under the Securities Act, as the case may be, and (C) may
not be offered, sold or otherwise transferred except (1) to the Company or (2) in accordance with (x) Rule 144A to a person whom the seller reasonably believes is a Qualified Institutional Buyer that is purchasing such Securities
for its own account or for the account of a Qualified Institutional Buyer to whom notice is given that the offer, sale or transfer is being made in reliance on Rule 144A or (y) pursuant to another available exemption from registration
under the Securities Act.
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Section 7. Reimbursement of Initial Purchasers’ Expenses. If this Agreement is
terminated by the Representatives pursuant to Section 5 or Section 12, or if the sale to the Initial Purchasers of the Securities on the Closing Date or any Subsequent Closing Date is not consummated because of any refusal, inability or failure on
the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement, the Company will reimburse the Initial
Purchasers, severally, upon demand for all accountable out-of-pocket expenses that shall have been reasonably incurred by the Representatives and the Initial Purchasers in connection with this Agreement or the offering contemplated hereunder.
Section 8. Effectiveness of this Agreement. This Agreement shall become effective upon the execution of this Agreement by the
parties hereto.
Section 9. Indemnification.
(a) Indemnification of the Initial Purchasers by the Company. The Company agrees to indemnify and hold harmless each Initial Purchaser,
its Affiliates involved in the transactions contemplated hereunder, its directors, officers, employees and agents, and each person, if any, who controls any Initial Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all loss, claim, damage, liability or expense (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action
or claim, as such expenses are incurred) caused by any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, the General Disclosure Package, the information contained in the Final Term
Sheet, any Issuer Written Information prepared by or on behalf of, used by, referred to or approved by the Company, or the Final Offering Memorandum, or any amendment or supplement to the foregoing, or caused by the omission or alleged omission
therefrom of 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 the foregoing indemnity agreement shall not apply to
any loss, claim, damage, liability or expense to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with the
Initial Purchaser Information (as defined below). The indemnity set forth in this Section 9(a) shall be in addition to any liabilities that the Company may otherwise have.
(b) Indemnification of the Company and its Directors and Officers. Each Initial Purchaser agrees, severally and not jointly, to
indemnify and hold harmless the Company, each of its directors, each of its officers and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to such Initial Purchaser, but only with reference to information relating to such Initial Purchaser furnished to the Company by such Initial Purchaser through the Representatives exclusively for
use in the Preliminary Offering Memorandum, General Disclosure Package, the Final Term Sheet, any Issuer Written Information or the Final Offering Memorandum (or any amendment or supplement thereto). The
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Company hereby acknowledges that the only such information are the statements set forth in the first paragraph under the subheading “Commissions and Discounts,” the second and third
sentences in the first paragraph under the subheading “Notes Are Not Being Registered,” the third and fourth sentences in the paragraph under the subheading “New Issue of Notes,” and the first and second paragraphs under the
subheading “Price Stabilization, Short Positions,” in each case, under the caption “Plan of Distribution” in the Preliminary Memorandum and the Final Offering Memorandum (collectively, the “Initial Purchaser
Information”). The indemnity set forth in this Section 9(b) shall be in addition to any liabilities that each Initial Purchaser may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 9 of notice of
the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 9, notify the indemnifying party in writing of the commencement thereof; but the failure to so
notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any liability other than the indemnification obligation provided in paragraph (a) or (b) above. In case any such action is brought against
any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it shall elect, jointly with all other indemnifying
parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the
indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of such indemnifying party’s election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party under this Section 9 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (other than local counsel), representing the indemnified parties
who are parties to such action) or (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in each
of which cases the reasonable fees and expenses of counsel shall be at the expense of the indemnifying party. The firm referred to in clause (i) of the immediately preceding sentence shall be designated in writing by the Representatives, in the
case of the parties indemnified pursuant to Section 9(a), and by the Company, in the case of parties indemnified pursuant to Section 9(b).
26
(d) Settlements. The indemnifying party under this Section 9 shall not be liable for any
settlement of any proceeding effected without its written consent (such consent not to be unreasonably withheld, delayed or conditioned), but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent (i) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.
Section 10.
Contribution. If the indemnification provided for in Section 9 is for any reason unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Initial Purchasers, on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the
Initial Purchasers, on the other hand, in connection with the statements or omissions or inaccuracies in the representations and warranties herein which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company, on the one hand, and the Initial Purchasers, on the other hand, in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company, and the total initial purchasers’ discount received by the Initial Purchasers,
bear to the aggregate initial offering price of the Securities as set forth on the cover of the Final Offering Memorandum. The relative fault of the Company, on the one hand, and the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact or any such inaccurate or alleged inaccurate representation or warranty relates to
information supplied by the Company, on the one hand, or the Initial Purchasers, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed
to include, subject to the limitations set forth in Section 9(c), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions set forth in Section 9(c) with
respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 10; provided, however, that no additional notice shall be required with respect to any action for which notice has
been given under Section 9(c) for purposes of indemnification.
27
Each of the Company and the Initial Purchasers agrees that it would not be just and equitable if
contribution pursuant to this Section 10 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable
considerations referred to in this Section 10.
Notwithstanding the provisions of this Section 10, no Initial Purchaser shall be required
to contribute any amount in excess of the amount by which the total price at which the Securities purchased by it and distributed to the public were offered to the public exceeds the amount of any damages that such Initial Purchaser has otherwise
been required to pay by reason of any 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. The Initial Purchasers’ obligations to contribute pursuant to this Section 10 are several, and not joint, in proportion to their respective commitments as set
forth opposite their names in Schedule A. For purposes of this Section 10, each director, officer, employee and agent of an Initial Purchaser and each person, if any, who controls an Initial Purchaser within the meaning of the Section 15
of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as such Initial Purchaser, and each director of the Company, each officer of the Company and each person, if any, who controls the Company within
the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as the Company.
Section 11.
Default of One or More of the Several Initial Purchasers. If, on the Closing Date or a Subsequent Closing Date, as the case may be, any one or more of the several Initial Purchasers shall fail or refuse to purchase Securities that it or they
have agreed to purchase hereunder on such date, and the aggregate principal amount of Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase does not exceed 10% of the aggregate principal
amount of the Securities to be purchased on such date, the other Initial Purchasers shall be obligated, severally, in the proportions that the principal amount of Firm Notes set forth opposite their respective names on Schedule A bears to the
aggregate principal amount of Firm Notes set forth opposite the names of all such non-defaulting Initial Purchasers, or in such other proportions as may be specified by the Representatives with the consent of the non-defaulting Initial Purchasers,
to purchase the Securities which such defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase on such date. If, on the Closing Date or a Subsequent Closing Date, as the case may be, any one or more of the Initial
Purchasers shall fail or refuse to purchase Securities and the aggregate principal amount of Securities with respect to which such default occurs exceeds 10% of the aggregate principal amount of Securities to be purchased on such date, and
arrangements satisfactory to the Representatives for the purchase of such Securities are not made within 48 hours after such default, this Agreement shall terminate without liability of any party to any other party except that the provisions of
Section 4, Section 7, Section 9 and Section 10 shall at all times be effective and shall survive such termination. In any such case any of the Representatives or the Company shall have the right to postpone the Closing Date or a Subsequent Closing
Date, as the case may be, but in no event for longer than seven days in order that the required changes, if any, to the General Disclosure Package and the Final Offering Memorandum or any other documents or arrangements may be effected.
28
As used in this Agreement, the term “Initial Purchaser” shall be deemed to include any
person substituted for a defaulting Initial Purchaser under this Section 11. Any action taken under this Section 11 shall not relieve any defaulting Initial Purchaser from liability in respect of any default of such Initial Purchaser under this
Agreement.
Section 12. Termination of this Agreement. Prior to the Closing Date this Agreement may be terminated by the
Representatives by notice given to the Company if at any time (i) trading generally shall have been suspended or materially limited on, or by, as the case may be, any of the New York Stock Exchange, NASDAQ or the over the counter market,
(ii) trading of any securities issued or guaranteed by the Company shall have been suspended or materially limited on any exchange or in any over the counter market, (iii) a material disruption in securities settlement, payment or
clearance services in the United States or other relevant jurisdiction shall have occurred, (iv) any moratorium on commercial banking activities shall have been declared by Federal or New York State authorities or (v) there shall have
occurred any outbreak or escalation of hostilities, or any change in financial markets or any change or development involving a prospective change in national or international political, financial or economic conditions, or any calamity or crisis
that, in the Representatives’ judgment, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in the judgment of the Representatives, impracticable or inadvisable to proceed with the
offer, sale or delivery of the Securities on the terms and in the manner contemplated in the General Disclosure Package or the Final Offering Memorandum.
Section 13. No Advisory or Fiduciary Responsibility. The Company acknowledges and agrees that: (i) the purchase and
sale of the Securities pursuant to this Agreement, including the determination of the initial offering price of the Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one
hand, and the several Initial Purchasers, on the other hand, and the Company is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (ii) in
connection with each transaction contemplated hereby and the process leading to such transaction each Initial Purchaser is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary of the Company or its
affiliates, stockholders, creditors or employees or any other party; (iii) no Initial Purchaser has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Company with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether such Initial Purchaser has advised or is currently advising the Company on other matters) and no Initial Purchaser has any obligation to the Company with respect to the
offering contemplated hereby except the obligations expressly set forth in this Agreement; (iv) the several Initial Purchasers and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ
from those of the Company and that the several Initial Purchasers have no obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (v) the Initial Purchasers have not provided any legal,
accounting, regulatory or tax advice with respect to the offering contemplated hereby and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent they deemed appropriate.
29
This Agreement supersedes all prior agreements and understandings (whether written or oral)
between the Company and the several Initial Purchasers, or any of them, with respect to the subject matter hereof. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the
several Initial Purchasers with respect to any breach or alleged breach of agency or fiduciary duty relating to the transactions contemplated in this Agreement.
Section 14. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations,
warranties and other statements of the Company, of its officers, and of the several Initial Purchasers set forth in or made pursuant to this Agreement (i) will remain operative and in full force and effect, regardless of any
(A) investigation, or statement as to the results thereof, made by or on behalf of any Initial Purchaser, the officers or employees of any Initial Purchaser, or the Company, the officers or employees of the Company, or any person controlling
the Company, as the case may be or (B) acceptance of the Securities and payment for them hereunder and (ii) will survive delivery of and payment for the Securities sold hereunder and any termination of this Agreement.
Section 15. Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and
confirmed to the parties hereto as follows:
If to the Representatives:
Wells Fargo Securities, LLC
375 Park Avenue
New York, NY 10152
Facsimile: (212) 214-5918
Attention: Equity Syndicate Department
and
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
One Bryant Park
New York, NY 10036
Facsimile: (646) 855-3073 (cc: (212) 230-8730)
Attention: Syndicate Department (cc: ECM Legal)
with a copy to:
Davis Polk & Wardwell LLP
1600 El Camino Real
Menlo Park, CA 94025
Facsimile: (650) 752-2022
Attention: Bruce K. Dallas
30
If to the Company:
Brocade Communications Systems, Inc.
130 Holger Way
San Jose, California 95134
Attention: Chief Financial Officer, with a copy to General Counsel
With a copy to:
Cooley LLP
3175 Hanover Street
Palo Alto, California 94304
Attention: Mischi a Marca
Any party hereto may change the address for receipt of communications by giving written notice to the others.
Section 16. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, including any
substitute Initial Purchasers pursuant to Section 11 hereof, and to the benefit of (i) the Company, its directors, any person who controls the Company within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act and any officer of the Company, (ii) the Initial Purchasers, the officers, directors, employees and agents of the Initial Purchasers, and each person, if any, who controls any Initial Purchaser within the meaning of the Securities
Act and the Exchange Act, and (iii) the respective successors and assigns of any of the above, all as and to the extent provided in this Agreement, and no other person shall acquire or have any right under or by virtue of this Agreement. The
term “successors and assigns” shall not include a purchaser of any of the Securities from any of the several Initial Purchasers merely because of such purchase.
Section 17. Partial Unenforceability. The invalidity or unenforceability of any Section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be
made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.
Section 18. Governing
Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
Section 19. General Provisions. This Agreement may be executed in two or more counterparts, each one of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be
waived unless waived in writing by each party whom the condition is meant to benefit. The section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.
31
Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions hereof, including, without limitation, the indemnification provisions of Section 9 and the contribution provisions of Section 10, and is fully informed regarding said
provisions. Each of the parties hereto further acknowledges that the provisions of Sections 9 and 10 hereto fairly allocate the risks in light of the ability of the parties to investigate the Company, its affairs and its business in order to assure
that adequate disclosure has been made in the Preliminary Offering Memorandum and the Final Offering Memorandum (and any amendments and supplements thereto).
32
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.
|
|
|
| Very truly yours, |
|
| BROCADE COMMUNICATIONS SYSTEMS, INC. |
|
|
| By: |
|
/s/ Daniel W. Fairfax |
|
|
Daniel W. Fairfax |
|
|
Senior Vice President, Finance and Chief Financial Officer |
[Signature Page to Purchase Agreement]
The foregoing Purchase Agreement is hereby confirmed and accepted by the Representatives as of
the date first above written.
|
|
|
| WELLS FARGO SECURITIES, LLC |
| MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED |
|
|
Acting as Representatives of the |
|
|
several Initial Purchasers named in |
|
|
the attached Schedule A. |
|
|
| By: |
|
Wells Fargo Securities, LLC |
|
|
| By: |
|
/s/ Craig McCracken |
|
|
Name: Craig McCracken |
|
|
Title: Managing Director |
|
|
| By: |
|
Merrill Lynch, Pierce, Fenner & Smith
Incorporated |
|
|
| By: |
|
/s/ Gary Kirkham |
|
|
Name: Gary Kirkham |
|
|
Title: Managing Director |
[Signature Page to Purchase Agreement]
2
SCHEDULE A
|
|
|
|
|
| Initial Purchasers |
|
Principal
Amount of Firm
Notes to be
Purchased |
|
| Wells Fargo Securities, LLC |
|
$ |
225,000,000 |
|
| Merrill Lynch, Pierce, Fenner & Smith
Incorporated |
|
|
225,000,000 |
|
| Deutsche Bank Securities Inc. |
|
|
50,000,000 |
|
|
|
|
|
|
| Total |
|
$ |
500,000,000 |
|
SCHEDULE B
Pricing Term Sheet
[Term Sheet Follows]
|
|
|
| PRICING TERM SHEET |
|
Strictly Confidential |
| Dated January 8, 2015 |
|
|
Brocade Communications Systems, Inc.
$500,000,000
1.375%
Convertible Senior Notes due 2020
The information in this pricing term sheet (the “Pricing Term Sheet”) supplements Brocade
Communications Systems, Inc.’s preliminary offering memorandum, dated January 7, 2015 (the “Preliminary Offering Memorandum”), and supersedes the information in the Preliminary Offering Memorandum only to the extent inconsistent
with the information in the Preliminary Offering Memorandum. In all other respects, the Pricing Term Sheet is qualified in its entirety by reference to the Preliminary Offering Memorandum, including all other documents incorporated by reference
therein. Terms used herein but not defined herein shall have the respective meanings as set forth in the Preliminary Offering Memorandum. All references to dollar amounts are references to U.S. dollars.
|
|
|
| Issuer: |
|
Brocade Communications Systems, Inc., a Delaware corporation. |
|
|
| Ticker / Exchange for Common Stock: |
|
BRCD / The NASDAQ Global Select Market (“NASDAQ”). |
|
|
| Title of Securities: |
|
1.375% Convertible Senior Notes due 2020 (the “Notes”). |
|
|
| Aggregate Principal Amount Offered: |
|
$500,000,000 aggregate principal amount of Notes. |
|
|
| Initial Purchasers’ Over-Allotment Option: |
|
$75,000,000 aggregate principal amount of Notes. |
|
|
| Trade Date: |
|
January 9, 2015. |
|
|
| Expected Settlement Date: |
|
January 14, 2015. |
|
|
| Issue Price: |
|
The Notes will be issued at a price of 100% of their principal amount. |
|
|
| Maturity: |
|
The Notes will mature on January 1, 2020, unless earlier repurchased or converted. |
|
|
| Interest Rate: |
|
1.375% per year. |
|
|
| Interest Payment Dates: |
|
Interest will accrue from the Expected Settlement Date and will be payable semi-annually in arrears on January 1 and July 1 of each year, beginning on July 1, 2015. |
|
|
| NASDAQ Last Reported Sale Price on January 8, 2015: |
|
$11.80 per share of the Issuer’s common stock. |
|
|
| Conversion Premium: |
|
Approximately 35% above the NASDAQ Last Reported Sale Price on January 8, 2015. |
|
|
| Initial Conversion Price: |
|
Approximately $15.93 per share of the Issuer’s common stock. |
|
|
|
| Initial Conversion Rate: |
|
62.7746 shares of the Issuer’s common stock per $1,000 principal amount of Notes. |
|
|
| Use of Proceeds: |
|
The Issuer estimates that the proceeds from the Notes offering will be approximately $490.4 million (or $564.1 million if the initial
purchasers exercise their over-allotment option in full), after deducting initial purchasers’ discounts and estimated offering expenses.
The Issuer entered into convertible note hedge transactions with one or more of the initial purchasers or their affiliates or other financial institutions (the
“option counterparties”). The Issuer also entered into warrant transactions with the option counterparties. The Issuer expects to use approximately $30.4 million of the net proceeds from the Notes offering to pay the cost of the
convertible note hedge transactions (after such cost is partially offset by the proceeds to the Issuer from the sale of the warrants).
The Issuer expects to use approximately $48.9 million of the net proceeds from the Notes offering to repurchase shares of its common stock concurrently with
the pricing of the Notes offering in privately negotiated transactions effected through Wells Fargo Securities, LLC or one of its affiliates as the Issuer’s agent. The Issuer purchased approximately 4.1 million shares of its common stock from
purchasers of the Notes at a purchase price per share equal to the NASDAQ Last Reported Sale Price on January 8, 2015, which was $11.80 per share.
The Issuer intends to use the remainder of the net proceeds from the Notes offering to redeem all of its outstanding 6.875% senior secured notes due 2020 (the
“2020 notes”), and for general corporate purposes, including potential acquisitions and other business development activities. Concurrently with the closing of the Notes offering, the Issuer will issue a notice of redemption for the 2020
notes and irrevocably deposit a portion of the net proceeds from the Notes offering with the trustee for the 2020 notes sufficient to discharge the 2020 notes in full, all in accordance with the terms of the 2020 notes. In addition, concurrently
with the closing of the Notes offering the Issuer will terminate its senior secured credit facility. See “Use of Proceeds” in the Preliminary Offering Memorandum.
If the initial purchasers exercise their over-allotment option, the Issuer may sell additional warrants and use a portion of the net proceeds from the sale of
the additional Notes, together with the proceeds from the sale of the additional warrants, to enter into additional convertible note hedge transactions and for general corporate purposes as described above. |
2
|
|
|
| Convertible Note Hedge and Warrant Transactions: |
|
In connection with the pricing of the Notes, the Issuer entered into
convertible note hedge transactions with the option counterparties. The Issuer also entered into warrant transactions with the option counterparties. The convertible note hedge transactions are expected generally to reduce the potential dilution,
and/or offset potential cash payments in excess of the principal amount of converted Notes, upon conversion of the Notes in the event that the market price per share of the Issuer’s common stock, as measured under the terms of the convertible
note hedge transactions, is greater than the strike price of the convertible note hedge transactions, which initially corresponds to the conversion price of the Notes and is subject to anti-dilution adjustments substantially similar to those
applicable to the conversion rate of the Notes. If, however, the market price per share of the Issuer’s common stock, as measured under the terms of the warrant transactions, exceeds the strike price of the warrants, there would nevertheless be
dilution to the extent that such market price exceeds the strike price of the warrants (unless, subject to certain conditions, the Issuer elects to settle the warrants in cash). |
|
|
| Repurchases of Shares of the Issuer’s Common Stock: |
|
The Issuer expects to use approximately $48.9 million of the net
proceeds from the Notes offering to repurchase shares of its common stock concurrently with the pricing of the Notes offering in privately negotiated transactions effected through Wells Fargo Securities, LLC or one of its affiliates as the
Issuer’s agent. The Issuer purchased approximately 4.1 million shares of its common stock from purchasers of the Notes at a purchase price per share equal to the NASDAQ Last Reported Sale Price on January 8, 2015, which was $11.80 per
share. |
|
|
| Joint Book-Running Managers: |
|
Wells Fargo Securities, LLC Merrill Lynch,
Pierce, Fenner & Smith
Incorporated |
|
|
| Co-Manager: |
|
Deutsche Bank Securities Inc. |
|
|
| CUSIP Number: |
|
111621 AP3 |
|
|
| ISIN: |
|
US111621AP39 |
|
|
| Increase in Conversion Rate upon Conversion upon a Make-Whole Fundamental Change: |
|
The following table sets forth the number of additional shares by which the conversion rate will be increased per $1,000 principal amount of Notes for a holder that converts its Notes in connection with a make-whole fundamental
change (as defined in the Preliminary Offering Memorandum) for each stock price and effective date set forth below: |
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Stock Price |
|
| Effective Date |
|
$11.80 |
|
|
$12.00 |
|
|
$14.00 |
|
|
$15.93 |
|
|
$18.00 |
|
|
$20.00 |
|
|
$25.00 |
|
|
$30.00 |
|
|
$35.00 |
|
|
$40.00 |
|
|
$45.00 |
|
|
$50.00 |
|
| January 14, 2015 |
|
|
21.9711 |
|
|
|
21.1050 |
|
|
|
14.3336 |
|
|
|
10.0992 |
|
|
|
7.0906 |
|
|
|
5.1350 |
|
|
|
2.4556 |
|
|
|
1.2663 |
|
|
|
0.6860 |
|
|
|
0.3800 |
|
|
|
0.2093 |
|
|
|
0.1102 |
|
| January 1, 2016 |
|
|
21.9711 |
|
|
|
20.3208 |
|
|
|
13.3943 |
|
|
|
9.1450 |
|
|
|
6.1994 |
|
|
|
4.3405 |
|
|
|
1.9184 |
|
|
|
0.9257 |
|
|
|
0.4743 |
|
|
|
0.2500 |
|
|
|
0.1307 |
|
|
|
0.0648 |
|
| January 1, 2017 |
|
|
21.9711 |
|
|
|
19.8058 |
|
|
|
12.5443 |
|
|
|
8.1940 |
|
|
|
5.2800 |
|
|
|
3.5180 |
|
|
|
1.3872 |
|
|
|
0.6123 |
|
|
|
0.2943 |
|
|
|
0.1475 |
|
|
|
0.0738 |
|
|
|
0.0350 |
|
| January 1, 2018 |
|
|
21.9711 |
|
|
|
19.5158 |
|
|
|
11.6436 |
|
|
|
7.0791 |
|
|
|
4.1861 |
|
|
|
2.5610 |
|
|
|
0.8380 |
|
|
|
0.3300 |
|
|
|
0.1517 |
|
|
|
0.0763 |
|
|
|
0.0389 |
|
|
|
0.0190 |
|
| January 1, 2019 |
|
|
21.9711 |
|
|
|
19.4125 |
|
|
|
10.3657 |
|
|
|
5.3792 |
|
|
|
2.5967 |
|
|
|
1.3035 |
|
|
|
0.3008 |
|
|
|
0.1123 |
|
|
|
0.0600 |
|
|
|
0.0373 |
|
|
|
0.0231 |
|
|
|
0.0128 |
|
| January 1, 2020 |
|
|
21.9711 |
|
|
|
20.5583 |
|
|
|
8.6543 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
|
|
0.0000 |
|
The exact stock prices and effective dates may not be set forth in the table above, in which case
| |
• |
|
If the stock price is between two stock prices in the table or the effective date is between two effective dates in the table, the number of additional shares by which the conversion rate will be increased will be
determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock prices and the earlier and later effective dates, as applicable, based on a 365-day year. |
| |
• |
|
If the stock price is greater than $50.00 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to the
conversion rate. |
| |
• |
|
If the stock price is less than $11.80 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to the conversion
rate. |
Notwithstanding the foregoing, in no event will the conversion rate per $1,000 principal amount of Notes exceed 84.7457 shares of the
Issuer’s common stock, subject to adjustment in the same manner as the conversion rate as set forth under “Description of Notes—Conversion Rights—Conversion Rate Adjustments” in the Preliminary Offering Memorandum.
Capitalization
The following table sets forth the
Issuer’s cash, cash equivalents and capitalization as of November 1, 2014:
| |
• |
|
on an actual basis; and |
| |
• |
|
on an as adjusted basis to give effect to the sale of $500.0 million aggregate principal amount of the Notes (assuming the initial purchasers’ over-allotment option is not exercised) after deducting the initial
purchasers’ discounts and estimated offering expenses payable by the Issuer, paying the cost of the convertible note hedge transactions (after taking into account the proceeds to the Issuer from the warrant transactions), and the use of
approximately $48.9 million of the net proceeds to repurchase shares of the Issuer’s common stock concurrently with the pricing of the Notes offering. |
The following data should be read together with the Issuer’s financial statements, the related notes thereto and other financial information included in
the Preliminary Offering Memorandum and incorporated therein by reference.
|
|
|
|
|
|
|
|
|
| |
|
As of November 1, 2014 |
|
| |
|
Actual |
|
|
As
Adjusted(1) |
|
| |
|
(in thousands, except par value) |
|
| Cash and cash equivalents |
|
$ |
1,255,017 |
|
|
$ |
1,666,135 |
|
|
|
|
|
|
|
|
|
|
| Long-term debt (including current portion): |
|
|
|
|
|
|
|
|
| 1.375% convertible senior notes offered hereby(2) |
|
$ |
— |
|
|
|
500,000 |
|
| Senior secured revolving credit facility(3) |
|
|
— |
|
|
|
— |
|
| Senior Unsecured Notes due 2023(4) |
|
|
300,000 |
|
|
|
300,000 |
|
| Senior Secured Notes due 2020(4) |
|
|
300,000 |
|
|
|
300,000 |
|
| Capital lease obligations |
|
|
2,115 |
|
|
|
2,115 |
|
|
|
|
|
|
|
|
|
|
| Total long-term debt |
|
|
602,115 |
|
|
|
1,102,115 |
|
4
|
|
|
|
|
|
|
|
|
| Stockholders’ equity: |
|
|
|
|
|
|
|
|
| Preferred stock, $0.001 par value, 5,000 shares authorized; no shares issued and outstanding, actual and as adjusted |
|
$ |
— |
|
|
$ |
— |
|
| Common stock, $0.001 par value, 800,000 shares authorized; 431,470 issued and outstanding, actual and 427,329 issued and outstanding,
as adjusted(5) |
|
|
431 |
|
|
|
427 |
|
| Additional paid-in capital(5)(6) |
|
|
1,774,197 |
|
|
|
1,725,334 |
|
| Accumulated other comprehensive loss |
|
|
(18,814 |
) |
|
|
(18,814 |
) |
| Retained earnings |
|
|
652,247 |
|
|
|
652,247 |
|
|
|
|
|
|
|
|
|
|
| Total stockholders’ equity(5)(6) |
|
|
2,408,061 |
|
|
|
2,359,194 |
|
|
|
|
|
|
|
|
|
|
| Total capitalization(5)(6) |
|
$ |
3,010,176 |
|
|
$ |
3,461,309 |
|
|
|
|
|
|
|
|
|
|
| (1) |
The amounts shown above do not reflect the redemption of the 2020 notes. A redemption of all of the outstanding 2020 notes as of January 15, 2015, would require a payment of $320.6 million, reflecting a redemption
price of 103.438%, plus accrued and unpaid interest through January 15, 2015. |
| (2) |
In accordance with ASC 470-20, convertible debt instruments that may be settled entirely or partially in cash upon conversion (including the Notes) are required to be separated into a liability and an equity component,
such that interest expense reflects the issuer’s non-convertible debt interest rate. Upon issuance, a debt discount will be recognized as a decrease in debt and an increase in equity, specifically to additional paid-in capital. The debt
component will accrete up to the principal amount over the expected term of the debt. Such accounting guidance does not affect the actual amount that the Issuer is required to repay. The amount shown in the table above for the Notes is the aggregate
principal amount of the Notes, without reflecting the debt discount or fees and expenses that the Issuer is required to recognize or the increase in additional paid-in capital on the Issuer’s consolidated balance sheet. |
| (3) |
The Issuer will terminate the commitments under its senior secured revolving credit facility concurrently with the closing of the Notes offering. |
| (4) |
The amounts shown do not take into account unamortized original issue discounts, or OID, of $3.2 million on the 2023 notes and $1.6 million on the 2020 notes. |
| (5) |
Assumes that the Issuer uses approximately $48.9 million of the net proceeds from the Notes offering to repurchase shares of its common stock concurrently with the pricing of the Notes offering in privately negotiated
transactions effected through Wells Fargo Securities, LLC or one of its affiliates as the Issuer’s agent. The Issuer purchased approximately 4.1 million shares of its common stock from purchasers of the Notes at a purchase price per share
equal to the NASDAQ Last Reported Sale Price on January 8, 2015, which was $11.80 per share. |
| (6) |
Issuance of the Notes (giving effect to the application of ASC 470-20 as described in note (2) above) will result in a net increase in additional paid-in capital and, therefore, will result in a net increase in
total stockholders’ equity and total capitalization. Amounts shown in the table above do not reflect the application of ASC 470-20. |
This communication is intended
for the sole use of the person to whom it is provided by the sender. This information does not purport to be a complete description of the Notes or the offering.
This communication shall not constitute an offer to sell or the solicitation of an offer to buy the Notes, or any shares of the Issuer’s common stock
underlying the Notes, nor shall there be any sale of the Notes, or any shares of the Issuer’s common stock underlying the Notes, in any state in which such solicitation or sale would be unlawful prior to registration or qualification of the
Notes or such common stock under the laws of any such state.
5
Neither the Notes nor the shares of common stock issuable upon conversion of the Notes, if any, have been
registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and neither may 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 or any other applicable securities laws. Accordingly, the Notes are being offered and sold only to “qualified institutional
buyers” (as defined in Rule 144A under the Securities Act). The Notes are not transferable except in accordance with the restrictions described under “Transfer Restrictions” in the Preliminary Offering Memorandum.
ANY DISCLAIMER OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES
WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
6
SCHEDULE C
Issuer Written Information
1.
Pricing Term Sheet dated January 8, 2015.
ANNEX A
Significant Subsidiaries
|
|
|
| Name |
|
Jurisdiction of Incorporation/Formation |
| Foundry Networks, LLC |
|
United States |
|
|
| Brocade Communications Luxembourg Holdings SarL |
|
Luxembourg |
|
|
| Brocade Communications Luxembourg Holdings II SCS |
|
Luxembourg |
|
|
| Brocade Communications Luxembourg SarL |
|
Luxembourg |
|
|
| Brocade Switzerland Holdings GmbH |
|
Switzerland |
|
|
| Brocade Communications Switzerland SarL |
|
Switzerland |
|
|
| Brocade Technology GmbH |
|
Switzerland |
|
|
| Brocade Global Holdings GmbH |
|
Switzerland |
|
|
| Foundry Networks Holdings LLC |
|
United States |
|
|
| Foundry Networks International LLC |
|
United States |
|
|
| Foundry Networks International Holdings C.V. |
|
Netherlands |
EXHIBIT A
[Form of Lock-Up Agreement]
, 2014
Wells Fargo Securities, LLC
Merrill Lynch, Pierce,
Fenner & Smith
Incorporated
As Representatives of the several Initial Purchasers
c/o
Wells Fargo Securities, LLC
375 Park Avenue
New York, NY 10152
c/o
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
One Bryant Park
New York, NY 10036
Re: Brocade Communications Systems, Inc. (the “Company”)
Ladies and Gentlemen:
The undersigned is, or may
during the Lock-Up Period (as defined below) become, an owner of record or beneficially of certain shares of Common Stock of the Company (“Common Stock”) or securities convertible into or exchangeable or exercisable for Common
Stock. The Company proposes to offer its Convertible Senior Notes due 2020 (the “Offering”) for which you will act as the representatives of the initial purchasers. The undersigned recognizes that the Offering will be of benefit to
the undersigned and will benefit the Company. The undersigned acknowledges that you and the other initial purchasers are relying on the representations and agreements of the undersigned contained in this letter in carrying out the Offering and in
entering into arrangements with the Company with respect to the Offering.
A-1
In consideration of the foregoing, and except as provided in the following paragraph, the
undersigned hereby agrees that the undersigned will not (and will use reasonable efforts to cause any spouse or immediate family member of the spouse or the undersigned living in the undersigned’s household not to), without the prior written
consent of Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated (collectively, the “Representatives”) (which consent may be withheld in the sole discretion of the
Representatives), directly or indirectly, sell, offer, contract or grant any option to sell (including without limitation any short sale), pledge, transfer, establish an open “put equivalent position” or liquidate or decrease a “call
equivalent position” within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), enter into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap or transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise, or otherwise dispose of
or transfer (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition of), including the participation in the filing of a registration statement with the Securities and Exchange Commission in
respect of, any shares of Common Stock, options or warrants to acquire shares of Common Stock, or securities exchangeable or exercisable for or convertible into shares of Common Stock currently or hereafter owned either of record or beneficially (as
defined in Rule 13d-3 under the Exchange Act) by the undersigned (or such spouse or family member), or publicly announce an intention to do any of the foregoing, for a period commencing on the date hereof and continuing through the close of trading
on the date 60 days after the date of the Final Offering Memorandum (the “Lock-Up Period”). In addition, the undersigned agrees that, without the prior written consent of the Representatives, it will not, during the
Lock-Up Period, make any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock.
Notwithstanding the immediately preceding paragraph, the foregoing restrictions shall not apply to (i) transfers of shares of Common
Stock pursuant to a plan under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, as in effect on the date hereof, (ii) transfers of shares of Common Stock or options to purchase shares of Common Stock made as a bona fide gift
or gifts, provided that the donee or donees thereof agree to be bound by the restrictions set forth herein, (iii) transfers of shares of Common Stock or options to purchase shares of Common Stock made to any trust for the direct or indirect
benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for
value, (iv) transfers by will or intestate succession; (v) the transfer of shares of Common Stock to the Company by the undersigned (either through the delivery of currently owned shares of Common Stock or the withholding of shares of
Common Stock by the Company) in satisfaction of any tax withholding obligation of the undersigned or in payment of the exercise price for any stock option exercised by the undersigned; or (vi) a transfer of shares pursuant to a bona fide
third-party tender offer for all outstanding shares of the Company, merger, consolidation or other similar transaction approved by the Company’s board of directors and made to all holders of the Company’s securities involving a Change of
Control (as defined below) of the Company (including, without limitation, the entering into any lock-up, voting or similar agreement pursuant to which the undersigned may agree to transfer, sell, tender or otherwise dispose of Common Stock or other
such securities in connection with such transaction,
A-2
or vote any Common Stock or other such securities in favor of any such transaction), provided that in the event that such tender offer, merger, consolidation or other such transaction is not
completed, such securities held by the undersigned shall remain subject to the provisions of this agreement; provided, that in the case of a transfer pursuant to clause (ii), (iii) or (iv) above, each transferee shall sign and
deliver to the Representatives a lock-up agreement substantially in the form of this agreement and no filing by any party under the Exchange Act or other public announcement shall be required or voluntarily made in connection with such transfer.
Further, nothing contained herein shall prevent the undersigned from establishing or entering into a new contract, instruction or plan described in Rule 10b5-1(c)(1)(i)(A) promulgated under the Securities Exchange Act of 1934, as amended, provided
that (x) no sale of the undersigned’s shares of Common Stock shall occur pursuant to such contract, instruction or plan until after the date 60 days after the date of the Final Offering Memorandum and (y) no filing by any party under
Section 16(a) of the Securities Exchange Act of 1934, as amended, shall be required or shall be made voluntarily in connection with the establishment or entry into such contract, instruction or plan and no public announcement shall be made by
any person regarding such contract, instruction or plan until after the date 60 days after the date of the Final Offering Memorandum. For the purposes of this agreement, Change of Control shall mean (x) an amalgamation, merger, reorganization
or consolidation in which the outstanding shares of the Company are converted into or exchanged for cash or securities of the successor or continuing entity and the holders of the Company’s issued and outstanding voting power immediately prior
to such transaction own less than 50% of the issued and outstanding voting shares of the successor or continuing entity immediately upon completion of such transaction; or (y) any transaction or series of related transactions in which 100% of
the Company’s voting power is transferred, other than the sale by the Company of stock in transactions the primary purpose of which is to raise capital for the Company’s operations and activities.
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 shares of Common Stock or securities convertible into or exchangeable or exercisable for Common Stock held by the undersigned except in compliance with the foregoing restrictions.
The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this agreement and that this
agreement has been duly authorized (if applicable), executed and delivered by the undersigned and is a valid and binding agreement of the undersigned. This agreement is irrevocable and will be binding on the undersigned and the respective
successors, heirs, personal representatives, and assigns of the undersigned.
The undersigned acknowledges and agrees that whether or not
the Offering actually occurs depends on a number of factors, including market conditions.
This agreement shall terminate and the
undersigned shall be released from the undersigned’s obligations hereunder if the purchase agreement relating to the Offering has not been executed on or prior to February 5, 2015.
A-3
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
[Signature Page Follows]
A-4
|
|
|
|
|
| IF AN INDIVIDUAL: |
|
|
|
IF AN ENTITY: |
|
|
|
|
By:
(duly authorized signature) |
|
|
|
(please print complete name of entity) |
|
|
|
|
Name:
(please print full name) |
|
|
|
By:
(duly authorized signature) |
|
|
|
|
|
|
|
Name:
(please print full name)
Title:
|
|
|
|
| Address: |
|
|
|
Address: |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
[Signature page to Lock-Up Agreement]
A-5
Exhibit 4.1
EXECUTION VERSION
BROCADE COMMUNICATIONS SYSTEMS, INC.
AND
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
as Trustee
INDENTURE
Dated as of
January 14, 2015
1.375% Convertible Senior Notes due 2020
TABLE OF CONTENTS
|
|
|
|
|
| |
|
PAGE |
|
| ARTICLE 1
DEFINITIONS |
|
|
|
| Section 1.01. Definitions |
|
|
1 |
|
| Section 1.02. References to Interest |
|
|
13 |
|
|
| ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND
EXCHANGE OF NOTES |
|
|
|
| Section 2.01. Designation and Amount |
|
|
13 |
|
| Section 2.02. Form of Notes |
|
|
14 |
|
| Section 2.03. Date and Denomination of Notes; Payments of Interest and Defaulted Amounts |
|
|
15 |
|
| Section 2.04. Execution, Authentication and Delivery of Notes |
|
|
16 |
|
| Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary |
|
|
17 |
|
| Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes |
|
|
23 |
|
| Section 2.07. Temporary Notes |
|
|
24 |
|
| Section 2.08. Cancellation of Notes Paid, Converted, Etc |
|
|
24 |
|
| Section 2.09. CUSIP Numbers |
|
|
25 |
|
| Section 2.10. Additional Notes; Repurchases |
|
|
25 |
|
|
| ARTICLE 3
SATISFACTION AND DISCHARGE |
|
|
|
| Section 3.01. Satisfaction and Discharge |
|
|
25 |
|
|
| ARTICLE 4
PARTICULAR COVENANTS OF THE COMPANY |
|
|
|
| Section 4.01. Payment of Principal and Interest |
|
|
26 |
|
| Section 4.02. Maintenance of Office or Agency |
|
|
26 |
|
| Section 4.03. Appointments to Fill Vacancies in Trustee’s Office |
|
|
26 |
|
| Section 4.04. Provisions as to Paying Agent |
|
|
27 |
|
| Section 4.05. Existence |
|
|
28 |
|
| Section 4.06. Rule 144A Information Requirement and Annual Reports |
|
|
28 |
|
| Section 4.07. Stay, Extension and Usury Laws |
|
|
30 |
|
| Section 4.08. Compliance Certificate; Statements as to Defaults |
|
|
30 |
|
| Section 4.09. Further Instruments and Acts |
|
|
30 |
|
| Section 4.10. [Intentionally Omitted] |
|
|
30 |
|
| Section 4.11. Future Guarantees |
|
|
30 |
|
i
|
|
|
|
|
|
| ARTICLE 5
LISTS OF HOLDERS AND REPORTS BY THE
COMPANY AND THE TRUSTEE |
|
|
|
| Section 5.01. Lists of Holders |
|
|
31 |
|
| Section 5.02. Preservation and Disclosure of Lists |
|
|
31 |
|
|
| ARTICLE 6
DEFAULTS AND REMEDIES |
|
|
|
| Section 6.01. Events of Default |
|
|
32 |
|
| Section 6.02. Acceleration; Rescission and Annulment |
|
|
33 |
|
| 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 |
|
| Section 6.08. Remedies Cumulative and Continuing |
|
|
38 |
|
| Section 6.09. Direction of Proceedings and Waiver of Defaults by Majority of Holders |
|
|
38 |
|
| Section 6.10. Notice of Defaults |
|
|
39 |
|
| Section 6.11. Undertaking to Pay Costs |
|
|
39 |
|
|
| ARTICLE 7
CONCERNING THE TRUSTEE |
|
|
|
| Section 7.01. Duties and Responsibilities of Trustee |
|
|
40 |
|
| Section 7.02. Reliance on Documents, Opinions, Etc |
|
|
42 |
|
| 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 and Shares of Common Stock to Be Held in Trust |
|
|
43 |
|
| Section 7.06. Compensation and Expenses of Trustee |
|
|
43 |
|
| Section 7.07. Officer’s Certificate and Opinion of Counsel 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 |
|
|
|
| Section 8.01. Action by Holders |
|
|
47 |
|
| Section 8.02. Proof of Execution by Holders |
|
|
48 |
|
| Section 8.03. Who Are Deemed Absolute Owners |
|
|
48 |
|
| Section 8.04. Company-Owned Notes Disregarded |
|
|
48 |
|
| Section 8.05. Revocation of Consents; Future Holders Bound |
|
|
49 |
|
ii
|
|
|
|
|
|
| ARTICLE 9
HOLDERS’ MEETINGS |
|
|
|
| Section 9.01. Purpose of Meetings |
|
|
49 |
|
| Section 9.02. Call of Meetings by Trustee |
|
|
50 |
|
| Section 9.03. Call of Meetings by Company or Holders |
|
|
50 |
|
| Section 9.04. Qualifications for Voting |
|
|
50 |
|
| Section 9.05. Regulations |
|
|
50 |
|
| Section 9.06. Voting |
|
|
51 |
|
| Section 9.07. No Delay of Rights by Meeting |
|
|
51 |
|
|
| ARTICLE 10
SUPPLEMENTAL INDENTURES |
|
|
|
| Section 10.01. Supplemental Indentures Without Consent of Holders |
|
|
51 |
|
| Section 10.02. Supplemental Indentures with Consent of Holders |
|
|
52 |
|
| Section 10.03. Effect of Supplemental Indentures |
|
|
54 |
|
| Section 10.04. Notation on Notes |
|
|
54 |
|
| Section 10.05. Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee |
|
|
54 |
|
|
| ARTICLE 11
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND
LEASE |
|
|
|
| Section 11.01. Company May Consolidate, Etc. on Certain Terms |
|
|
54 |
|
| Section 11.02. Successor Corporation to Be Substituted |
|
|
55 |
|
| Section 11.03. Opinion of Counsel to Be Given to Trustee |
|
|
55 |
|
|
| ARTICLE 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
DIRECTORS |
|
|
|
| Section 12.01. Indenture and Notes Solely Corporate Obligations |
|
|
56 |
|
|
| ARTICLE 13
GUARANTEES |
|
|
|
| Section 13.01. Note Guarantee |
|
|
56 |
|
| Section 13.02. Limitation on Guarantor Liability |
|
|
58 |
|
| Section 13.03. Execution and Delivery |
|
|
58 |
|
| Section 13.04. Subrogation |
|
|
58 |
|
| Section 13.05. Benefits Acknowledged |
|
|
58 |
|
| Section 13.06. Release of Note Guarantees |
|
|
59 |
|
| Section 13.07. Amendments |
|
|
59 |
|
iii
|
|
|
|
|
|
| ARTICLE 14
CONVERSION OF NOTES |
|
|
|
| Section 14.01. Conversion Privilege |
|
|
60 |
|
| Section 14.02. Conversion Procedure; Settlement Upon Conversion |
|
|
62 |
|
| Section 14.03. Increased Conversion Rate Applicable to Certain Notes Surrendered in Connection with Make-Whole Fundamental
Changes |
|
|
67 |
|
| Section 14.04. Adjustment of Conversion Rate |
|
|
69 |
|
| Section 14.05. Adjustments of Prices |
|
|
78 |
|
| Section 14.06. Shares to Be Fully Paid |
|
|
79 |
|
| Section 14.07. Effect of Recapitalizations, Reclassifications and Changes of the Common Stock |
|
|
79 |
|
| Section 14.08. Certain Covenants |
|
|
81 |
|
| Section 14.09. Responsibility of Trustee |
|
|
82 |
|
| Section 14.10. Notice to Holders Prior to Certain Actions |
|
|
82 |
|
| Section 14.11. Stockholder Rights Plans |
|
|
83 |
|
| Section 14.12. Limit on Issuance of Shares of Common Stock Upon Conversion |
|
|
83 |
|
| Section 14.13. Exchange in Lieu of Conversion |
|
|
83 |
|
|
| ARTICLE 15
REPURCHASE OF NOTES AT OPTION OF
HOLDERS |
|
|
|
| Section 15.01. [Intentionally Omitted] |
|
|
84 |
|
| Section 15.02. Repurchase at Option of Holders Upon a Fundamental Change |
|
|
84 |
|
| Section 15.03. Withdrawal of Fundamental Change Repurchase Notice |
|
|
87 |
|
| Section 15.04. Deposit of Fundamental Change Repurchase Price |
|
|
87 |
|
| Section 15.05. Covenant to Comply with Applicable Laws Upon Repurchase of Notes |
|
|
88 |
|
|
| ARTICLE 16
NO REDEMPTION |
|
|
|
| Section 16.01. No Redemption |
|
|
88 |
|
|
| ARTICLE 17
MISCELLANEOUS PROVISIONS |
|
|
|
| Section 17.01. Provisions Binding on Company’s Successors |
|
|
88 |
|
| Section 17.02. Official Acts by Successor Corporation |
|
|
89 |
|
| Section 17.03. Addresses for Notices, Etc |
|
|
89 |
|
| Section 17.04. Governing Law; Jurisdiction |
|
|
89 |
|
| Section 17.05. Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee |
|
|
90 |
|
| Section 17.06. Legal Holidays |
|
|
90 |
|
| Section 17.07. No Security Interest Created |
|
|
90 |
|
| Section 17.08. Benefits of Indenture |
|
|
91 |
|
iv
|
|
|
|
|
| Section 17.09. Table of Contents, Headings, Etc |
|
|
91 |
|
| Section 17.10. Authenticating Agent |
|
|
91 |
|
| Section 17.11. Execution in Counterparts |
|
|
92 |
|
| Section 17.12. Severability |
|
|
92 |
|
| Section 17.13. Waiver of Jury Trial |
|
|
92 |
|
| Section 17.14. Force Majeure |
|
|
92 |
|
| Section 17.15. Calculations |
|
|
93 |
|
| Section 17.16. USA PATRIOT Act |
|
|
93 |
|
EXHIBITS
|
|
|
|
|
|
|
| Exhibit A |
|
Form of Note |
|
|
A-1 |
|
| Exhibit B |
|
Form of Supplemental Indenture to be Delivered by Guarantors |
|
|
B-1 |
|
v
INDENTURE dated as of January 14, 2015 between Brocade Communications Systems, Inc.,
a Delaware corporation, as issuer (the “Company,” as more fully set forth in Section 1.01) and Wells Fargo Bank, National Association, a national banking association organized under the laws of the United States of America, 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 1.375% Convertible Senior Notes due
2020 (the “Notes”), initially in an aggregate principal amount not to exceed $575,000,000, and in order to provide the terms and conditions upon which the Notes are to be authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture; 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.
“2023 Notes” means the Company’s 4.625% Senior Notes due 2023.
“2023 Notes Indenture” means the indenture governing the 2023 Notes,
dated as of January 22, 2013, by and among the Company, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee.
“Additional Interest” means all amounts, if any, payable pursuant to Section 4.06(d), Section 4.06(e) and
Section 6.03, as applicable.
“Additional Shares” shall have the meaning specified in Section
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.
“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
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, but shall not include any debt
securities convertible into or exchangeable for any securities otherwise constituting Capital Stock pursuant to this definition.
“Cash Settlement” shall have the meaning specified in Section 14.02(a).
“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).
2
“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 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 one of its Officers and delivered to the Trustee.
“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 Trust Office” means the principal office of the Trustee at which at any time its corporate trust business
shall be administered, which office at the date hereof is located at (i) 333 S. Grand Avenue, 5th Floor, Suite 5A, MAC: E2064-05A, Los Angeles, CA 90071, Attention: Corporate, Municipal & Escrow Services, (ii) with respect to
presentation of Notes for payment, registration or transfer or exchange, repurchase or conversion, 608 2nd Avenue South, 12th Floor, Minneapolis, MN 55402, or (iii) such other address as the Trustee may designate from time to time by notice to
the Holders and the Company, or the principal corporate trust office of any successor trustee (or such other address as such successor trustee may designate from time to time by notice to the Holders and the Company).
“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 30 consecutive Trading Days
during the Observation Period, one-thirtieth (1/30th) of the product of (a) the Conversion Rate on such Trading Day and (b) the Daily VWAP for such Trading Day.
3
“Daily Measurement Value” means the Specified Dollar Amount (if any),
divided by 30.
“Daily Settlement Amount,” for each of the 30 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, for each of the 30 consecutive Trading Days during the relevant Observation
Period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “BRCD <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.
“Debtor Relief Law’
means Title 11 of the United States Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the
United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“Default” means any event that is, or after notice or passage of time, or both, would be, an Event of Default.
“Defaulted Amounts” means any amounts on any Note (including, without limitation, the Fundamental Change
Repurchase Price, principal and interest) that are payable but are not punctually paid or duly provided for.
“Depositary” means, with respect to each Global Note, the Person specified in Section 2.05(c) as the Depositary
with respect to such Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter, “Depositary” shall mean or include such successor.
“Distributed Property” shall have the meaning specified in Section 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.
4
“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.
“Exchange Election” shall have the
meaning specified in Section 14.13.
“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.
“Freely Tradable” means that the Notes are eligible for sale and
transfer without registration under the Securities Act pursuant to Rule 144 (without being subject to limitations on volume or manner of sale pursuant to Rule 144).
“Fundamental Change” shall be deemed to have occurred at the time after the Notes are originally issued if any of the
following occurs:
(a) a “person” or “group” within the meaning of Section 13(d) of the
Exchange Act, other than the Company, its direct or indirect Wholly Owned Subsidiaries and the employee benefit plans of the Company and its direct or indirect Wholly Owned Subsidiaries, files a Schedule TO or any schedule, form or report under the
Exchange Act disclosing that such person or group has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s Common Equity representing more than 50% of the voting power of
the Company’s Common Equity;
5
(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 (relative to each other) as such ownership immediately prior to such transaction shall not be a Fundamental Change pursuant to
this clause (b);
(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 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 holders of the Common Stock,
excluding cash payments for fractional shares and cash payments made in respect of dissenters’ rights, in connection with such transaction or transactions consists of shares of common stock that are listed or quoted on any of The New York Stock
Exchange, The NASDAQ Global 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 and cash payments made in respect of dissenters’ rights (subject to the provisions of Section 14.02(a)). For
purposes of the definition of “Fundamental Change,” any transaction that constitutes a Fundamental Change pursuant to both clause (a) and clause (b) of the definition thereof shall be deemed a Fundamental Change solely under
clause (b) of the definition thereof. If any transaction occurs in which the Common Stock is converted into, or exchanged for, Reference Property consisting of common equity of another entity, following completion of any related Make-Whole
Fundamental Change Period (or, in the case of a transaction that would have been a Fundamental Change or a Make-Whole Fundamental Change but for the 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.
“Fundamental Change Company Notice” shall have the meaning specified in Section 15.02(c).
6
“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).
“GAAP” means generally accepted accounting principles in the United States, consistently
applied, set forth in the statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession of the United States,
which are in effect as of the date of determination.
“Global Note” shall have the meaning specified in
Section 2.05(b).
“Guarantor” means any Subsidiary of the Company that is required to guarantee the Notes
pursuant to Section 4.11.
“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.
“Indenture” means this instrument as originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.
“Initial Dividend Threshold” shall have the meaning specified in Section
14.04(d).
“Interest Payment Date” means each January 1 and July 1 of each year, beginning on
July 1, 2015.
“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.
7
“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).
“Market Disruption Event” means, for the purposes of determining amounts due upon conversion (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, 2020.
“Measurement Period” shall have the meaning specified in Section 14.01(b)(i).
“Merger Common Stock” shall have the meaning specified in Section 14.07(e)(i).
“Merger Event” shall have the meaning specified in Section 14.07(a).
“Merger Valuation Percentage” for any Merger Event shall be equal to (x) the arithmetic average of the Last
Reported Sale Prices of one share of such Merger Common Stock over the relevant Merger Valuation Period (determined as if references to “Common Stock” in the definition of “Last Reported Sale Price” were references to the
“Merger Common Stock” for such Merger Event), divided by (y) the arithmetic average of the Last Reported Sale Prices of one share of Common Stock over the relevant Merger Valuation Period.
“Merger Valuation Period” for any Merger Event means the five consecutive Trading Day period immediately preceding,
but excluding, the effective date for such Merger Event.
“Note” or “Notes” shall have the
meaning specified in the first paragraph of the recitals of this Indenture.
“Note Guarantee” means any guarantee
that may from time to time be entered into by a Subsidiary of the Company on or after the first date of original issuance of the Notes pursuant to Section 4.11.
“Note Register” shall have the meaning specified in Section 2.05(a).
“Note Registrar” shall have the meaning specified in Section 2.05(a).
8
“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) if the
relevant Conversion Date occurs prior to September 1, 2019, the 30 consecutive Trading Day period beginning on, and including, the third Trading Day immediately succeeding such Conversion Date; and (ii) if the relevant Conversion Date
occurs on or after September 1, 2019, the 30 consecutive Trading Days beginning on, and including, the 32nd Scheduled Trading Day immediately preceding the Maturity Date.
“Offering Memorandum” means the preliminary offering memorandum dated January 7, 2015, as supplemented by the
related pricing term sheet dated January 8, 2015, relating to the offering and sale of the Notes.
“Officer” means, with respect to the Company or any Guarantor, the President, the Chief Executive Officer, the Chief
Financial Officer, the Chief Accounting Officer, the Treasurer, the Assistant 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”).
“Officer’s Certificate,” when used with respect to the
Company or any Guarantor, means a certificate that is delivered to the Trustee and that is signed by any Officer of the Company or such Guarantor, as the case may be. 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. The Officer giving an Officer’s Certificate pursuant to Section 4.08 shall be the principal executive, financial or accounting officer of the Company.
“open of business” means 9:00 a.m. (New York City time).
“Opinion of Counsel” means, with respect to the Company or any Guarantor, an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or such Guarantor, as the case may be, that is delivered and acceptable to the Trustee, which opinion may contain customary exceptions and qualifications as to the matters set forth
therein. Each such opinion shall include the statements provided for in Section 17.05 if and to the extent required by the provisions of such Section 17.05.
“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);
9
(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; and
(e) Notes repurchased by the Company pursuant to the penultimate sentence of Section 2.10.
“Paying Agent” shall have the meaning specified in Section 4.02.
“Person” means an individual, a corporation, a limited liability company, an association, a partnership, a joint
venture, a joint stock company, a trust, an unincorporated organization or a government or an agency or a political subdivision thereof.
“Physical Notes” means permanent certificated Notes in registered form issued in denominations of $1,000 principal
amount and integral multiples 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.
“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).
“Reference Property” shall have the meaning specified in Section 14.07(a).
“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.
10
“Resale Restriction Termination Date” shall have the meaning specified in
Section 2.05(c).
“Responsible Officer” means, when used with respect to the Trustee, any officer within
the corporate trust department 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 is referred because of such person’s knowledge of and familiarity with the particular subject and 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.
“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).
“Significant Subsidiary” means a Subsidiary of the
Company that meets the definition of “significant subsidiary” in Rule 1-02(w) of Regulation S-X under the Exchange Act. Notwithstanding the foregoing, solely for purposes of Section 6.01(h) and Section 6.01(i),
“Significant Subsidiary” means a Subsidiary of the Company that meets the definition of “significant subsidiary” in Rule 1-02(w) of Regulation S-X under the Exchange Act; provided that, in the case of
a Subsidiary of the Company that meets the criteria of clause (3) of the definition thereof but not clause (1) or clause (2) of the definition thereof, such Subsidiary shall be deemed not to be a Significant Subsidiary unless such
Subsidiary’s income from continuing operations before income taxes, extraordinary items and cumulative effect of a change in accounting principles exclusive of amounts attributable to any non-controlling interests for the last completed fiscal
year prior to the date of such determination exceeds $25,000,000.
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“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 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” means a day on which (i) trading in the Common Stock (or other security for which a closing sale
price must be determined) generally occurs on The NASDAQ Global Select Market or, if the Common Stock (or such other security) is not then listed on The NASDAQ Global Select Market, on the principal other U.S. national or regional securities
exchange on which the Common Stock (or such other security) is then listed or, if the Common Stock (or such other security) is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common
Stock (or such other security) is then traded 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 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 Global Select Market or, if the Common Stock is not then listed on The NASDAQ Global Select
Market, on the principal other U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on
which the Common Stock is then listed or admitted for trading, except that if the Common Stock is not so listed or admitted for trading, “Trading Day” means a Business Day.
“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
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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.
“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 “50%” in the definition of “Subsidiary” shall be deemed replaced by a reference to “100%”, the calculation of which shall exclude nominal amounts of the voting power of
shares of Capital Stock or other interests in the relevant Subsidiary as may be required to satisfy local minority interest requirements outside of the United States.
Section 1.02. References to Interest. Unless the context otherwise requires, any reference to interest on, or in respect
of, any Note in this Indenture shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of Section 4.06(d), Section 4.06(e) and Section 6.03. Unless the
context otherwise requires, any express mention of Additional Interest in any provision hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made.
ARTICLE 2
ISSUE,
DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
Section 2.01. Designation and Amount. The Notes shall be designated as the “1.375% Convertible Senior Notes due
2020.” The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is initially limited to $575,000,000, subject to Section 2.10 and except for Notes authenticated and delivered upon registration or
transfer of, or in exchange for, or in lieu of other Notes to the extent expressly permitted hereunder.
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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 Officers
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 repurchases, cancellations, conversions, transfers, exchanges or issuances of additional Notes (to the extent such issuances are fungible with the Notes represented by such Global Note for U.S. federal income tax
and securities law purposes) permitted hereby. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction
of the Trustee, in such manner and upon instructions given by the Holder of such Notes in accordance with this Indenture. Payment of principal (including the Fundamental Change Repurchase Price, 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.
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Section 2.03. Date and Denomination of Notes; Payments of Interest and Defaulted
Amounts. (a) The Notes shall be issuable in registered form without coupons in denominations of $1,000 principal amount and integral multiples thereof. Each Note shall be dated the date of its authentication and shall bear interest from the
date specified on the face of 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 continental United States of America, 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, interest (i) on any Physical Notes (A) to Holders holding Physical Notes having an aggregate principal
amount of $5,000,000 or less, by check mailed to the Holders of these Notes at their address as it appears in the Note Register and (B) to Holders holding Physical Notes having an aggregate principal amount of more than $5,000,000, either by
check mailed to each Holder or, upon application by such a Holder to the Note Registrar not later than the relevant Regular Record Date, by wire transfer in immediately available funds to that Holder’s account within the United States, which
application shall remain in effect until the Holder notifies, in writing, the Note Registrar to the contrary or (ii) on any Global Note by wire transfer of immediately available funds to the account of the Depositary or its nominee.
(c) Any Defaulted Amounts shall forthwith cease to be payable to the Holder on the relevant payment date but shall accrue interest per annum at
the rate borne by the Notes, subject to the enforceability thereof under applicable law, from, and including, such relevant payment date, and such Defaulted Amounts together with such interest thereon shall be paid by the Company, at its election in
each case, as provided in clause (i) or (ii) below:
(i) The Company may elect to make payment of any Defaulted
Amounts to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on a special record date for the payment of such 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, unless
the Trustee shall consent to an earlier date), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Amounts or shall make arrangements 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 (unless the Trustee shall consent to an earlier date). The
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Company shall promptly notify the Trustee of such special record date 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 mailed, first-class postage prepaid, to each Holder at its address as it appears in the Note Register, 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 mailed, 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 whatsoever for the calculation of any 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 notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
Section 2.04. Execution, Authentication and Delivery of Notes. The Notes shall be signed in the name and on behalf of the
Company by the manual or facsimile signature of its Chief Executive Officer, President, Chief Financial Officer, Treasurer, Secretary or any of its Executive or Senior Vice Presidents.
At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes executed by the Company to
the Trustee for authentication, together with a Company Order for the authentication and delivery of such Notes, and the Trustee in accordance with such Company Order shall authenticate and deliver such Notes, without any further action by the
Company hereunder.
Only such Notes as shall bear thereon a certificate of authentication substantially in the form set forth on the Form
of Note attached as Exhibit A hereto, executed manually by an authorized officer of the Trustee (or an authenticating agent appointed by the Trustee as provided by Section 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.
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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 be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and duly executed, by the Holder
thereof or its attorney-in-fact duly authorized in writing.
No service charge shall be imposed by the Company, the Trustee, the Note
Registrar, any co-Note Registrar or 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 or (ii) any Notes, or a portion of any Note, surrendered for repurchase (and not
withdrawn) in accordance with Article 15.
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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. Each Global
Note shall bear the legend required on a Global Note set forth in Exhibit A hereto. The transfer and exchange of beneficial interests in a Global Note that does not involve the issuance of a Physical Note shall be effected through the Depositary
(but not the Trustee or the Custodian) in accordance with this Indenture (including the restrictions on transfer set forth herein) and the procedures of the Depositary therefor.
(c) Every Note that bears or is required under this Section 2.05(c) to bear the legend set forth in this Section 2.05(c)
(together with any Common Stock issued upon conversion of the Notes 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.
Until the date (the “Resale Restriction Termination
Date”) that is the later of (1) the date that is one year after the last date of original issuance of the Notes, or such shorter period of time as permitted by Rule 144 or any successor provision thereto, and (2) such later date,
if any, as may be required by applicable law, any certificate evidencing such Note (and all securities issued in exchange therefor or substitution thereof, other than Common Stock, if any, issued upon conversion thereof, which shall bear the legend
set forth in Section 2.05(d), if applicable) shall bear a legend in substantially the following form (unless such Notes have been transferred pursuant to a registration statement that has become or been declared effective under the Securities
Act and that continues to be effective at the time of such transfer, or sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company
in writing, with notice thereof to the Trustee):
THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF
THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND 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:
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(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 BROCADE COMMUNICATIONS SYSTEMS, INC. (THE “COMPANY”) THAT IT WILL NOT OFFER,
SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, 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 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 prior to the Resale Restriction Termination Date will be registered by the Note Registrar unless the applicable box on
the Form of Assignment and Transfer has been checked.
Any Note (or security issued in exchange or substitution therefor) (i) as to
which such restrictions on transfer shall have expired in accordance with their terms, (ii) that has been transferred pursuant to a registration statement that has become effective or been declared effective under the Securities Act and that
continues to be effective at the time of such transfer or (iii) that has been sold pursuant to the exemption from registration provided by Rule 144 or any
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similar provision then in force under the Securities Act, may, upon surrender of such Note for exchange to the Note Registrar in accordance with the provisions of this Section 2.05, be
exchanged for a new Note or Notes, of like tenor and aggregate principal amount, which shall not bear the restrictive legend required by this Section 2.05(c) and shall not be assigned a restricted CUSIP number. 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; 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 upon the occurrence of the Resale Restriction Termination Date and promptly after a registration statement, if any, with respect to the Notes or any Common Stock issued upon conversion of the Notes has been declared
effective under the Securities Act.
Notwithstanding any other provisions of this Indenture (other than the provisions set forth in this
Section 2.05(c)), a Global Note may not be transferred as a whole or in part except (i) by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary and (ii) for 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 and a beneficial owner of any Note requests that its beneficial interest therein be issued as a Physical Note, the Company shall execute, and
the Trustee, upon receipt of an Officer’s Certificate and a Company Order for the authentication and delivery of Notes, shall authenticate and deliver (x) in the case of clause (iii), a Physical Note to such beneficial owner in a principal
amount equal to the principal amount of such Note corresponding to such beneficial owner’s beneficial interest and (y) in the case of clause (i) or (ii), Physical Notes to each beneficial owner of the related Global Notes (or a
portion thereof) in an aggregate principal amount equal to the aggregate principal amount of such Global Notes in exchange for such Global Notes, and upon delivery of the Global Notes to the Trustee such Global Notes shall be canceled.
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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 or transferred, such Global Note shall be, upon
receipt thereof, canceled by the Trustee in accordance with standing procedures and existing instructions between the Depositary and the Custodian. At any time prior to such cancellation, if any interest in a Global Note is exchanged for Physical
Notes, converted, canceled, repurchased or transferred to a transferee who receives Physical Notes therefor or any Physical Note is exchanged or transferred for part of such Global Note, the principal amount of such Global Note shall, in accordance
with 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.
None of the Company, the Trustee or any agent of the Company or the
Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Note or maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
(d) Until the Resale Restriction Termination Date, any stock certificate representing Common Stock issued
upon conversion of a Note shall bear a legend in substantially the following form (unless such Common Stock has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that
continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or such Common Stock has been issued upon conversion of a
Note 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 pursuant to the exemption from registration
provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company with written notice thereof to the Trustee and any transfer agent for the Common Stock):
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
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(2) AGREES FOR THE BENEFIT OF BROCADE COMMUNICATIONS SYSTEMS, INC. (THE
“COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE OF THE SERIES OF NOTES
UPON THE CONVERSION OF WHICH THIS SECURITY WAS ISSUED OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW,
EXCEPT:
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, 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 TRANSFER AGENT FOR THE COMPANY’S COMMON STOCK RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER 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, 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).
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(e) Any Note or Common Stock issued upon the conversion or exchange of a Note that is purchased
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 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 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.
Neither the Trustee nor any agent of the Trustee shall have any responsibility or liability for any
actions taken or not taken by the Depositary.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes. In case any
Note shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon its written request 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 each of 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 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
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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 each of 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 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, 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, conversion or repurchase of negotiable instruments or other securities without their surrender.
Section 2.07. Temporary Notes. Pending the preparation of Physical Notes, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon written request of the Company, 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 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, 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 as expressly permitted by the provisions of this Indenture in the case of Notes surrendered for registration of transfer or exchange, no Notes shall be
authenticated in exchange thereof. The Trustee shall dispose of canceled Notes in accordance with its customary procedures.
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Section 2.09. CUSIP Numbers. The Company in issuing the Notes may use
“CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in all notices issued to Holders as a convenience to such Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed on the Notes or on such notice and that reliance may be placed only on the other identification numbers printed on the Notes. The Company shall promptly notify the
Trustee in writing of any change in the “CUSIP” numbers.
Section 2.10. Additional Notes; Repurchases. The
Company may, without the consent of the Holders and notwithstanding Section 2.01, reopen this Indenture and issue additional Notes hereunder with the same terms as the Notes initially issued hereunder (other than differences in the issue price
and interest accrued prior to the issue date of such additional Notes) in an unlimited aggregate principal amount; provided that if any such additional Notes are not fungible with the Notes initially issued hereunder for U.S. federal income
tax purposes or securities law purposes, such additional Notes shall have one or more separate CUSIP numbers. Prior to the issuance of any such additional Notes, the Company shall deliver to the Trustee a Company Order, an Officer’s Certificate
and an Opinion of Counsel, such Officer’s Certificate and Opinion of Counsel to cover such matters, in addition to those required by Section 17.05, as the Trustee shall reasonably request. In addition, 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 such Notes shall no longer be considered outstanding under this Indenture upon their repurchase.
ARTICLE 3
SATISFACTION AND DISCHARGE
Section 3.01. Satisfaction and Discharge. This Indenture and the Notes shall upon request of the Company contained in an
Officer’s Certificate cease to be of further effect, and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture and the Notes, when (a) (i) all Notes
theretofore authenticated and delivered (other than 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 Fundamental Change Repurchase Date, upon conversion or otherwise, cash or
cash, shares of Common Stock or a combination thereof, as applicable, solely to satisfy the Company’s
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Conversion Obligation, sufficient to pay all of the outstanding Notes and all other sums due and payable under this Indenture by the Company; and (b) the Company has delivered to the Trustee
an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture and the Notes 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 pay or cause to be paid the
principal (including 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.
Section 4.02. Maintenance of Office or Agency. The Company will maintain in the continental United States of America an
office or agency where the Notes may be surrendered for registration of transfer or exchange or for presentation for payment or repurchase (“Paying Agent”) or for conversion (“Conversion
Agent”) and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of
such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office or the office or agency of the Trustee in the continental United States of America.
The Company
may also from time to time designate as co-Note Registrars one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations;
provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the continental United States of America for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The terms “Paying Agent” and “Conversion Agent” include any such
additional or other offices or agencies, as applicable.
The Company hereby initially designates the Trustee as the Paying Agent,
Note Registrar, Custodian and Conversion Agent and the Corporate Trust Office as the office or agency in the continental United States of America where Notes may be surrendered for registration of transfer or exchange or for presentation for payment
or repurchase or for conversion. Notices and demands to or upon the Company in respect of the Notes and this Indenture may be served on the Company as provided in Section 17.03.
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.
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Section 4.04. Provisions as to Paying Agent. (a) If the Company shall
appoint a Paying Agent other than the Trustee, the Company will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 4.04:
(i) that it will hold all sums held by it as such agent for the payment of the principal (including the Fundamental Change
Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes in trust for the benefit of the Holders of the Notes;
(ii) that it will give the Trustee prompt written notice of any failure by the Company to make any payment of the principal
(including the Fundamental Change Repurchase Price, 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 Fundamental Change
Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes, deposit with the Paying Agent a sum sufficient to pay such principal (including the Fundamental Change Repurchase Price, 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 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 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 Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes when the same shall become due and payable.
(c) Anything in this Section 4.04 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge of this Indenture, or for any other reason, pay, cause to be paid or deliver to the Trustee all sums or amounts held in trust by the Company or any Paying Agent hereunder as required by this Section 4.04, such sums or
amounts to be held by the Trustee upon the trusts herein contained and upon such payment or delivery by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from all further liability but only with
respect to such sums or amounts.
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(d) Any money and shares of Common Stock deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, accrued and unpaid interest on and the consideration due upon conversion of any Note and remaining unclaimed for
two years (or as of any common law escheatment date) after such principal (including the Fundamental Change Repurchase Price, if applicable), interest or consideration due upon conversion has become due and payable shall be paid to the Company on
request of the Company contained in an Officer’s Certificate, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money and shares of Common Stock, and all liability of the Company as trustee thereof, shall thereupon cease.
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 provide 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.
(b) The Company shall file with the Trustee, within 15 days after the same are required to be filed with the Commission (giving effect
to any grace period provided by Rule 12b-25 or any successor rule under the Exchange Act), copies of any annual or quarterly reports (on Form 10-K or 10-Q or any respective successor form) that the Company is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act (excluding any information, documents or reports, or portions thereof, subject to confidential treatment and any correspondence with the Commission). Any such document or report that the
Company files with the Commission via the Commission’s EDGAR system (or any successor thereto) shall be deemed to be filed with the Trustee for purposes of this Section 4.06(b) at the time such documents are filed via the EDGAR system (or
any successor thereto), it being understood that the Trustee shall not be responsible for determining whether such filings have been made.
(c) Delivery of the reports, information and documents described in subsection (b) above to the Trustee is for informational purposes
only, and the information and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein, or determinable from information contained therein, including the Company’s compliance with any of
its covenants hereunder (as to which the Trustee is entitled to conclusively rely on an Officer’s Certificate).
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(d) If, at any time during the six-month period beginning on, and including, the date that is six
months after the last date of original issuance of the Notes, the Company fails to timely file any document or report that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after
giving effect to all applicable grace periods thereunder and other than reports on Form 8-K), or the Notes are not otherwise Freely Tradable by Holders other than the Company’s Affiliates or Holders that were the Company’s Affiliates at
any time during the three months preceding (as a result of restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes), the Company shall pay Additional Interest on the Notes. Such Additional Interest shall accrue on
the Notes at the rate of 0.50% per annum of the principal amount of the Notes outstanding for each day during such period for which the Company’s failure to file has occurred and is continuing or the Notes are not otherwise Freely Tradable
by Holders other than the Company’s Affiliates (or Holders that have been the Company’s Affiliates at any time during the three months preceding) without restrictions pursuant to U.S. securities laws or the terms of this Indenture or the
Notes. As used in this Section 4.06(d), documents or reports that the Company is required to “file” with the Commission pursuant to Section 13 or 15(d) of the Exchange Act does not include documents or reports that the Company
furnishes to the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
(e) If, and for so long as, the restrictive legend
on the Notes specified in Section 2.05(c) has not been removed, the Notes are assigned a restricted CUSIP or the Notes are not otherwise Freely Tradable by Holders other than the Company’s Affiliates or Holders that were the Company’s
Affiliates at any time during the three months preceding (without restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes) as of the 380th day after the last date of original issuance of the Notes, the Company shall
pay Additional Interest on the Notes at a rate equal to 0.50% per annum of the principal amount of Notes outstanding until the restrictive legend on the Notes has been removed in accordance with Section 2.05(c), the Notes are assigned an
unrestricted CUSIP and the Notes are Freely Tradable by Holders other than the Company’s Affiliates (or Holders that were the Company’s Affiliates at any time during the three months preceding) without restrictions pursuant to U.S.
securities laws or the terms of this Indenture or the Notes.
(f) Additional Interest will be payable in arrears on each Interest Payment
Date following accrual in the same manner as regular interest on the Notes.
(g) Subject to the immediately succeeding sentence, the
Additional Interest that is payable in accordance with Section 4.06(d) or Section 4.06(e) shall be in addition to, and not in lieu of, any Additional Interest that may be payable as a result of the Company’s election pursuant to
Section 6.03. However, in no event shall any Additional Interest that may accrue as a result of the Company’s failure to comply with its obligations pursuant to Section 4.06(d) and Section 4.06(e), together with any Additional
Interest payable at the Company’s election pursuant to Section 6.03 as the remedy for an Event of Default relating to its failure to comply with its obligations as set forth in Section 4.06(b), accrue at a rate in excess of
0.50% per annum, regardless of the number of events or circumstances giving rise to the requirement to pay such Additional Interest.
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(h) If Additional Interest is payable by the Company pursuant to Section 4.06(d) or
Section 4.06(e), the Company shall deliver to the Trustee an Officer’s Certificate to that effect stating (i) the amount of such Additional Interest that is payable and (ii) the date on which such Additional Interest is payable.
Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Additional Interest is payable. If the Company has paid Additional Interest directly
to the Persons entitled to it, the Company shall deliver to the Trustee an Officer’s Certificate setting forth the particulars of such payment.
Section 4.07. Stay, Extension and Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law that would prohibit or forgive the Company from paying all or any portion of the principal
of or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the performance of this Indenture; and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
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 October 31, 2015) an Officer’s Certificate stating whether the signers
thereof have knowledge of any Event of Default or Default that occurred during the previous fiscal year.
In addition, the Company
shall deliver to the Trustee, within 30 days after the occurrence of any Event of Default or Default, an Officer’s Certificate setting forth the details of such Event of Default or Default, its status and the action that the Company is taking
or proposing to take in respect thereof.
Section 4.09. Further Instruments and Acts. Upon request of the Trustee, the
Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.
Section 4.10. [Intentionally Omitted]
Section 4.11. Future Guarantees. If, on or after the first date of original issuance of the Notes and prior to the Maturity
Date, the Company or any of the Company’s Subsidiaries incur or guarantee any indebtedness that necessitates the guarantee of the 2023 Notes by any of the Company’s Subsidiaries pursuant to the terms of the 2023 Notes, or any of the
Company’s Subsidiaries guarantee the 2023 Notes for any other reason, each such Subsidiary that guarantees the 2023 Notes shall concurrently fully and unconditionally guarantee the Notes on the terms set forth in Article 13. The Company shall
cause each such Subsidiary to:
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(a) execute and deliver a supplemental indenture to this Indenture permitted by
Section 10.01(c), the form of which is attached as Exhibit B, pursuant to which such Subsidiary will agree to be a Guarantor under this Indenture and be bound by the terms of this Indenture applicable to Guarantors, including, but not limited
to, Article 13; provided that such Guarantor shall deliver to the Trustee an Opinion of Counsel (which may contain customary exceptions and qualifications as to the matters set forth therein) to the effect that:
(i) such Note Guarantee has been duly executed and authorized; and
(ii) such Note Guarantee constitutes a valid, binding and enforceable obligation of such Subsidiary, except insofar as
enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity; and
(b) waive and not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or
any other rights against the Company or any other Subsidiary as a result of any payment by such Subsidiary under its Note Guarantee.
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 15 days after each June 15 and December 15 in each year beginning with June 15, 2015, and at such other times as the Trustee may request in writing, within 30 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.
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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 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, and such failure continues for a period of five Business Days;
(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 corporate event in accordance with Section 14.01(b)(ii) or Section 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;
(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 $75,000,000 (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 indebtedness when due and payable at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise, if
such default is not cured or waived, or such acceleration is not rescinded, within 30 days after written notice to the Company by the Trustee or to the Company and the Trustee by Holders of at least 25% in principal amount of the Notes then
outstanding;
(h) 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
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(i) 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 90 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(h) or Section 6.01(i) with respect to the Company), unless the
principal of all of the Notes shall have already become due and payable, either the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding determined in accordance with Section 8.04, by 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(h) or Section 6.01(i) with respect to the Company occurs
and is continuing, 100% of the principal of, and accrued and unpaid interest, if any, on, all Notes shall become and shall automatically be immediately due and payable.
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 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 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.
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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 comply with its obligations as set forth in Section 4.06(b) shall (i) for the first 180 days
after the occurrence of such an Event of Default (which, for the avoidance of doubt, shall not commence until the 60-day period described in Section 6.01(f) has passed), 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 such 180-day period on which such Event of Default is continuing and (ii) for the period from, and including, the 181st day after
the occurrence of such an Event of Default to, and including, the 360th day after the occurrence of such an Event of Default, consist exclusively of the right to receive Additional Interest on the Notes at a rate equal to 0.50% per annum of the
principal amount of the Notes outstanding for each day during such additional 180-day period on which such an Event of Default is continuing. Subject to the last paragraph of this Section 6.03, Additional Interest payable pursuant to this
Section 6.03 shall be in addition to, not in lieu of, any Additional Interest payable pursuant to Section 4.06(d) or Section 4.06(e). 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 361st day after such Event of Default (if the Event of Default relating to the Company’s failure to file is not cured or waived prior to such 361st 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 its obligations as set forth in Section 4.06(b). 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.
In order to elect to pay Additional Interest as the sole remedy during the first 360 days after the occurrence of any Event of Default
described in the immediately preceding paragraph, the Company must notify all Holders of the Notes, the Trustee and the Paying Agent of such election prior to the beginning of such 360-day period (which, for the avoidance of doubt, shall not
commence until the 60-day period described in Section 6.01(f) has passed). Upon the failure to timely give such notice, the Notes shall be immediately subject to acceleration as provided in Section 6.02.
In no event shall Additional Interest payable at the Company’s election as the remedy for an Event of Default relating to its failure to
comply with its obligations under Section 4.06(b) as set forth in this Section 6.03, together with any interest that may accrue as a result of the Company’s failure to comply with its obligations as described in Section 4.06(d) and
Section 4.06(e), accrue at a rate in excess of 0.50% per annum, regardless of the number of events or circumstances giving rise to the requirement to pay such Additional Interest.
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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 reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceedings relative to the Company or any other obligor on the Notes, its or their creditors, or its or their property, and to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same
after the deduction of any amounts due to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization, liquidator, custodian or similar official is hereby authorized by each of the Holders to make such
payments to the Trustee, as administrative expenses, and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for reasonable compensation, 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 reasonable compensation, 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.
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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
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, and
stamping thereon the payment, if only partially paid, and upon surrender thereof, if fully paid:
First, to the payment of
all amounts due the Trustee under this Indenture;
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;
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Third, in case the principal of the outstanding Notes shall have become due, by
declaration or otherwise, and be unpaid to the payment of the whole amount (including, if applicable, the payment of the Fundamental Change Repurchase Price and any cash due upon conversion) then owing and unpaid upon the Notes for principal and
interest, if any, with interest on the overdue principal and, to the extent that such interest has been collected by the Trustee, upon overdue installments of interest at the rate borne by the Notes at such time, and in case such monies shall be
insufficient to pay in full the whole amounts so due and unpaid upon the Notes, then to the payment of such principal (including, if applicable, the Fundamental Change Repurchase Price and the cash due upon conversion) and interest without
preference or priority of principal over interest, or of interest over principal or of any installment of interest over any other installment of interest, or of any Note over any other Note, ratably to the aggregate of such principal (including, if
applicable, the Fundamental Change Repurchase Price and any cash due upon conversion) and accrued and unpaid interest; and
Fourth, to the payment of the remainder, if any, to the Company.
Section 6.06. Proceedings by Holders. Except to enforce the right to receive payment of principal (including, if
applicable, the Fundamental Change Repurchase Price) 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 to be incurred therein or thereby;
(d) the Trustee for 60 days after its receipt of such notice, request and offer of such security or indemnity, shall have neglected or refused
to institute any such action, suit or proceeding; and
(e) no written 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,
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it being understood and intended, and being expressly covenanted by the taker and Holder of every Note with every
other taker and Holder and the Trustee that no one or more Holders shall have any right in any manner whatever by virtue of or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other Holder, or to
obtain or seek to obtain priority over or preference to any other such Holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders (except as otherwise
provided herein). For the protection and enforcement of this Section 6.06, each and every Holder and the Trustee shall be entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision of any Note, the right of any Holder to receive payment or delivery,
as the case may be, of (x) the principal (including the Fundamental Change Repurchase Price, if applicable) of, (y) accrued and unpaid interest, if any, on, and (z) the consideration due upon conversion of, such Note, on or after the
respective due dates expressed or provided for in such Note or in this Indenture, or to institute suit for the enforcement of any such payment or delivery, as the case may be, on or after such respective dates against the Company shall not be
impaired or affected without the consent of such Holder.
Section 6.07. Proceedings by Trustee. In case of an Event of
Default, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as are necessary to protect and enforce any of such rights, either by suit in equity or by
action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal
or equitable right vested in the Trustee by this Indenture or by 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.
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
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such direction. The Trustee may refuse to follow any direction that it determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability.
The Holders of a majority in aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 8.04 may on behalf of the Holders of all of the Notes waive any past Default or Event of Default hereunder and
its consequences except (i) a default in the payment of accrued and unpaid interest, if any, on, or the principal (including any Fundamental Change Repurchase Price) 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 send to all Holders as the names and addresses of such Holders appear
upon the Note Register (or, in the case of Global Notes, pursuant to the customary procedures of the Depositary) notice of all Defaults actually known to a Responsible Officer within 90 days after a Responsible Officer receives written notice
thereof, unless such Defaults shall have been cured or waived before the giving of such notice; provided that, except in the case of a Default in the payment of the principal of (including the Fundamental Change Repurchase Price, 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 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
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.
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ARTICLE 7
CONCERNING THE TRUSTEE
Section 7.01. Duties and Responsibilities of Trustee. The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiver of all Events of Default that may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In the event an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in 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, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any of the Holders unless such
Holders have offered to the Trustee indemnity or security reasonably satisfactory to it against any loss, liability or expense that might be incurred by it in compliance with such request or direction.
No provision of this Indenture shall be construed to relieve the Trustee from liability for its own grossly negligent action, its own grossly
negligent failure to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default that may have occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith and willful misconduct on the
part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture; but, in the case of any such certificates or opinions that by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform
to the requirements of this Indenture (but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein);
(b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it
shall be proved that the Trustee was grossly negligent in ascertaining the pertinent facts;
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(c) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the Holders of not less than a majority of the aggregate principal amount of the Notes at the time outstanding determined as provided in Section 8.04 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;
(d) whether or not therein provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of this Section;
(e) the Trustee shall not be liable in respect of any
payment (as to the correctness of amount, entitlement to receive or any other matters relating to payment) or notice effected by the Company or any Paying Agent or any records maintained by any co-Note Registrar with respect to the Notes;
(f) if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to
the Trustee, the Trustee may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred, unless a Responsible Officer of the Trustee had actual knowledge of such event;
(g) in the absence of written investment direction from the Company, all cash received by the Trustee shall be placed in a non-interest bearing
trust account, and in no event shall the Trustee be liable for the selection of investments or for investment losses incurred thereon or for losses incurred as a result of the liquidation of any such investment prior to its maturity date or the
failure of the party directing such investments prior to its maturity date or the failure of the party directing such investment to provide timely written investment direction, and the Trustee shall have no obligation to invest or reinvest any
amounts held hereunder in the absence of such written investment direction from the Company; and
(h) in the event that the Trustee is also
acting as Custodian, Note Registrar, Paying Agent, Conversion Agent, 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.
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.
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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 Officer’s Certificate, an
Opinion of Counsel or both, and the Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion;
(b) the Trustee may conclusively rely and shall be fully protected in acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, note, coupon or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;
(c) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officer’s Certificate
(unless other evidence in respect thereof be herein specifically prescribed); and any Board Resolution may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;
(d) the Trustee may consult with counsel of its election and require an Opinion of Counsel and any advice of such counsel or Opinion of Counsel
shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;
(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 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) under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Notes;
(i) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder;
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(j) the Trustee shall not be required to give any bond or surety in respect of the performance of
its powers and duties hereunder; and
(k) the Trustee may request that the Company deliver a certificate setting forth the names of
individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.
In no event shall the
Trustee be liable for any consequential, punitive, indirect or special 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. 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 by any Holder of the Notes.
Section 7.03. No Responsibility for Recitals, Etc. The recitals contained herein and in the Notes (except in the
Trustee’s certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Notes. The Trustee shall not be accountable for the use or application by the Company of any Notes or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the provisions of this Indenture.
Section 7.04. Trustee, Paying Agents, Conversion Agents, Bid Solicitation Agent or Note Registrar May Own Notes.
The Trustee, any Paying Agent, any Conversion Agent, Bid Solicitation Agent (if other than the Company) 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 and Shares of Common Stock to Be Held in Trust. All monies and shares of Common Stock received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Money and
shares of Common Stock 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 or shares of Common Stock received by it
hereunder except as may be agreed from time to time by the Company and the Trustee.
Section 7.06. Compensation and
Expenses of Trustee. The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall receive, such compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust) as mutually agreed to 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
43
and disbursements of its agents and counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as shall have been caused by its gross negligence or
willful misconduct. 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 (whether asserted by the Company, a Holder or any other Person), damage, liability 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 the costs and expenses of defending
themselves against any claim of liability in the premises. The obligations of the Company under this Section 7.06 to compensate or indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall be
secured by a senior claim to which the Notes are hereby made subordinate on all money or property held or collected by the Trustee, except, subject to the effect of Section 6.05, funds held in trust herewith for the benefit of the Holders of
particular Notes. The Trustee’s right to receive payment of any amounts due under this Section 7.06 shall not be subordinate to any other liability or indebtedness of the Company. The obligation of the Company under this Section 7.06
shall survive the satisfaction and discharge of this Indenture and the earlier resignation or removal of the Trustee. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The
indemnification provided in this Section 7.06 shall extend to the officers, directors, agents and employees of the Trustee.
Without
prejudice to any other rights available to the Trustee under applicable law, when the Trustee and its agents and any authenticating agent incur expenses or render services after an Event of Default specified in Section 6.01(h) or
Section 6.01(i) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy, insolvency or similar laws.
Section 7.07. Officer’s Certificate and Opinion of Counsel 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 and willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by an Officer’s Certificate and
Opinion of Counsel delivered to the Trustee, and such Officer’s Certificate and Opinion of Counsel, in the absence of gross negligence and willful misconduct on the part of the Trustee, shall be full warrant to the Trustee for any action taken
or omitted by it under the provisions of this Indenture upon the faith thereof.
Section 7.08. Eligibility of
Trustee. There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act (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
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Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.
Section 7.09. Resignation or Removal of Trustee. (a) The Trustee may at any time resign by giving written notice of
such resignation to the Company and by mailing notice thereof to the Holders at their addresses as they shall appear on the Note Register. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written
instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the mailing of such notice of resignation to the Holders, the resigning Trustee may, upon ten Business Days’ notice to the Company and the Holders, petition any court of competent jurisdiction at the
expense of the Company for the appointment of a successor trustee, or any Holder who has been a bona fide holder of a Note or Notes for at least six months (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.
(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 at the expense of
the Company 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.
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(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.
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 claim to which the Notes are hereby made subordinate on all money or property held or collected by such trustee as such, except for funds held in trust for the
benefit of Holders of particular Notes, to secure any amounts then due it pursuant to the provisions of Section 7.06.
No successor
trustee shall accept appointment as provided in this Section 7.10 unless at the time of such acceptance such successor trustee shall be eligible under the provisions of Section 7.08.
Upon acceptance of appointment by a successor trustee as provided in this Section 7.10, each of the Company and the successor trustee, at
the written direction and at the expense of the Company shall mail or cause to be mailed notice of the succession of such trustee hereunder to the Holders at their addresses as they shall appear on the Note Register. If the Company fails to mail
such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Company.
Section 7.11. Succession by Merger, Etc. Any corporation or other entity into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation or other entity resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or other entity succeeding to all or substantially all of the
corporate trust business of the Trustee (including the administration of this Indenture), shall be the successor to the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto;
provided that in the case of any corporation or other entity succeeding to all or substantially all of the corporate trust business of the Trustee such corporation or other entity shall be eligible under the provisions of Section 7.08.
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In case at the time such successor to the Trustee shall succeed to the trusts created by
this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee or authenticating agent appointed by such predecessor trustee,
and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee or an authenticating agent appointed by such successor trustee may authenticate such Notes either in
the name of any predecessor trustee hereunder or in the name of the successor trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the
Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor trustee or to authenticate Notes in the name of any predecessor trustee shall apply only to its successor or successors
by merger, conversion or consolidation.
Section 7.12. Trustee’s Application for Instructions from the
Company. Any application by the Trustee for written instructions from the Company (other than with regard to any action proposed to be taken or omitted to be taken by the Trustee that affects the rights of the Holders of the Notes under this
Indenture) may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The
Trustee shall not be liable to the Company for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three
Business Days after the date any officer that the Company has indicated to the Trustee should receive such application actually receives such application, unless any such officer shall have consented in writing to any earlier date), unless, prior to
taking any such action (or the effective date in the case of any omission), the Trustee shall have received written instructions in accordance with this Indenture in response to such application specifying the action to be taken or omitted.
ARTICLE 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
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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 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. 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.
Section 8.04. Company-Owned Notes Disregarded. In determining whether the Holders of the requisite
aggregate principal amount of Notes have concurred in any direction, consent, waiver or other action under this Indenture, Notes that are owned by the Company, by any Subsidiary thereof or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any Subsidiary thereof shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, consent, waiver or other action only Notes that a Responsible Officer knows are so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 8.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to so act with respect to such Notes and that the pledgee is not the Company, a Subsidiary
thereof or a Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or a Subsidiary thereof. In the case of a dispute as to such right, any decision by the Trustee taken
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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 Officer’s Certificate listing and
identifying all Notes, if any, known by the Company to be owned or held by or for the account of any of the above described Persons; and, subject to Section 7.01, the Trustee shall be entitled to accept such Officer’s Certificate as
conclusive evidence of the facts therein set forth and of the fact that all Notes not listed therein are outstanding for the purpose of any such determination.
Section 8.05. Revocation of Consents; Future Holders Bound. At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 8.01, of the taking of any action by the Holders of the percentage of the aggregate principal amount of the Notes specified in this Indenture in connection with such action, any Holder of a Note that is shown by
the evidence to be included in the Notes the Holders of which have consented to such action may, by filing written notice with the Trustee at its Corporate Trust Office and upon proof of holding as provided in Section 8.02, revoke such action
so far as concerns such Note. Except as aforesaid, any such action taken by the Holder of any Note shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Note and of any Notes issued in exchange or
substitution therefor or upon registration of transfer thereof, irrespective of whether any notation in regard thereto is made upon such Note or any Note issued in exchange or substitution therefor or upon registration of transfer thereof.
ARTICLE 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;
(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.
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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 mailed to Holders of such Notes at their addresses as they shall appear on the Note Register. Such notice shall also be
mailed to the Company. Such notices shall be mailed 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 mailed 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 mailing 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.
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.
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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 mailed 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, may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes:
(a) to cure any ambiguity, omission, defect or inconsistency, as set forth in an Officer’s Certificate;
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(b) to provide for the assumption by a Successor Company of the obligations of the Company under
the Notes and this Indenture pursuant to Article 11;
(c) to add guarantees with respect to the Notes or to release a Guarantor in
accordance with Article 13;
(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 under this Indenture;
(f) to make any change that does not adversely affect the rights of any Holder;
(g) to increase the Conversion Rate as provided in Article 14;
(h) to provide for the acceptance of appointment by a successor trustee or facilitate the administration of the trusts under this Indenture by
more than one trustee;
(i) to provide that the Notes are convertible into Reference Property in connection with any Merger Event, subject
to the provisions of Section 14.02, and make such related changes to the terms of the Notes in accordance with Section 14.07;
(j) to conform the provisions of this Indenture or the Notes to the “Description of Notes” section of the Offering Memorandum, as set
forth in an Officer’s Certificate;
(k) to make any changes to the guarantee provisions of this Indenture in accordance with
Section 13.07; or
(l) to irrevocably elect a Settlement Method.
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 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 and the Trustee, at the Company’s expense, may from time to time and at any time
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enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner, waiving or eliminating any of the provisions of this Indenture
or the Notes 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;
(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) except as required by this Indenture, make any change that adversely affects the conversion rights of any Notes;
(e) reduce 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 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 filing with the Trustee of evidence satisfactory to it of the consent of Holders as aforesaid and subject to Section 10.05, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
Holders do not need under this Section 10.02 to approve the particular form of any proposed supplemental
indenture. It shall be sufficient if such Holders approve the substance thereof. After any such supplemental indenture becomes effective, the Company shall mail to the Holders a notice briefly describing such supplemental indenture. However, the
failure to give such notice to all the Holders, or any defect in the notice, will not impair or affect the validity of the supplemental indenture.
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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.
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 approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company or the Trustee shall so determine, new
Notes so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may, at the Company’s expense, be prepared and executed by the
Company, authenticated by the Trustee (or an authenticating agent duly appointed by the Trustee pursuant to Section 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 Officer’s Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article 10, is
permitted or authorized by this Indenture and is the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with such supplemental indenture’s terms.
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 the 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, by supplemental indenture all of the obligations of the
Company under the Notes and this Indenture; and
(b) immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing under this Indenture.
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Section 11.02. Successor Corporation to Be Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer or lease and upon the assumption by the Successor Company, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of
the principal of and accrued and unpaid interest on all of the Notes, the due and punctual delivery or payment, as the case may be, of any consideration due upon conversion of the Notes and the due and punctual performance of all of the covenants
and conditions of this Indenture to be performed by the Company, such Successor Company (if not the Company) shall succeed to and, except in the case of a lease of all or substantially all of the consolidated properties and assets of the Company and
its Subsidiaries, taken as a whole, 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. Opinion of Counsel to Be Given to Trustee. If the Successor Company is not the Company, no such
consolidation, merger, sale, conveyance, transfer or lease shall be effective unless the Trustee shall have received an Officer’s Certificate and an Opinion of Counsel certifying that any such consolidation, merger, sale, conveyance, transfer
or lease and any such assumption and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, complies with this Indenture.
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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.
ARTICLE 13
GUARANTEES
Section 13.01. Note Guarantee.
(a) If required pursuant to Section 4.11, and subject to this Article 13, each of the Guarantors hereby, jointly and severally,
irrevocably and unconditionally guarantees, on a senior basis, to each Holder and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Company hereunder
or thereunder, that (i) (x) the principal (including the Fundamental Change Repurchase Price, if applicable) of, (y) accrued and unpaid interest, if any, on, and (z) the consideration due upon conversion of, the Notes shall be
promptly paid in full when due, whether at maturity, by acceleration, conversion, repurchase or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders
or the Trustee hereunder or thereunder shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other
obligations, that same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration, upon conversion or repurchase or otherwise. Failing payment by the
Company when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not
a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder with respect to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment,
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demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all
demands whatsoever and covenants that this Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture, or pursuant to Section 13.06.
(c) If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to the Company or the Guarantors, any amount paid either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.
(d) Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (i) the obligations
guaranteed hereby may be accelerated as provided in Article 6 for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and
(ii) in the event of any declaration of acceleration of such obligations as provided in Article 6, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Note
Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantees.
(e) Each Note Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the
Company for liquidation, reorganization, should the Company become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Company’s assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee on the Notes or the Note Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or
any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.
(f) In case any provision of any Note Guarantee shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
(g) Each payment to be made by a Guarantor in respect of its
Note Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.
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Section 13.02. Limitation on Guarantor Liability. Each Guarantor, and by its
acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Debtor Relief Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar U.S. federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of each Guarantor shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws and after giving
effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 13, result in the obligations of such Guarantor
under its Note Guarantee not constituting a fraudulent conveyance or fraudulent transfer under applicable law. Each Guarantor that makes a payment under its Note Guarantee shall be entitled upon payment in full of all Note Guarantee obligations
under this Indenture to a contribution from each other Guarantor in an amount equal to such other Guarantor’s pro rata portion of such payment based on the respective net assets of all the Guarantors at the time of such payment determined in
accordance with GAAP.
Section 13.03. Execution and Delivery.
(a) To evidence its Note Guarantee set forth in Section 13.01, each Guarantor hereby agrees that a supplemental indenture to this
Indenture, the form of which is attached as Exhibit B, shall be executed on behalf of such Guarantor by an Officer or a person holding an equivalent title.
(b) Each Guarantor hereby agrees that its Note Guarantee set forth in Section 13.01 shall remain in full force and effect notwithstanding
the absence of the endorsement of any notation of such Note Guarantee on the Notes.
(c) If required by Section 4.11, the Company
shall cause any Subsidiary to comply with the provisions of Section 4.11 and this Article 13, to the extent applicable.
Section 13.04. Subrogation. Each Guarantor shall be subrogated to all rights of Holders against the Company in respect of
any amounts paid by any Guarantor pursuant to the provisions of Section 13.01; provided that, if an Event of Default has occurred and is continuing, no Guarantor shall be entitled to enforce or receive any payments arising out of, or
based upon, such right of subrogation until all amounts then due and payable by the Company under this Indenture or the Notes shall have been paid in full.
Section 13.05. Benefits Acknowledged. Each Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by this Indenture and that the guarantee and waivers made by it pursuant to its Note Guarantee are knowingly made in contemplation of such benefits.
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Section 13.06. Release of Note Guarantees.
(a) A Note Guarantee by a Guarantor shall be automatically and unconditionally released and discharged, and such Note Guarantee shall thereupon
terminate and be discharged and of no further force and effect, and no further action by such Guarantor, the Company or the Trustee shall be required for the release of such Guarantor’s Note Guarantee:
(i) (A) concurrently with any sale, exchange, disposition or transfer (by merger or otherwise) of any equity interests, or all
or substantially all assets, of such Guarantor in accordance with the applicable provisions of the 2023 Notes Indenture, following which such Guarantor is no longer a Subsidiary of the Company;
(B) upon the release or discharge of the Guarantee by such Guarantor of its Obligations (as such term is defined in the 2023
Notes Indenture) under the 2023 Notes;
(C) upon the merger or consolidation of such Guarantor with and into either the
Company or any other Guarantor that is the surviving Person in such merger or consolidation, or upon the liquidation of such Guarantor following the transfer of all or substantially all of its assets to either the Company or another Guarantor; or
(D) upon the Company’s obligations under this Indenture being discharged in accordance with the terms of this
Indenture and the Notes; and
(ii) upon such Guarantor delivering to the Trustee an Officer’s Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for in this Indenture relating to such release have been complied with.
(b) At the request of the Company, the Trustee shall execute and deliver any documents reasonably required in order to acknowledge such
release, discharge and termination in respect of the applicable Note Guarantee. Neither the Company nor any Guarantor shall be required to make a notation on the Notes to reflect any Note Guarantee or any such release, termination or discharge.
Section 13.07. Amendments. If, at any time on or after the first date of original issuance of the Notes and prior to the
Maturity Date, any provision of Article 10 of the 2023 Notes Indenture shall be amended, the Company and each Guarantor at such time shall execute with the Trustee concurrently with such amendment a supplemental indenture permitted under
Section 10.01(k) to conform the provisions set forth in Section 13.01, Section 13.02, Section 13.03, Section 13.04, Section 13.05 and Section 13.06 of this Indenture to such provisions under Article 10 of the 2023
Notes Indenture as amended.
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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 September 1, 2019 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 September 1, 2019 and prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date, in each case, at an initial
conversion rate of 62.7746 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 September 1, 2019, a Holder may surrender all or any portion of its Notes for conversion at any time during the five Business Day period immediately after any ten 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 and the Conversion Rate on each such Trading Day. The Trading Prices shall be determined by the Company using bids solicited by the Bid Solicitation Agent,
all 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 (if other than the Company) 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 (if other than the Company) shall have no obligation to solicit bids pursuant to
this subsection (b)(i) and the definition of Trading Price set forth in this Indenture unless the Company has requested such solicitation in writing, and the Company shall have no obligation to make such request (or, if the Company is acting as Bid
Solicitation Agent, the Company shall have no obligation to solicit bids) or to determine the Trading Price per $1,000 principal amount of Notes unless a Holder of at least $2,000,000 aggregate principal amount of Notes provides the Company with
reasonable evidence that the Trading Price per $1,000 principal amount of Notes would be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate, at which time the Company shall instruct the Bid
Solicitation Agent (if other than the Company) to solicit, or if the Company is acting as Bid Solicitation Agent, the Company shall solicit, such bids 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. The Company shall determine the Trading Price based on the bids it receives from the Bid
Solicitation Agent pursuant to this clause (b)(i) and the definition of Trading Price set forth in this Indenture. If (x) the Company is not acting as Bid Solicitation Agent, and the Company does not instruct the Bid Solicitation
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Agent, in writing, to solicit bids when obligated as provided in the second immediately preceding sentence, or if the Company instructs the Bid Solicitation Agent, in writing, to solicit bids and
the Bid Solicitation Agent fails to make such solicitation, (y) the Company is acting as Bid Solicitation Agent and the Company fails to make such solicitation when obligated as provided in the second immediately preceding sentence or
(z) the Company does not determine the Trading Price per $1,000 principal amount of Notes as required pursuant to this subsection (b)(i) and the definition of Trading Price set forth in this Indenture, then, in each 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 and the Notes are convertible pursuant to this Section 14.01(b)(i), 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. The Bid Solicitation Agent (if other than the Company) shall have no responsibility to determine the Trading Price of the Notes or whether
the Notes are convertible pursuant to this Section 14.01(b)(i).
(ii) If, prior to the close of business on the Business
Day immediately preceding September 1, 2019, the Company elects to:
(A) issue to all or substantially all holders of
the Common Stock any rights, options or warrants (other than in connection with a stockholder rights plan prior to separation of the relevant rights) entitling them, for a period of not more than 60 calendar days after the declaration date for 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 declaration date for 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, 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 declaration date 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) at least 40 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.
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(iii) If (A) a transaction or event that constitutes a Fundamental Change or
a Make-Whole Fundamental Change occurs prior to the close of business on the Business Day immediately preceding September 1, 2019, 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 consolidation, merger, binding share exchange, or transfer or lease of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, prior to
the close of business on the Business Day immediately preceding September 1, 2019, in each case, pursuant to which the Common Stock would be converted into cash, securities or other assets, then, in the case of either (A) or (B), all or
any portion of a Holder’s Notes may be surrendered for conversion at any time from or after the effective date of such transaction or event until 35 Trading Days after the effective date of such transaction or event (or, if the Company gives
notice after the effective date of such transaction or event pursuant to the succeeding sentence, until the 35th Trading Day after the Company gives such notice) or, if such transaction or 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) within three Business Days of the effective date of such transaction or event.
(iv) Prior to the close of business on the Business Day immediately preceding September 1, 2019, a Holder may surrender
all or any portion of its Notes for conversion at any time during any fiscal quarter commencing after the fiscal quarter ending on May 2, 2015 (and only during such fiscal quarter), if the Last Reported Sale Price of the Common Stock for at
least 20 Trading Days (whether or not consecutive) during the period of 30 consecutive Trading Days ending on the last Trading Day of the immediately preceding fiscal quarter is greater than or equal to 130% of the Conversion Price on each
applicable Trading Day. The Company shall determine at the beginning of each fiscal quarter commencing after May 2, 2015 whether the Notes may be surrendered for conversion in accordance with this clause (iv) and shall notify the Holders
of the Notes, the Trustee and the Conversion Agent (if other than the Trustee) if the Notes become convertible in accordance with this clause (iv).
Section 14.02. Conversion Procedure; Settlement Upon Conversion.
(a) Subject to this Section 14.02, Section 14.03(b) and Section 14.07(a), 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.
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(i) All conversions for which the relevant Conversion Date occurs on or after
September 1, 2019 shall be settled using the same Settlement Method.
(ii) Except for any conversions for which the
relevant Conversion Date occurs on or after September 1, 2019, 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 the period
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, through the Trustee, shall deliver such Settlement Notice to converting Holders no later than the close of business on the Trading Day immediately following the relevant Conversion Date (or, in the case of
any conversions for which the relevant Conversion Date occurs on or after September 1, 2019, no later than September 1, 2019). 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 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 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. At any time prior to September 1, 2019, the Company may irrevocably elect to settle all conversions through
Combination Settlement with a Specified Dollar Amount the Company elects.
(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, 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;
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(B) if the Company elects to satisfy its Conversion Obligation in respect of such
conversion by Cash Settlement, 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 30 consecutive
Trading Days during the related Observation Period; 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, 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 30 consecutive Trading Days during the related Observation Period.
(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 thereof) (a “Notice of Conversion”) at the office of the Conversion Agent and state in writing therein the principal amount of Notes to be converted and the name or names (with addresses) in which such
Holder wishes the certificate or certificates for any shares of Common Stock to be delivered upon settlement of the Conversion Obligation to be registered, (2) surrender such Notes, duly endorsed to the Company or in blank (and accompanied by
appropriate endorsement and transfer documents), at the office of the Conversion Agent, (3) if required, furnish appropriate endorsements and transfer documents, (4) if required, pay all transfer and similar taxes as set forth in
Section 14.02(d) and Section 14.02(e) and (5) 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.
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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 third Business Day immediately following the relevant Conversion Date, if the Company elects Physical Settlement (unless such Conversion Date is on or after the Regular Record Date immediately preceding
the Maturity Date, in which case the Company shall deliver the consideration due in respect of such Conversion Obligation on the Maturity Date), or on the third 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 converting Holders, the Company shall issue or cause to be issued, and deliver to the Conversion Agent or to such Holder, or such Holder’s nominee or nominees,
certificates or a book-entry transfer through the Depositary for the full number of shares of Common Stock to which such Holder shall be entitled in satisfaction of the Company’s Conversion Obligation.
(d) In case any Note shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to
or upon the written order of the Holder of the Note so surrendered a new Note or Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Note, without payment of any service charge by
the converting Holder but, if required by the Company or Trustee, with payment of a sum sufficient to cover any documentary, stamp or similar issue or transfer tax or similar governmental charge required by law or that may be imposed in connection
therewith as a result of the name of the Holder of the new Notes issued upon such conversion being different from the name of the Holder of the old Notes surrendered for such conversion.
(e) If a Holder submits a Note for conversion, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue
of any shares of Common Stock upon conversion, unless the tax is due because the Holder requests such shares to be issued in a name other than the Holder’s name, in which case the Holder shall pay that tax. The Conversion Agent may refuse to
deliver the certificates representing the shares of Common Stock being issued in a name other than the Holder’s name until the Trustee receives a sum sufficient to pay any tax that is due by such Holder in accordance with the immediately
preceding sentence.
(f) Except as provided in Section 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.
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(g) Upon the conversion of an interest in a Global Note, the Trustee, or the Custodian at the
direction of the Trustee, shall make a notation on such Global Note as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in writing of any conversion of Notes effected through any Conversion Agent
other than the Trustee.
(h) Upon conversion, a Holder shall not receive any separate cash payment for accrued and unpaid interest, if any,
except as set forth below. The Company’s settlement of the full Conversion Obligation shall be deemed to satisfy in full its obligation to pay the principal amount of the Note and accrued and unpaid interest, if any, to, but not including, the
relevant Conversion Date. As a result, accrued and unpaid interest, if any, to, but not including, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. 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, 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 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 (3) to the extent of any Defaulted Amounts, if any Defaulted Amounts exists at the time of conversion with respect
to such Note. Therefore, for the avoidance of doubt, all Holders of record on the Regular Record Date immediately preceding the Maturity Date and any Fundamental Change Repurchase Date described in clause (2) of the immediately preceding
sentence shall receive the full interest payment due on the Maturity Date or other applicable Interest Payment Date 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.
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Section 14.03. Increased Conversion Rate Applicable to Certain Notes Surrendered in
Connection with Make-Whole Fundamental Changes. (a) If a Make-Whole Fundamental Change occurs or becomes effective prior to the Maturity Date and a Holder elects to convert its Notes in connection with such Make-Whole Fundamental Change,
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”).
(b) Upon surrender of Notes for conversion in connection with a Make-Whole Fundamental Change pursuant to Section 14.01(b)(iii), 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; 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. In such event, the Conversion Obligation shall be paid to Holders in cash on the third Business Day following the Conversion Date. The Company
shall notify the Holders of Notes of the Effective Date of any Make-Whole Fundamental Change no later than five Business Days after such Effective Date.
(c) The number of Additional Shares, if any, by which the Conversion Rate shall be increased shall be determined by reference to the table
below, based on the date on which the Make-Whole Fundamental Change occurs or becomes effective (the “Effective Date”) and the price (the “Stock Price”) paid (or deemed to be paid) per share of the Common Stock in
the Make-Whole Fundamental Change. 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 Trading Day period ending on, and including, the Trading Day immediately preceding the Effective
Date of the Make-Whole Fundamental Change. The Board of Directors shall make appropriate adjustments to the Stock Price, in its good faith determination, to account
67
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.
(d) The Stock Prices set forth
in the column headings of the table below shall be adjusted as of any date on which the Conversion Rate of the Notes is otherwise adjusted. The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to such adjustment,
multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to such adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of
Additional Shares set forth in the table below shall be adjusted in the same manner and at the same time as the Conversion Rate as set forth in Section 14.04.
(e) The following table sets forth the number of Additional Shares of Common Stock by which the Conversion Rate shall be increased per $1,000
principal amount of Notes pursuant to this Section 14.03 for each Stock Price and Effective Date set forth below:
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Stock Price |
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| Effective Date |
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$11.80 |
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$12.00 |
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$14.00 |
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$15.93 |
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$18.00 |
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$20.00 |
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$25.00 |
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$30.00 |
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$35.00 |
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$40.00 |
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$45.00 |
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$50.00 |
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| January 14, 2015 |
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21.9711 |
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21.1050 |
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14.3336 |
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10.0992 |
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7.0906 |
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5.1350 |
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2.4556 |
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1.2663 |
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0.6860 |
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0.3800 |
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0.2093 |
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0.1102 |
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| January 1, 2016 |
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21.9711 |
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20.3208 |
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13.3943 |
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9.1450 |
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6.1994 |
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4.3405 |
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1.9184 |
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0.9257 |
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0.4743 |
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0.2500 |
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0.1307 |
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0.0648 |
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| January 1, 2017 |
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21.9711 |
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19.8058 |
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12.5443 |
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8.1940 |
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5.2800 |
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3.5180 |
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1.3872 |
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0.6123 |
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0.2943 |
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0.1475 |
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0.0738 |
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0.0350 |
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| January 1, 2018 |
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21.9711 |
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19.5158 |
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11.6436 |
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7.0791 |
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4.1861 |
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2.5610 |
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0.8380 |
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0.3300 |
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0.1517 |
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0.0763 |
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0.0389 |
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0.0190 |
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| January 1, 2019 |
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21.9711 |
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19.4125 |
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10.3657 |
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5.3792 |
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2.5967 |
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1.3035 |
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0.3008 |
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0.1123 |
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0.0600 |
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0.0373 |
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0.0231 |
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0.0128 |
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| January 1, 2020 |
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21.9711 |
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20.5583 |
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8.6543 |
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0.0000 |
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0.0000 |
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0.0000 |
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0.0000 |
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0.0000 |
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0.0000 |
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0.0000 |
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0.0000 |
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0.0000 |
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The exact Stock Prices and Effective Dates may not be set forth in the table above, in which case:
(i) if the Stock Price is between two Stock Prices in the table above or the Effective Date is between two Effective Dates in
the table, the number of Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Prices and the earlier and later Effective Dates, as applicable, based
on a 365-day year;
(ii) if the Stock Price is greater than $50.00 per share (subject to adjustment in the same manner as
the Stock Prices set forth in the column headings of the table above pursuant to subsection (d) above), no Additional Shares shall be added to the Conversion Rate; and
(iii) if the Stock Price is less than $11.80 per share (subject to adjustment in the same manner as the Stock Prices set forth
in the column headings of the table above pursuant to subsection (d) above), no Additional Shares shall be added to the Conversion Rate.
68
Notwithstanding the foregoing, in no event shall the Conversion Rate per $1,000 principal amount of Notes exceed
84.7457 shares of Common Stock, subject to adjustment in the same manner as the Conversion Rate pursuant to Section 14.04.
(f)
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, the Conversion Rate shall be adjusted based on the following formula:
where,
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| CR0 |
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= |
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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; |
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| CR’ |
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= |
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the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date or Effective Date; |
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| OS0 |
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= |
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the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date or Effective Date; and |
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| OS’ |
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= |
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the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination. |
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.
69
(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 prior to separation of the relevant rights) entitling them, for a period of not more than 60 calendar days after the declaration date for 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
declaration date for such issuance, the Conversion Rate shall be increased based on the following formula:
where,
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| CR0 |
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= |
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the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such issuance; |
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| CR’ |
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= |
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the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date; |
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| OS0 |
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= |
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the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date; |
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| X |
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= |
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the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and |
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| Y |
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= |
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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 declaration date for 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.
70
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 declaration date 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 (other than in connection with a stockholder rights plan prior to separation of the relevant rights) 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 the provisions set forth in
Section 14.04(d) shall apply, (iii) distributions of Reference Property in exchange for, or upon conversion of, Common Stock in a Merger Event, (iv) except as otherwise provided in Section 14.11, rights issued pursuant to a
stockholder rights plan adopted by the Company 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,
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| CR0 |
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= |
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the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution; |
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| CR’ |
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= |
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the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date; |
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| SP0 |
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= |
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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 |
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| FMV |
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= |
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the fair market value (as determined by the Board of Directors) of the Distributed Property with respect to each outstanding share of the Common Stock on the Ex-Dividend Date for such distribution. |
71
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 or, in the case of a distribution of rights, options or warrants, such rights, options or warrants are not exercised prior to their
expiration, 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 to a Subsidiary or other business unit of the
Company, that are, or, when issued, will be, listed or admitted for trading on a U.S. national securities exchange (a “Spin-Off”), the Conversion Rate shall be increased based on the following formula:
where,
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| CR0 |
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= |
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the Conversion Rate in effect immediately prior to the end of the Valuation Period; |
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| CR’ |
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= |
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the Conversion Rate in effect immediately after the end of the Valuation Period; |
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| FMV0 |
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= |
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the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock (determined by reference to the definition of Last
Reported Sale Price as set forth in Section 1.01 as if references therein to Common Stock were to such Capital Stock or similar equity interest) over the first 10 consecutive Trading Day period after, and including, the Ex-Dividend Date of the
Spin-Off (the “Valuation Period”); and |
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| MP0 |
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= |
|
the average of the Last Reported Sale Prices of the Common Stock over the Valuation Period. |
72
The increase to the Conversion Rate under the preceding paragraph shall occur on the last Trading Day of
the Valuation Period; provided that in respect of any conversion of Notes during the Valuation Period, references in the portion of this Section 14.04(c) related to Spin-Offs with respect to 10 Trading Days 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. If the Ex-Dividend Date of the Spin-Off is after the 10th Trading Day immediately
preceding, and including, the end of any Observation Period in respect of a conversion of Notes, references in the preceding paragraph to 10 Trading Days will be deemed to be replaced, solely in respect of that conversion of Notes, with such lesser
number of Trading Days as have elapsed from, and including, the Ex-Dividend Date for the Spin-Off to, and including, the last Trading Day of such Observation Period.
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.
73
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”),
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, other than a regular,
quarterly cash dividend that does not exceed $0.035 per share (the “Initial Dividend Threshold”), the Conversion Rate shall be adjusted based on the following formula:
where,
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| CR0 |
|
= |
|
the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution; |
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| CR’ |
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= |
|
the Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution; |
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| 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; |
74
|
|
|
|
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| T |
|
= |
|
the Initial Dividend Threshold; provided that if the dividend or distribution is not a regular quarterly cash dividend, the Initial Dividend Threshold shall be deemed to be zero; and |
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| C |
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= |
|
the amount in cash per share the Company distributes to all or substantially all holders of the Common Stock. |
The Initial Dividend Threshold shall be subject to adjustment in a manner inversely proportional to adjustments to the
Conversion Rate; provided that no adjustment shall be made to the Initial Dividend Threshold for any adjustment to the Conversion Rate pursuant to this Section 14.04(d).
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, 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 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:
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; |
|
|
|
| CR’ |
|
= |
|
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; |
75
|
|
|
|
|
| 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); |
|
|
|
| OS’ |
|
= |
|
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 |
|
|
|
| SP’ |
|
= |
|
the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires. |
The increase to the Conversion Rate under this Section 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 in respect of any conversion of Notes within the 10 Trading Days immediately following, and including, the
expiration date of any tender or exchange offer, references in this Section 14.04(e) with respect to 10 Trading Days 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. In addition, if the Trading Day next succeeding the date such tender or exchange offer expires is after the 10th Trading Day immediately preceding, and including, the end of
any Observation Period in respect of a conversion of Notes, references in the preceding paragraph to 10 Trading Days shall be deemed to be replaced, solely in respect of that conversion of Notes, with such lesser number of Trading Days as have
elapsed from, and including, the Trading Day next succeeding the date such tender or exchange offer expires to, and including, the last Trading Day of such Observation Period. If the Company is obligated to purchase shares of the Common Stock
pursuant to any such tender or exchange offer described in this Section 14.04(e) but is permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the applicable Conversion Rate shall be decreased
to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made or had been made only in respect of the purchases that have been effected.
(f) 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.
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(g) 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.
(h) 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 rules of any exchange on which any of the Company’s securities are then listed, the Company from time to time may increase the Conversion Rate by any amount for a period of at least 20
Business Days if the Board of Directors determines that such increase would be in the Company’s best interest. In addition, to the extent permitted by applicable law and subject to the applicable rules of any exchange on which any of the
Company’s securities are then listed, the Company may (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in connection with a dividend or
distribution of shares 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 mail to the Holder of each Note at
its last address appearing on the Note Register a 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.
(i) 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;
(iii) upon the issuance of any shares of the Common Stock pursuant to any option, warrant, right or exercisable, exchangeable
or convertible security not described in clause (ii) of this subsection and outstanding as of the date the Notes were first issued;
(iv) upon the repurchase of any shares of the Common Stock pursuant to an open-market share repurchase program or other
buy-back transaction that is not a tender offer or exchange offer of the nature described in Section 14.04(e);
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(v) solely for a change in the par value of the Common Stock; or
(vi) for accrued and unpaid interest, if any.
(j) 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. The Company shall not adjust the Conversion Rate pursuant to clause (a), (b), (c), (d) or (e) of this Section 14.04 unless the adjustment would result in a change of at least 1% in the
then-effective Conversion Rate. However, the Company shall carry forward any adjustment to the Conversion Rate that is less than 1% of the then-effective Conversion Rate and take that adjustment into account in any subsequent adjustment.
Notwithstanding the foregoing, all such carried-forward adjustments shall be made (i) in connection with any subsequent adjustment to the Conversion Rate of at least 1%, (ii) on the Conversion Date for any Notes (in the case of Physical
Settlement), (iii) on each Trading Day of any Observation Period (in the case of Cash Settlement or Combination Settlement) and (iv) on the Effective Date of any Make-Whole Fundamental Change, unless the adjustment has already been made.
(k) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee (and the Conversion
Agent if not the Trustee) an Officer’s Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall
have received such Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has knowledge is still in effect.
Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Conversion Rate to each Holder at its last address appearing on the Note Register of this Indenture. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.
(l) 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), 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.
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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:
(i) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or
combination),
(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 “Merger Event”), then, at and after the effective time of such Merger 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 Merger 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 Merger Event and, prior to or at the effective time of such Merger 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(i) 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 Merger 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 Merger Event and (III) the Daily VWAP shall be calculated
based on the value of a unit of Reference Property.
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If the Merger Event causes the Common Stock to be converted into, or exchanged for, the
right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), then (i) the Reference Property into which the Notes will be convertible shall be deemed to be (x) the weighted
average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election or (y) if no holders of Common Stock affirmatively make such an election, the types and amounts of consideration
actually received by the holders of Common Stock, and (ii) the unit of Reference Property for purposes of the immediately preceding paragraph shall refer to the consideration referred to in clause (i) attributable to one share of Common
Stock. If the holders of the Common Stock receive only cash in such Merger Event, then for all conversions for which the relevant Conversion Date occurs after the effective date of such Merger 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 Merger Event and (B) the Company shall satisfy the Conversion Obligation by paying cash to converting Holders on the third Business Day immediately following the relevant Conversion Date. The Company shall
notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) of such weighted average as soon as practicable after such determination is made.
If the Reference Property in respect of any such Merger Event includes shares of common equity, 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 Merger Event, the Reference
Property includes shares of stock, securities or other property or assets (other than cash and/or cash equivalents) of a Person other than the Company or the successor or purchasing corporation, as the case may be, then, if such Person is an
Affiliate of the Company or an Affiliate of the successor or purchasing corporation, 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 Company shall reasonably consider necessary or appropriate.
(b) When the Company executes a supplemental indenture pursuant
to subsection (a) of this Section 14.07, the Company shall promptly file with the Trustee an Officer’s Certificate briefly stating the reasons therefor, the kind or amount of cash, securities or property or asset that will comprise a
unit of Reference Property after any such Merger Event, any adjustment to be made with respect thereto and that all conditions precedent have been complied with, and shall promptly mail notice thereof to all Holders. The Company shall cause notice
of the execution of such supplemental indenture to be mailed to each Holder, at its address appearing on the Note Register provided for in this Indenture, within 20 days after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.
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(c) The Company shall not become a party to any Merger 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 Merger Event.
(d) The above provisions of this Section shall
similarly apply to successive Merger Events.
(e) In connection with any Merger Event, the Initial Dividend Threshold shall be subject to
adjustment as described in clause (i), clause (ii) or clause (iii) below, as the case may be.
(i) In the
case of a Merger Event in which the Reference Property (determined, as appropriate, pursuant to subsection (a) above and excluding any dissenters’ appraisal rights) is composed entirely of shares of common stock (the “Merger Common
Stock”), the Initial Dividend Threshold at and after the effective time of such Merger Event will be equal to (x) the Initial Dividend Threshold immediately prior to the effective time of such Merger Event, divided
by (y) the number of shares of Merger Common Stock that a holder of one share of Common Stock would receive in such Merger Event (such quotient rounded down to the nearest cent).
(ii) In the case of a Merger Event in which the Reference Property (determined, as appropriate, pursuant to subsection
(a) above and excluding any dissenters’ appraisal rights) is composed in part of shares of Merger Common Stock, the Initial Dividend Threshold at and after the effective time of such Merger Event will be equal to (x) the Initial
Dividend Threshold immediately prior to the effective time of such Merger Event, multiplied by (y) the Merger Valuation Percentage for such Merger Event (such product rounded down to the nearest cent).
(iii) For the avoidance of doubt, in the case of a Merger Event in which the Reference Property (determined, as appropriate,
pursuant to subsection (a) above and excluding any dissenters’ appraisal rights) is composed entirely of consideration other than shares of common stock, the Initial Dividend Threshold at and after the effective time of such Merger Event
will be equal to zero.
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.
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(c) The Company further covenants that if at any time the Common Stock shall be listed on any
national securities exchange or automated quotation system the Company will list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, any Common Stock issuable upon conversion of the Notes.
Section 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 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 Officer’s Certificate (which the Company shall be obligated
to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto. Neither the Trustee nor the Conversion Agent shall be responsible for determining whether any event contemplated by Section 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).
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) Merger Event; or
(c) voluntary or involuntary dissolution, liquidation or winding-up of the Company;
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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 filed with the Trustee and the Conversion Agent (if other than the Trustee) and to be mailed to each Holder at its address appearing on the Note Register, as promptly as possible but in any event at least 10
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 Merger 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 Merger 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, Merger 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. 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. Limit on Issuance of Shares of Common Stock Upon Conversion. Notwithstanding anything to the contrary in
this Indenture, if an event occurs that would result in an increase in the Conversion Rate by an amount in excess of limitations imposed by any shareholder approval rules or listing standards of any national or regional securities exchange that are
applicable to the Company, the Company will, at its option, either obtain stockholder approval of any issuance of Common Stock upon conversion of the Notes in excess of such limitations or pay cash in lieu of delivering any shares of Common Stock
otherwise deliverable upon conversions in excess of such limitations based on the Daily VWAP for each Trading Day of the relevant Observation Period in respect of which, in lieu of delivering shares of Common Stock, the Company pays cash pursuant to
this Section 14.12.
Section 14.13. Exchange in Lieu of Conversion. Notwithstanding anything herein to the
contrary, when a Holder surrenders Notes for conversion, the Company may, at its election (an “Exchange Election”), direct the Conversion Agent to surrender, on or prior to the second Trading Day following the
Conversion Date, such Notes to one or more financial institutions designated by the Company for exchange in lieu of conversion. In order to accept any Notes surrendered for conversion, the designated financial institution(s) must agree to timely pay
and/or deliver, in exchange for such Notes, the cash, shares of Common Stock or combination
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thereof due upon conversion, all as provided in this Article 14. If the Company makes an Exchange Election, by the close of business on the second Trading Day following the relevant Conversion
Date, (i) the Company shall notify the Holder surrendering Notes for conversion that the Company has made the Exchange Election and shall notify the designated financial institution(s) of the Settlement Method the Company has elected with
respect to such conversion and the relevant deadline for payment and/or delivery of the cash, shares of Common Stock or combination thereof due upon conversion, and (ii) such designated financial institution(s) shall notify the Conversion Agent
whether it will pay and/or deliver the consideration due upon conversion upon exchange.
If the designated financial institution(s)
accepts any such Notes, it (or they) shall pay and/or deliver the cash, shares of Common Stock or combination thereof due upon conversion to the Conversion Agent and the Conversion Agent shall pay and/or deliver such cash, shares of Common Stock or
combination thereof to the relevant Holder. Any Notes exchanged by the designated financial institution(s) shall remain outstanding. If the designated financial institution(s) agrees to accept any Notes for exchange but does not timely pay and/or
deliver the cash, shares of Common Stock or combination thereof due upon conversion, or if such designated financial institution(s) does not accept the Notes for exchange, the Company shall pay and/or deliver the cash, shares of Common Stock or
combination thereof due upon conversion to the converting Holder at the time and in the manner provided in this Article 14 as if the Company had not made an Exchange Election.
The Company’s designation of a financial institution(s) to which Notes may be submitted for exchange does not require the financial
institution(s) to accept any Notes. The Company may, but is not obligated to, pay any consideration to, or otherwise enter into any agreement with, any designated financial institution(s) for or with respect to such designation.
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 prior to the Maturity Date, each Holder shall have the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Notes, or any portion 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 Business Days or more than 35 Business Days following the date of the Fundamental Change Company Notice
at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon to, but excluding, the Fundamental Change Repurchase Date (the “Fundamental Change Repurchase
Price”), unless the Fundamental Change Repurchase Date falls after a Regular Record Date but on or prior to the Interest Payment Date to which such Regular Record Date relates, in which case the Company shall instead pay the full
amount of accrued and unpaid interest to Holders of record as of such Regular Record Date, and the Fundamental Change Repurchase Price shall be equal to 100% of the principal amount of Notes to be repurchased pursuant to this Article 15.
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(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, 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.
The Fundamental Change Repurchase Notice in respect of any Notes to be repurchased shall state:
(i) in the case of Physical Notes, the certificate numbers of the Notes to be delivered for repurchase;
(ii) the portion of the principal amount of Notes to be repurchased, which must be $1,000 or an integral multiple thereof; and
(iii) that the Notes are to be repurchased by the Company pursuant to the applicable provisions of the Notes and this
Indenture;
provided, however, that if the Notes are Global Notes, the Fundamental Change Repurchase Notice 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.
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(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 and the Paying Agent (in the case of a Paying Agent 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. 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;
(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 Trustee shall give such notice in the Company’s name and at the Company’s expense; provided, however, that, in all cases, the text of such Fundamental Change Company Notice shall be prepared by the Company.
(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
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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 Corporate Trust Office of the Paying Agent 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,
(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 principal amounts 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.
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 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.
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(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 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 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 Note in an authorized denomination equal in principal amount to the unrepurchased portion of the Note surrendered.
Section 15.05. Covenant to Comply with Applicable Laws Upon Repurchase of Notes. In connection with any repurchase offer
upon a Fundamental Change pursuant to this Article 15, the Company will, if required:
(a) comply with the provisions of Rule 13e-4,
Rule 14e-1 and any other tender offer rules under the Exchange Act that may then be applicable;
(b) file a Schedule TO or any other
required schedule under the Exchange Act; and
(c) otherwise comply with all federal and state securities laws in connection with any offer
by the Company to repurchase the Notes;
in each case, so as to permit the rights and obligations under this Article 15 to be exercised in the time and in
the manner specified in this Article 15.
ARTICLE 16
NO REDEMPTION
Section 16.01. No Redemption. The Notes shall not be redeemable by the Company prior to the Maturity Date, and no sinking
fund is provided for the Notes.
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.
88
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 Brocade Communications Systems, Inc., 130
Holger Way, San Jose, CA 95134-1376, Attention: General Counsel. Any notice, direction, request or demand hereunder to or upon the Trustee 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 to the Corporate Trust Office or sent electronically in PDF format.
The Trustee, by notice to the Company, may designate additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to it by first class mail, postage prepaid, at its address as it appears
on the Note Register and shall be sufficiently given to it if so mailed within the time prescribed; provided that notices given to Holders of Global Notes may be given through the facilities of the Depositary.
Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a
notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.
In case by
reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice to Holders by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.
Section 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).
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
89
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 Company shall furnish to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such action is
permitted by the terms of this Indenture; provided that no Opinion of Counsel shall be required to be delivered in connection with (x) the original issuance of Notes on the date hereof under this Indenture and (y) the mandatory
exchange of the restricted Notes to an unrestricted CUSIP pursuant to the applicable procedures of the Depositary upon becoming freely tradable by non-Affiliates of the Company under Rule 144.
Each Officer’s Certificate and Opinion of Counsel provided for, by or on behalf of the Company or any Guarantor in this Indenture and
delivered to the Trustee with respect to compliance with this Indenture (other than the Officer’s Certificates provided for in Section 4.08) shall include (a) a statement that the 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 (d) a statement as to whether or not, in the
judgment of such person, such action is permitted by this Indenture and all conditions precedent have been complied with.
Section 17.06. Legal Holidays. In any case where any Interest Payment Date, Fundamental Change Repurchase Date or Maturity
Date is not a Business Day, then any action to be taken on such date need not be taken on such date, but may be taken on the next succeeding Business Day with the same force and effect as if taken on such date, and no interest shall accrue in
respect of the delay.
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.
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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 mail notice of such
appointment to all Holders as the names and addresses of such Holders appear on the Note Register.
The Company agrees to pay to the
authenticating agent from time to time reasonable compensation for its services although the Company may terminate the authenticating agent, if it determines such agent’s fees to be unreasonable.
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The provisions of Section 7.02, Section 7.03, Section 7.04, 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 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.
92
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 Trading Price of the Notes, determinations of whether the Notes are convertible and 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 and the Conversion Rate of the Notes. The Company shall make all these calculations
in good faith and, absent manifest error, the Company’s calculations shall be final and binding on Holders of Notes. The Company shall provide a schedule of its calculations to each of the Trustee and the Conversion Agent, and each of the
Trustee and Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The Trustee will forward the Company’s calculations to any Holder of Notes upon the written
request of that Holder at the sole cost and expense of the Company. The Trustee (including in its capacities as Note Registrar, Paying Agent and Conversion Agent, as the case may be) shall have no responsibility to determine the Trading Price of the
Notes or whether the Notes are convertible pursuant to Article 14.
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]
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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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| BROCADE COMMUNICATIONS SYSTEMS, |
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INC. |
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| By: |
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/s/ Daniel W. Fairfax |
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Name: Daniel W. Fairfax |
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Title: Senior Vice President, Finance and Chief Financial Officer |
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| WELLS FARGO BANK, NATIONAL |
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ASSOCIATION, as Trustee |
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| By: |
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/s/ Maddy Hall |
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Name: Maddy Hall |
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Title: Vice President |
EXHIBIT A
[FORM OF FACE OF NOTE]
[INCLUDE
FOLLOWING LEGEND IF A GLOBAL NOTE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREUNDER IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[INCLUDE FOLLOWING LEGEND IF A
RESTRICTED SECURITY]
[THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND 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 BROCADE COMMUNICATIONS SYSTEMS, INC. (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL,
PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE
SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR
A-1
(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 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-2
BROCADE COMMUNICATIONS SYSTEMS, INC.
1.375% Convertible Senior Note due 2020
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[Initially]1 $[ ] |
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| CUSIP No. [ ] |
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Brocade Communications Systems, 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.]2 [ ]3, or registered assigns, the principal sum [as set forth in the
“Schedule of Exchanges of Notes” attached hereto]4 [of $[ ]]5,
which amount, taken together with the principal amounts of all other outstanding Notes, shall not, unless permitted by the Indenture, exceed $575,000,000 in aggregate at any time, in accordance with the rules and procedures of the Depositary, on
January 1, 2020, and interest thereon as set forth below.
This Note shall bear interest at the rate of 1.375% per year from
January 14, 2015, or from 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, 2020. Interest is payable semi-annually in arrears on each
January 1 and July 1, commencing on July 1, 2015, 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. 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. Additional Interest will be payable as set forth in
Section 4.06(d), Section 4.06(e) and Section 6.03 of the within-mentioned Indenture, and any reference to interest on, or in respect of, any Note therein shall be deemed to include Additional Interest if, in such context, Additional
Interest is, was or would be payable pursuant to any of such Section 4.06(d), Section 4.06(e) or Section 6.03, and any express mention of the payment of Additional Interest in any provision therein shall not be construed as excluding
Additional Interest in those provisions thereof where such express mention is not made.
Any Defaulted Amounts shall accrue interest per
annum at the rate borne by the Notes, subject to the enforceability thereof under applicable law, from, and including, the relevant payment date to, but excluding, the date on which such Defaulted Amounts shall have been paid by the Company, at its
election, in accordance with Section 2.03(c) of the Indenture.
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Include if a global note. |
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Include if a global note. |
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Include if a physical note. |
| 4 |
Include if a global note. |
| 5 |
Include if a physical note. |
A-3
The Company shall pay the principal of and interest on this Note, if and so long as such Note is
a Global Note, in immediately available funds to the Depositary or its nominee, as the case may be, as the registered Holder of such Note. As provided in and subject to the provisions of the Indenture, the Company shall pay the principal of any
Notes (other than Notes that are Global Notes) at the office or agency designated by the Company for that purpose. The Company has initially designated the Trustee as its Paying Agent and Note Registrar in respect of the Notes and its agency in the
continental United States of America as a place where Notes may be presented for payment or for registration of transfer and exchange.
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-4
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
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| BROCADE COMMUNICATIONS SYSTEMS, |
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INC. |
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Name: |
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Title: |
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| Dated: |
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| TRUSTEE’S CERTIFICATE OF AUTHENTICATION
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Trustee, certifies that this is one of the Notes described in
the within-named Indenture. |
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| By: |
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Authorized Signatory |
A-5
[FORM OF REVERSE OF NOTE]
BROCADE COMMUNICATIONS SYSTEMS, INC.
1.375% Convertible Senior Note due 2020
This Note is one of a duly authorized issue of Notes of the Company, designated as its 1.375% Convertible Senior Notes due 2020 (the
“Notes”), limited to the aggregate principal amount of $575,000,000 all issued or to be issued under and pursuant to an Indenture dated as of January 14, 2015 (the “Indenture”), between the Company and Wells
Fargo Bank, National Association (the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the Holders of the Notes. Additional Notes may be issued in an unlimited aggregate principal amount, subject to certain conditions specified in the Indenture. Capitalized terms used in this Note and not
defined in this Note shall have the respective meanings set forth in the Indenture.
In 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 and the principal amount on the Maturity Date, as the case may
be, to the Holder who surrenders a Note to a Paying Agent to collect such payments in respect of the Note. The Company will pay cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private
debts.
The Indenture contains provisions permitting the Company and the Trustee in certain circumstances, without the consent of the
Holders of the Notes, and in certain other circumstances, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding, evidenced as in the Indenture provided, to execute supplemental
indentures modifying the terms of the Indenture and the Notes as described therein. It is also provided in the Indenture that, subject to certain exceptions, the Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may on behalf of the Holders of all of the Notes waive any past Default or Event of Default under the Indenture and its consequences.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay or deliver, as the case may be, the principal (including the Fundamental Change Repurchase Price, if applicable) of, accrued and unpaid interest on, and the consideration due upon conversion of, this Note
at the place, at the respective times, at the rate and in the lawful money and/or shares of Common Stock, as the case may be, herein prescribed.
A-6
The Notes are issuable in registered form without coupons in denominations of $1,000 principal
amount and integral multiples thereof. At the office or agency of the Company referred to on the face hereof, and in the manner and subject to the limitations provided in the Indenture, Notes may be exchanged for a like aggregate principal amount of
Notes of other authorized denominations, without payment of any service charge but, if required by the Company or Trustee, with payment of a sum sufficient to cover any transfer or similar tax that may be imposed in connection therewith as a result
of the name of the Holder of the new Notes issued upon such exchange of Notes being different from the name of the Holder of the old Notes surrendered for such exchange.
The Notes are not subject to redemption through the operation of any sinking fund or otherwise.
Upon the occurrence of a Fundamental Change, the Holder has the right, at such Holder’s option, to require the Company to repurchase for
cash all of such Holder’s Notes or any portion thereof (in principal amounts of $1,000 or integral multiples thereof) on the Fundamental Change Repurchase Date at a price equal to the Fundamental Change Repurchase Price. Under certain
circumstances, the Notes may be guaranteed by one or more Subsidiaries of the Company pursuant to the terms of the Indenture.
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 second Scheduled Trading Day
immediately preceding the Maturity Date, to convert any Notes or portion thereof that is $1,000 or an integral multiple thereof, into cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable, at the Conversion
Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture.
A-7
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM = as tenants in common
UNIF GIFT MIN ACT = Uniform Gifts to Minors Act
CUST =
Custodian
TEN ENT = as tenants by the entireties
JT TEN =
joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above
list.
A-8
SCHEDULE A6
SCHEDULE OF EXCHANGES OF NOTES
BROCADE COMMUNICATIONS SYSTEMS, INC.
1.375% Convertible Senior Notes due 2020
The initial principal amount of this Global Note is DOLLARS
($[ ]). The following increases or decreases in this Global Note have been made:
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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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| 6 |
Include if a global note. |
A-9
ATTACHMENT 1
[FORM OF NOTICE OF CONVERSION]
BROCADE COMMUNICATIONS SYSTEMS, INC.
1.375% Convertible Senior Notes due 2020
| To: |
WELLS FARGO BANK, NATIONAL ASSOCIATION |
608 2nd Avenue South, 12th Floor
Minneapolis, MN 55402
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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Signature(s) |
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| Signature Guarantee |
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| 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 |
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1
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| Notes are to be delivered, other than to and in the name of the registered holder.
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: |
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| (Name) |
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| (Street Address) |
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| (City, State and Zip Code) Please print name
and address |
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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. |
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Social Security or Other Taxpayer
Identification Number |
2
ATTACHMENT 2
[FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]
BROCADE COMMUNICATIONS SYSTEMS, INC.
1.375% Convertible Senior Notes due 2020
| To: |
WELLS FARGO BANK, NATIONAL ASSOCIATION |
608 2nd Avenue South, 12th Floor
Minneapolis, MN 55402
The undersigned registered owner of this Note hereby acknowledges receipt of a notice from Brocade Communications Systems, 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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| Dated:
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Signature(s) |
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Social Security or Other Taxpayer
Identification Number
Principal amount to be repaid (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. |
1
ATTACHMENT 3
[FORM OF ASSIGNMENT AND TRANSFER]
BROCADE COMMUNICATIONS SYSTEMS, INC.
1.375% Convertible Senior Notes due 2020
For
value received hereby sell(s), assign(s) and transfer(s) unto
(Please insert social security or Taxpayer Identification Number of assignee) the within Note, and hereby irrevocably constitutes and appoints
attorney to transfer the said Note on the books of the Company, with full power of substitution in the premises.
In connection with any transfer of the within Note occurring prior to the Resale Restriction Termination Date, as defined in the Indenture governing such
Note, the undersigned confirms that such Note is being transferred:
¨ To Brocade Communications Systems,
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.
1
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| Dated:
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| Signature(s) |
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| Signature Guarantee |
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| 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. |
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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.
2
EXHIBIT B
[FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY GUARANTORS]
SUPPLEMENTAL INDENTURE dated as of [ ]
[ ], 20[ ], among [ ] (the “Guaranteeing Subsidiary”), a subsidiary of Brocade Communications Systems, Inc., a
Delaware corporation (the “Company”), and Wells Fargo Bank, National Association, a national banking association, as trustee (the “Trustee”).
W I T N E S S E T H:
WHEREAS,
the Company has heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of January 14, 2015, providing for the issuance of the Company’s 1.375% Convertible Senior Notes due 2020 (the
“Notes”);
WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and
deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s obligations under the Notes and the Indenture on the terms and conditions set forth herein and
under the Indenture; and
WHEREAS, pursuant to Section 10.01(c) of the Indenture, the Trustee is authorized to execute and deliver
this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt
of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders as follows:
1. Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.
2. Guarantor. The Guaranteeing Subsidiary hereby agrees to be a Guarantor under the Indenture and to be bound by the terms of
the Indenture applicable to Guarantors, including, but not limited to, Article 13 thereof.
3. Governing Law. THIS SUPPLEMENTAL
INDENTURE AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS SUPPLEMENTAL INDENTURE 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).
4. Execution in Counterparts. This Supplemental 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 Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective
execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental 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.
B-1
5. Headings. The titles and headings of the sections of this Supplemental 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.
6. Trustee’s Disclaimer. The Trustee accepts the amendments of the Indenture effected by this Supplemental Indenture, but on the
terms and conditions set forth in the Indenture, including the terms and provisions defining and limiting the liabilities and responsibilities of the Trustee. Without limiting the generality of the foregoing, the Trustee shall not be responsible in
any manner whatsoever for or with respect to any of the recitals or statements contained herein, all of which recitals or statements are made solely by the Guaranteeing Subsidiary, or for or with respect to (i) the validity or sufficiency of
this Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper authorization hereof by the Guaranteeing Subsidiary by action or otherwise, (iii) the due execution hereof by the Guaranteeing Subsidiary or
(iv) the consequences of any amendment herein provided for, and the Trustee makes no representation with respect to any such matters.
B-2
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the date first written above.
|
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| [NAME OF GUARANTEEING SUBSIDIARY] |
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| By: |
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Name: |
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Title: |
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| WELLS FARGO BANK, NATIONAL |
|
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ASSOCIATION, as Trustee |
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| By: |
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Name: |
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Title: |
B-3
Exhibit 99.1
[DEALER INFORMATION]
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| To: Brocade Communications Systems, Inc.
130 Holger Way
San Jose, CA 95134-1376
Attention:
[Title of contact]
Telephone No.: [Telephone No.]
Re: [Base][Additional] Call
Option Transaction |
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January [8]1[9]2, 2015 |
The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the call option transaction entered into between [DEALER] (“Dealer”) and Brocade Communications Systems, Inc. (“Counterparty”) as of the Trade Date specified below (the “Transaction”).
This letter agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any previous agreements and serve as the final documentation for the Transaction.
[DEUTSCHE BANK AG, LONDON BRANCH IS NOT REGISTERED AS A BROKER DEALER UNDER THE U.S. SECURITIES EXCHANGE ACT OF 1934. DEUTSCHE BANK
SECURITIES INC. (“DBSI”) HAS ACTED SOLELY AS AGENT IN CONNECTION WITH THE TRANSACTION AND HAS NO OBLIGATION, BY WAY OF ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH RESPECT TO THE PERFORMANCE OF EITHER PARTY UNDER THE TRANSACTION. AS
SUCH, ALL DELIVERY OF FUNDS, ASSETS, NOTICES, DEMANDS AND COMMUNICATIONS OF ANY KIND RELATING TO THIS TRANSACTION BETWEEN DEUTSCHE BANK AG, LONDON BRANCH, AND COUNTERPARTY SHALL BE TRANSMITTED EXCLUSIVELY THROUGH DEUTSCHE BANK SECURITIES INC.
DEUTSCHE BANK AG, LONDON BRANCH IS NOT A MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC).]3
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”), as
published by the International Swaps and Derivatives Association, Inc. (“ISDA”) are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall
govern. Certain defined terms used herein are based on terms that are defined in the Offering Memorandum dated January 8, 2015 (the “Offering Memorandum”) relating to the 1.375% Convertible Senior Notes due 2020 (as originally
issued by Counterparty, the “Convertible Notes” and each USD 1,000 principal amount of Convertible Notes, a “Convertible Note”) issued by Counterparty in an aggregate initial principal amount of USD 500,000,000 (as
increased by [up to]4 an aggregate principal amount of USD 75,000,000 [if and to the extent that]5[pursuant to the exercise by]6 the Initial Purchasers (as defined herein) [exercise]7[of]8 their over-allotment option to
purchase additional Convertible Notes pursuant to the Purchase Agreement (as defined herein)) pursuant to an Indenture to be dated January 14, 2015 between Counterparty and Wells Fargo Bank, National Association, as trustee (the
“Indenture”). In the event of any inconsistency between the terms defined in the Offering Memorandum, the Indenture and this Confirmation, this Confirmation shall govern. The parties acknowledge that this Confirmation is entered
into on the date hereof with the understanding that (i) definitions set forth in the Indenture that are also defined herein by reference to the Indenture and (ii) sections of the Indenture that are referred to herein will conform to the
descriptions thereof in the Offering Memorandum. If any such definitions in the Indenture or any such sections of the Indenture differ from the descriptions thereof in the Offering Memorandum, the descriptions thereof in the Offering Memorandum will
govern for purposes of this Confirmation. The parties further acknowledge that the Indenture section numbers used herein are based on the draft of the Indenture last reviewed by Dealer as of the date of this Confirmation, and if any such section
numbers are changed
| 1 |
Included in the Base Call Option Confirmation. |
| 2 |
Included in the Additional Call Option Confirmation. |
| 3 |
Included in the Deutsche Bank AG, London Branch Call Option Confirmations. |
| 4 |
Included in the Base Call Option Confirmation. |
| 5 |
Included in the Base Call Option Confirmation. |
| 6 |
Included in the Additional Call Option Confirmation. |
| 7 |
Included in the Base Call Option Confirmation. |
| 8 |
Included in the Additional Call Option Confirmation. |
in the Indenture as executed, the parties will amend this Confirmation in good faith to preserve the intent of the parties. Subject to the foregoing, references to the Indenture herein are
references to the Indenture as in effect on the date of its execution, and if the Indenture is amended or supplemented following such date (other than any amendment or supplement (x) pursuant to Section 10.01(j) of the Indenture that, as
reasonably determined by the Calculation Agent, conforms the Indenture to the description of Convertible Notes in the Offering Memorandum or (y) pursuant to Section 10.01(i) of the Indenture, subject, in the case of this clause (y), to the
second paragraph under “Method of Adjustment” in Section 3), any such amendment or supplement will be disregarded for purposes of this Confirmation unless the parties agree otherwise in writing.
Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in,
substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
| 1. |
This Confirmation evidences a complete and binding agreement between Dealer and Counterparty as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement, form a part of, and
be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “Agreement”) as if Dealer and Counterparty had executed an agreement in such form on the date hereof, but without any Schedule except for:
|
| |
(a) |
the election of the laws of the State of New York as the governing law (without reference to choice of law doctrine)); |
| |
(b) |
(i) the election that the “Cross Default” provisions of Section 5(a)(vi) of the Agreement shall apply to Dealer with a “Threshold Amount” of three percent of the shareholders’ equity of
[DEALER PARENT] (“Parent”); provided that “Specified Indebtedness” shall not include obligations in respect of deposits received in the ordinary course of Dealer’s or Parent’s banking
business, (ii) the phrase “or becoming capable at such time of being declared” shall be deleted from clause (1) of such Section 5(a)(vi), and (iii) the following language shall be added to the end thereof:
“Notwithstanding the foregoing, a default under subsection (2) hereof shall not constitute an Event of Default if (x) the default was caused solely by error or omission of an administrative or operational nature; (y) funds were
available to enable the party to make the payment when due; and (z) the payment is made within two Local Business Days of such party’s receipt of written notice of its failure to pay.”; |
| |
(c) |
Following the payment of the Premium, the condition precedent in Section 2(a)(iii)(1) of the Agreement with respect to Events of Default or Potential Event of Default (other than an Event of Default arising under
Section 5(a)(ii) or 5(a)(iv) of the Agreement) does not apply to a payment or delivery owing by Dealer to Counterparty. |
In the event
of any inconsistency between provisions of the Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no transaction other than the
Transaction to which this Confirmation relates shall be governed by the Agreement. If there exists any ISDA Master Agreement between Dealer and Counterparty or any confirmation or other agreement between Dealer and Counterparty pursuant to which an
ISDA Master Agreement is deemed to exist between Dealer and Counterparty, then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to which Dealer and Counterparty are
parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such existing or deemed ISDA Master Agreement.
2
| 2. |
The terms of the particular Transaction to which this Confirmation relates are as follows: |
General Terms.
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Trade Date: |
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January [8]9[9]10, 2015 |
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Effective Date: |
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The closing date of the [initial issuance of the]11 Convertible Notes [issued pursuant to the option to purchase additional Convertible Notes exercised on the date
hereof]12 |
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Option Style: |
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“Modified American”, as described under “Procedures for Exercise” below |
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Option Type: |
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Call |
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Buyer: |
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Counterparty |
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Seller: |
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Dealer |
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Shares: |
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The common stock of Counterparty, par value USD 0.001 per share (Exchange symbol “BRCD”). |
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Number of Options: |
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[500,000]13[75,000]14. For the avoidance of doubt, the Number of Options shall be reduced by any Options exercised by
Counterparty. In no event will the Number of Options be less than zero. |
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Applicable Percentage: |
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[•]% |
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Option Entitlement: |
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A number equal to the product of the Applicable Percentage and 62.7746. |
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Strike Price: |
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USD 15.93 |
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Premium: |
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USD [•] |
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Premium Payment Date: |
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January 14, 2015 |
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Exchange: |
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The NASDAQ Global Select Market |
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Related Exchange(s): |
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All Exchanges |
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Excluded Provisions: |
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Section 14.04(h) and Section 14.03 of the Indenture. |
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| Procedures for Exercise. |
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Conversion Date: |
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Subject in all respects to Section 9(h)(ii), with respect to any conversion of a Convertible Note, the date on which the Holder (as such term is defined in the Indenture) of such Convertible Note satisfies all of the
requirements for conversion thereof as set forth in Section 14.02(b) of the Indenture, excluding any such Convertible Note (i) with respect to which Counterparty has elected the “Exchange in Lieu of Conversion” option pursuant to
Section 14.13 of the Indenture, and (ii) that have been accepted by the designated financial institution pursuant to Section 14.13 of the Indenture, except to the extent that Counterparty notifies Dealer, by the applicable deadline
set forth under “Notice of Exercise” below, that (x) such financial |
| 9 |
Included in the Base Call Option Confirmation. |
| 10 |
Included in the Additional Call Option Confirmation. |
| 11 |
Included in the Base Call Option Confirmation. |
| 12 |
Included in the Additional Call Option Confirmation. |
| 13 |
Included in the Base Call Option Confirmation. |
| 14 |
Included in the Additional Call Option Confirmation. |
3
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institution has failed to pay or deliver, as the case may be, any consideration due upon conversion of such Convertible Note, or (y) such Convertible Note is subsequently resubmitted to Counterparty for conversion in accordance with
the terms of the Indenture. |
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Free Convertibility Date: |
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September 1, 2019 |
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Expiration Time: |
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The Valuation Time |
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Expiration Date: |
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January 1, 2020, subject to earlier exercise. |
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Multiple Exercise: |
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Applicable, as described under “Automatic Exercise” below. |
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Automatic Exercise: |
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Notwithstanding Section 3.4 of the Equity Definitions and subject to Section 9(h)(ii), on each Conversion Date, a number of Options equal to [(i)] the number of Convertible Notes in denominations of USD 1,000 as to which such
Conversion Date has occurred [minus (ii) the number of Options that are or are deemed to be automatically exercised on such Conversion Date under the Base Call Option Transaction Confirmation letter agreement dated January 8, 2015 between
Dealer and Counterparty (the “Base Call Option Confirmation”),]15 shall be deemed to be automatically exercised; provided that such Options shall be exercised or deemed
exercised only if Counterparty has provided a Notice of Exercise to Dealer in accordance with “Notice of Exercise” below. |
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Notwithstanding the foregoing, in no event shall the number of Options that are exercised or deemed exercised hereunder exceed the Number of Options. |
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Notice of Exercise: |
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Notwithstanding anything to the contrary in the Equity Definitions or under “Automatic Exercise” above (but subject to Section 9(h)(ii)), in order to exercise any Options on any Conversion Date, Counterparty must
notify Dealer in writing before 5:00 p.m. (New York City time) on the Scheduled Valid Day immediately preceding the scheduled first day of the Settlement Averaging Period for the Options being exercised of (i) the number of such Options,
(ii) the scheduled first day of the Settlement Averaging Period and the scheduled Settlement Date, (iii) the Relevant Settlement Method for such Options, and (iv) if the settlement method for the related Convertible Notes is not
Settlement in Shares or Settlement in Cash (each as defined below), the fixed amount of cash per Convertible Note that Counterparty has elected to deliver to Holders (as such term is defined in the Indenture) of the related Convertible Notes (the
“Specified Cash Amount”); provided that in respect of any Options relating to Convertible Notes with a Conversion Date occurring on or after the Free Convertibility Date, (A) such notice may be given on or |
| 15 |
Included for Additional Call Option Confirmation only. |
4
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prior to the second Scheduled Valid Day immediately preceding the Expiration Date and need only specify the information required in clause (i) above, and (B) if the Relevant Settlement Method for such Options is (x) Cash Settlement
or (y) Combination Settlement, Dealer shall have received a separate notice (the “Notice of Final Settlement Method”) in respect of all such Convertible Notes before 5:00 p.m. (New York City time) on the Free Convertibility
Date specifying the information required in clauses (iii) and (iv) above; provided further that, if Counterparty fails to timely provide such notice, it shall be deemed to have provided a Notice of Final Settlement Method indicating that the
Relevant Settlement Method is Net Share Settlement and that the settlement method for the related Convertible Notes is a combination of cash and shares with a Specified Cash Amount of USD 1,000. Counterparty acknowledges its responsibilities under
applicable securities laws, and in particular Section 9 and Section 10(b) of the Exchange Act (as defined below) and the rules and regulations thereunder, in respect of any election of a settlement method with respect to the Convertible
Notes. |
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Notwithstanding the foregoing, such notice (and the related exercise of Options) shall be effective if given after the applicable deadline specified above (the “Exercise Notice Deadline”), but (x) in the
case of any Options relating to Convertible Notes (A) with respect to which Counterparty has elected the “Exchange in Lieu of Conversion” option pursuant to Section 14.13 of the Indenture in respect of a Conversion Date occurring
prior to the Free Convertibility Date, and (B) that have been accepted by the designated financial institution pursuant to Section 14.13 of the Indenture, then promptly following the time Counterparty first knows, or reasonably should
know, of the occurrence of an event or condition with respect to such designated financial institution that would give rise to Counterparty’s obligation to pay or deliver, as the case may be, the relevant conversion consideration for such
Convertible Notes pursuant to the third sentence of the second paragraph of Section 14.13 of the Indenture (in which case the Settlement Averaging Period shall be determined as if the Conversion Date occurred on the third “Scheduled
Trading Day” (as defined in the Indenture) immediately following the date Dealer receives such notice), or (y) otherwise, prior to 4:00 PM, New York City time, on the fifth Exchange Business Day following the applicable Exercise Notice
Deadline, and in either of the cases described in clause (x) or (y) of this sentence, the Calculation Agent shall have the right to adjust the Delivery Obligation as appropriate to reflect the additional costs (including, but not limited
to, hedging mismatches and market losses) and expenses incurred by Dealer in connection with its hedging activities (including the unwinding of any hedge position) as a result of Dealer not having received such notice on or prior to the applicable
Exercise Notice Deadline. |
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Valuation Time: |
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At the close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable
discretion. |
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Market Disruption Event: |
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Section 6.3(a) of the Equity Definitions is hereby replaced in its entirety by the following: |
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“‘Market Disruption Event’ means, in respect of a Share, (i) a failure by the primary United States national or regional securities exchange or market on which the Shares are listed or admitted for trading to
open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m. (New York City time) on any Scheduled Valid Day for the Shares 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 Shares or in any options contracts or futures contracts relating to the
Shares.” |
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| Settlement Terms. |
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Settlement Method: |
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For any Option, Net Share Settlement; provided that if the Relevant Settlement Method set forth below for such Option is not Net Share Settlement, then the Settlement Method for such Option shall be such Relevant Settlement
Method, but only if Counterparty shall have notified Dealer of the Relevant Settlement Method in the Notice of Exercise or Notice of Final Settlement Method, as applicable, for such Option. |
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Relevant Settlement Method: |
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In respect of any Option: |
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(i) if Counterparty has elected to settle its conversion obligations in respect of the related Convertible Note (A) entirely in Shares pursuant to Section 14.02(a)(iv)(A) of the Indenture (together with cash in lieu of fractional
Shares) (such settlement method, “Settlement in Shares”), (B) in a combination of cash and Shares pursuant to Section 14.02(a)(iv)(C) of the Indenture with a Specified Cash Amount less than USD 1,000 (such settlement method,
“Low Cash Combination Settlement”) or (C) in a combination of cash and Shares pursuant to Section 14.02(a)(iv)(C) of the Indenture with a Specified Cash Amount equal to USD 1,000, then, in each case, the Relevant Settlement
Method for such Option shall be Net Share Settlement; |
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(ii) if Counterparty has elected to settle its conversion obligations in respect of the related Convertible Note in a combination of cash and Shares pursuant to Section 14.02(a)(iv)(C) of the Indenture with a Specified Cash Amount
greater than USD 1,000, then the Relevant Settlement Method for such Option shall be Combination Settlement; and |
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(iii) if Counterparty has elected to settle its conversion obligations in respect of the related Convertible Note entirely in cash pursuant to Section 14.02(a)(iv)(B) of the Indenture (such settlement method, “Settlement in
Cash”), then the Relevant Settlement Method for such Option shall be Cash Settlement. |
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Net Share Settlement: |
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If Net Share Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will deliver to Counterparty, on the relevant Settlement Date for each such Option, a number of Shares (the “Net Share
Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for each such Option, of (i) (a) the Daily Option Value for such Valid Day, divided by (b) the Relevant Price on such Valid Day,
divided by (ii) the number of Valid Days in the Settlement Averaging Period; provided that in no event shall the Net Share Settlement Amount for any Option exceed a number of Shares equal to the Applicable Limit for such Option
divided by the Applicable Limit Price on the Settlement Date for such Option. |
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Dealer will pay cash in lieu of delivering any fractional Shares to be delivered with respect to any Net Share Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging Period. |
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Combination Settlement: |
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If Combination Settlement is applicable to any Option exercised or deemed exercised hereunder, Dealer will pay or deliver, as the case may be, to Counterparty, on the relevant Settlement Date for each such Option: |
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(i) cash (the “Combination Settlement Cash Amount”) equal to the sum, for each Valid Day
during the Settlement Averaging Period for such Option, of (A) an amount (the “Daily Combination Settlement Cash Amount”) equal to the lesser of (1) the product of (x) the Applicable Percentage and (y) the Specified Cash Amount
minus USD 1,000 and (2) the Daily Option Value, divided by (B) the number of Valid Days in the Settlement Averaging Period; provided that if the calculation in clause (A) above results in zero or a negative number for any Valid
Day, the Daily Combination Settlement Cash Amount for such Valid Day shall be deemed to be zero; and |
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(ii) Shares (the “Combination Settlement Share Amount”) equal to the sum, for each Valid Day
during the Settlement Averaging Period for such Option, of a number of Shares for such Valid Day (the “Daily Combination Settlement Share Amount”) equal to (A) (1) the Daily Option Value on such Valid Day minus the Daily
Combination |
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Settlement Cash Amount for such Valid Day, divided by (2) the Relevant Price on such Valid Day, divided by (B) the number of Valid Days in the
Settlement Averaging Period; provided that if the calculation in sub-clause (A)(1) above results in zero or a negative number for any Valid Day, the Daily Combination Settlement Share Amount for such Valid Day shall be deemed to be
zero; |
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provided that in no event shall the sum of (x) the Combination Settlement Cash Amount for any Option and (y) the Combination Settlement Share Amount for such Option multiplied by the Applicable Limit Price on the
Settlement Date for such Option, exceed the Applicable Limit for such Option. If any reduction is made to the delivery obligation hereunder as a result of the foregoing, such reduction shall first be made to any Combination Settlement Share
Amount. |
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Dealer will pay cash in lieu of delivering any fractional Shares to be delivered with respect to any Combination Settlement Share Amount valued at the Relevant Price for the last Valid Day of the Settlement Averaging
Period. |
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Cash Settlement: |
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If Cash Settlement is applicable to any Option exercised or deemed exercised hereunder, in lieu of Section 8.1 of the Equity Definitions, Dealer will pay to Counterparty, on the relevant Settlement Date for each such Option, an
amount of cash (the “Cash Settlement Amount”) equal to the sum, for each Valid Day during the Settlement Averaging Period for such Option, of (i) the Daily Option Value for such Valid Day, divided by (ii) the
number of Valid Days in the Settlement Averaging Period; provided that in no event shall the Cash Settlement Amount exceed the Applicable Limit for such Option. |
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Daily Option Value: |
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For any Valid Day, an amount equal to (i) the Option Entitlement on such Valid Day, multiplied by (ii) the Relevant Price on such Valid Day less the Strike Price on such Valid Day; provided that if the
calculation contained in clause (ii) above results in a negative number, the Daily Option Value for such Valid Day shall be deemed to be zero. In no event will the Daily Option Value be less than zero. |
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Make-Whole Adjustment: |
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Notwithstanding anything to the contrary herein, in respect of any exercise of Options relating to a conversion of Convertible Notes for which additional Shares will be added to the “Conversion Rate” (as defined in the
Indenture) as determined pursuant to Section 14.03 of the Indenture, the Daily Option Value shall be calculated as if the Option Entitlement included the Applicable Percentage of the number of such additional Shares as determined with reference to
the adjustment set forth in such Section 14.03 of the Indenture; provided that if the sum of (i) the product of (a) the number of Shares (if any) deliverable by Dealer to Counterparty per
exercised |
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Option and (b) the Applicable Limit Price on the Settlement Date and (ii) the amount of cash (if any) payable by Dealer to Counterparty per exercised Option would otherwise exceed the amount per Option, as determined by the
Calculation Agent, that would be payable by Dealer under Section 6 of the Agreement if (x) the relevant Conversion Date were an Early Termination Date resulting from an Additional Termination Event with respect to which the Transaction was the sole
Affected Transaction and Counterparty was the sole Affected Party and (y) Section 14.03 of the Indenture were deleted, then each Daily Option Value shall be proportionately reduced to the extent necessary to eliminate such excess. |
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Applicable Limit: |
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For any Option, an amount of cash equal to the Applicable Percentage multiplied by the excess of (i) the aggregate of (A) the amount of cash, if any, paid to the Holder of the related Convertible Note upon
conversion of such Convertible Note and (B) the number of Shares, if any, delivered to the Holder of the related Convertible Note upon conversion of such Convertible Note multiplied by the Applicable Limit Price on the Settlement Date
for such Option, over (ii) USD 1,000. |
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Applicable Limit Price: |
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On any day, the opening price as displayed under the heading “Op” on Bloomberg page BRCD <equity> (or any successor thereto). |
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Valid Day: |
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A day on which (i) there is no Market Disruption Event and (ii) trading in the Shares generally occurs on the Exchange or, if the Shares are not then listed on the Exchange, on the principal other United States national or regional
securities exchange on which the Shares are then listed or, if the Shares are not then listed on a United States national or regional securities exchange, on the principal other market on which the Shares are then listed or admitted for trading. If
the Shares are not so listed or admitted for trading, “Valid Day” means a Business Day. |
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Scheduled Valid Day: |
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A day that is scheduled to be a Valid Day on the principal United States national or regional securities exchange or market on which the Shares are listed or admitted for trading. If the Shares are not so listed or admitted for
trading, “Scheduled Valid Day” means a Business Day. |
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Business Day: |
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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. |
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Relevant Price: |
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On any Valid Day, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page BRCD <equity> AQR (or any successor thereto) in respect of the period from the scheduled
opening time of the Exchange to the Scheduled Closing Time of the Exchange on such Valid Day (or if such volume-weighted average price is unavailable at |
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such time, the market value of one Share on such Valid Day, as determined in good faith and in a commercially reasonable manner by the Calculation Agent using, if practicable, a volume-weighted average method). The Relevant Price
will be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours. |
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Settlement Averaging Period: |
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For any Option and regardless of the Settlement Method applicable to such Option: |
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(i) if the related Conversion Date occurs prior to the Free Convertibility Date, the 30 consecutive Valid
Days commencing on, and including, the second Valid Day following such Conversion Date; provided that if the Notice of Exercise for such Option specifies that Settlement in Shares or Low Cash Combination Settlement applies to the related
Convertible Note, the Settlement Averaging Period shall be the 60 consecutive Valid Day period commencing on, and including, the second Valid Day immediately following such Conversion Date; or |
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(ii) if the related Conversion Date occurs on or following the Free Convertibility Date, the 30 consecutive
Valid Days commencing on, and including, the 32nd Scheduled Valid Day immediately prior to the Expiration Date; provided that if the Notice of Exercise or Notice of Final Settlement Method, as applicable, for such Option specifies that
Settlement in Shares or Low Cash Combination Settlement applies to the related Convertible Note, the Settlement Averaging Period shall be the 60 consecutive Valid Days commencing on, and including, the 62nd Scheduled Valid Day immediately prior to
the Expiration Date. |
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Settlement Date: |
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For any Option, the third Business Day immediately following the final Valid Day of the Settlement Averaging Period for such Option. |
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Settlement Currency: |
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USD |
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Other Applicable Provisions: |
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The provisions of Sections 9.1(c), 9.8, 9.9 and 9.11 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-settled” shall be read as references to “Share
Settled”. “Share Settled” in relation to any Option means that Net Share Settlement or Combination Settlement is applicable to that Option. |
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Representation and Agreement: |
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Notwithstanding anything to the contrary in the Equity Definitions (including, but not limited to, Section 9.11 thereof), the parties acknowledge that (i) any Shares delivered to Counterparty shall be, upon delivery, subject to
restrictions and limitations arising from Counterparty’s |
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status as issuer of the Shares under applicable securities laws, (ii) Dealer may deliver any Shares required to be delivered hereunder in certificated form in lieu of delivery through the Clearance System and (iii) any Shares
delivered to Counterparty may be “restricted securities” (as defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”)). |
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| 3. Additional Terms applicable to the Transaction. |
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Adjustments applicable to the Transaction: |
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Potential Adjustment Events: |
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Notwithstanding Section 11.2(e) of the Equity Definitions, a “Potential Adjustment Event” means an occurrence of any event or condition, as set forth in any Dilution Adjustment Provision, that would result in an
adjustment under the Indenture to the “Conversion Rate” or the composition of a “unit of Reference Property” or to any “Last Reported Sale Price” , “Daily VWAP,” “Daily Conversion Value” or
“Daily Settlement Amount” (each as defined in the Indenture). For the avoidance of doubt, Dealer shall not have any delivery or payment obligation hereunder, and no adjustment shall be made to the terms of the Transaction, on account of
(x) any distribution of cash, property or securities by Counterparty to holders of the Convertible Notes (upon conversion or otherwise) or (y) any other transaction in which holders of the Convertible Notes are entitled to participate, in
each case, in lieu of an adjustment under the Indenture of the type referred to in the immediately preceding sentence (including, without limitation, pursuant to the fourth sentence of Section 14.04(c) of the Indenture or the fifth sentence of
Section 14.04(d) of the Indenture). |
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Method of Adjustment: |
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Calculation Agent Adjustment, which means that, notwithstanding Section 11.2(c) of the Equity Definitions (and for the avoidance of doubt, in lieu of any adjustments pursuant to such Section), upon any Potential Adjustment Event,
the Calculation Agent shall make an adjustment corresponding to the adjustment to be made pursuant to the Indenture in respect of the Convertible Notes to any one or more of the Strike Price, Number of Options, Option Entitlement and any other
variable relevant to the exercise, settlement or payment for the Transaction as determined by reference to the Dilution Adjustment Provisions to the extent an adjustment is required under the Indenture. |
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Notwithstanding the foregoing and “Consequences of Merger Events / Tender Offers” below, if the Calculation Agent acting in good faith and in a commercially reasonable manner disagrees with any adjustment to the
Convertible Notes that involves an exercise of discretion by Counterparty or its board of directors (including, without limitation, pursuant to Section 14.05 of the Indenture, Section 14.07 of the Indenture or any supplemental indenture entered into
pursuant to Section |
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10.01(i) or in connection with any proportional adjustment or the determination of the fair value of any securities, property, rights or other assets), then in each such case, the Calculation Agent will determine the adjustment to
be made to any one or more of the Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction in a commercially reasonable manner; provided, further, that,
notwithstanding the foregoing, if any Potential Adjustment Event occurs during the Settlement Averaging Period but no adjustment was made to any Convertible Note under the Indenture because the relevant Holder (as such term is defined in the
Indenture) was deemed to be a record owner of the underlying Shares on the related Conversion Date, then the Calculation Agent shall make an adjustment, consistent with the methodology set forth in the Indenture, to the terms hereof in order to
account for such Potential Adjustment Event. |
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Dilution Adjustment Provisions: |
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Sections 14.04(a), (b), (c), (d) and (e), Section 14.05 and Section 14.11 of the Indenture. |
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| Extraordinary Events applicable to the Transaction: |
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Merger Events: |
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Applicable; provided that notwithstanding Section 12.1(b) of the Equity Definitions (which provisions shall not apply), a “Merger Event” means the occurrence of any event or condition set forth in the
definition of “Merger Event” in Section 14.07(a) of the Indenture. |
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Tender Offers: |
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Applicable; provided that notwithstanding Section 12.1(d) of the Equity Definitions, a “Tender Offer” means the occurrence of any event or condition set forth in Section 14.04(e) of the Indenture. |
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Consequences of Merger Events / Tender
Offers: |
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Notwithstanding Section 12.2 and Section 12.3 of the Equity Definitions, upon the occurrence of a Merger Event or a Tender Offer, the Calculation Agent shall make an adjustment corresponding to the adjustment required to be made
under the Indenture to any one or more of the nature of the Shares (in the case of a Merger Event), Strike Price, Number of Options, Option Entitlement and any other variable relevant to the exercise, settlement or payment for the Transaction (as
determined by the Calculation Agent acting in good faith and in a commercially reasonable manner by reference to the relevant provisions of the Indenture), subject to the second paragraph under “Method of Adjustment”; provided,
however, that such adjustment shall be made without regard to any adjustment to the Conversion Rate pursuant to any Excluded Provision; provided further that if, with respect to a Merger Event or a Tender Offer, (i) the consideration for
the Shares includes (or, at the option |
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of a holder of Shares, may include) shares of an entity or person that is not a corporation or is not organized under the laws of the United States, any State thereof or the District of Columbia or (ii) the Counterparty to the
Transaction following such Merger Event or Tender Offer will not be a corporation, then, in either case, Cancellation and Payment (Calculation Agent Determination) may apply at Dealer’s sole election. |
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Nationalization, Insolvency or Delisting: |
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Cancellation and Payment (Calculation Agent Determination); provided that, in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Exchange is located in the
United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately
re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the
Exchange. |
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| Additional Disruption Events: |
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Change in Law: |
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Applicable; provided that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the word “Shares” with the phrase “Hedge Positions” in clause (X) thereof and
(ii) inserting the parenthetical “(including, for the avoidance of doubt and without limitation, adoption or promulgation of new regulations authorized or mandated by existing statute)” at the end of clause (A) thereof. |
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Failure to Deliver: |
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Applicable |
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Hedging Disruption: |
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Applicable; provided that: |
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(i) Section 12.9(a)(v) of the Equity Definitions is hereby amended by (a) inserting the following words at
the end of clause (A) thereof: “in the manner contemplated by the Hedging Party on the Trade Date” and (b) inserting the following two phrases at the end of such Section: |
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“For the avoidance of doubt, the term “equity price risk” shall be
deemed to include, but shall not be limited to, stock price and volatility risk. And, for the further avoidance of doubt, any such transactions or assets referred to in phrases (A) or (B) above must be available on commercially reasonable
pricing terms.”; and |
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(ii) Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in the third line thereof,
after the words “to terminate the Transaction”, the words “or a portion of the Transaction affected by such Hedging Disruption”. |
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Increased Cost of Hedging: |
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Applicable |
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Hedging Party: |
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For all applicable Additional Disruption Events, Dealer. |
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Determining Party: |
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For all applicable Extraordinary Events, Dealer. |
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Non-Reliance: |
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Applicable |
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Agreements and Acknowledgments Regarding
Hedging Activities: |
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Applicable |
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Additional Acknowledgments: |
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Applicable |
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| 4. |
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Calculation Agent. |
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Dealer; provided that, following the occurrence and during the continuance of an Event of Default of the type described in Section 5(a)(vii) of the Agreement with respect to which Dealer is the sole Defaulting Party,
Counterparty shall have the right to designate a nationally recognized independent equity derivatives dealer to replace Dealer as the Calculation Agent, and the parties shall work in good faith to execute any appropriate documentation required by
such replacement Calculation Agent. |
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Following any adjustment, determination or calculation by the Calculation Agent or Determining Party hereunder, upon a written request by Counterparty (which may be by email), the Calculation Agent or Determining Party, as the case
may be, will promptly (but in any event within three Exchange Business Days) provide to Counterparty by email to the email address provided by Counterparty in such written request a report (in a commonly used file format for the storage and
manipulation of financial data) displaying in reasonable detail the basis for such adjustment, determination or calculation (including any assumptions used in making such adjustment, determination or calculation), it being understood that in no
event will Dealer be obligated to share with Counterparty any proprietary or confidential data or information or any proprietary or confidential models used by it in making such adjustment, determination or calculation. |
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All calculations and determinations by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. |
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(a) |
Account for payments to Counterparty: |
To Be Provided.
Account for delivery of Shares to Counterparty:
To Be Provided.
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(b) |
Account for payments to Dealer: |
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| Bank:
ABA#: Acct No.:
Beneficiary: |
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[•] [•]
[•] [•] |
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Account for delivery of Shares from Dealer:
To Be Provided.
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(a) |
The Office of Counterparty for the Transaction is: Inapplicable, Counterparty is not a Multibranch Party. |
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(b) |
The Office of Dealer for the Transaction is: [•] |
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(a) |
Address for notices or communications to Counterparty: |
Brocade Communications Systems, Inc.
130 Holger Way
San Jose, CA
95134-1376
Attention: Vice President and Treasurer
Telephone No.: 408-333-8000
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(b) |
Address for notices or communications to Dealer: |
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| Address:
Attention: Telephone
No.: Facsimile No.:
With a copy to:
Telephone:
Facsimile: |
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[•] [•]
[•] [•]
[•]
[•] [•] |
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| 8. |
Representations and Warranties. |
| I. |
Representations and Warranties of Counterparty. As of the date hereof, Counterparty hereby represents and warrants to Dealer that each of the representations and warranties of Counterparty set forth in
Section 1 of the Purchase Agreement (the “Purchase Agreement”), dated as of January 8, 2015, among Counterparty, Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
representatives of the several Initial Purchasers party thereto (the “Initial Purchasers”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein. Counterparty hereby further represents and
warrants to Dealer on the date hereof and on and as of the Premium Payment Date that: |
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(a) |
Counterparty has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all
necessary corporate action on Counterparty’s part; and this Confirmation has been duly and validly executed and delivered by Counterparty and constitutes its valid and binding obligation, enforceable against Counterparty in accordance with its
terms, 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) and except that rights to indemnification and contribution hereunder may be limited by
federal or state securities laws or public policy relating thereto. |
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(b) |
Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Counterparty hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Counterparty, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument
filed as an exhibit to Counterparty’s Annual Report on Form 10-K for the year ended November 1, 2014 to which Counterparty or any of its subsidiaries is a party (excluding any employment or management contracts or compensatory plan,
contracts or arrangements filed or incorporated by reference in accordance with Item 601(b)(10)(iii) of Regulation S-K under the Securities Act), or constitute a default under, or result in the creation of any lien under, any such agreement or
instrument. |
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(c) |
To the knowledge of Counterparty, no consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by
Counterparty of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act or state securities laws. |
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(d) |
Counterparty is not and, after consummation of the transactions contemplated hereby, will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940,
as amended. |
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(e) |
Each of it and its affiliates is not, on the date hereof, aware of any material non-public information with respect to Counterparty or the Shares. |
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(f) |
Counterparty (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (B) will exercise
independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total assets of at least $50 million. |
| II. |
Representations, Warranties and Covenants of Counterparty and Dealer. Counterparty and Dealer hereby represent and warrant to Dealer and Counterparty, respectively, on the date hereof and on and as of the
Premium Payment Date that: |
| (a) |
Each is an “eligible contract participant” (as such term is defined in Section 1a(18) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under
Section 1a(18)(C) of the Commodity Exchange Act). |
| (b) |
Each of Dealer and Counterparty acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act, by virtue of Section 4(a)(2) thereof. Accordingly,
Counterparty represents and warrants to Dealer that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in
respect of the Transaction, which it understands are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the
Transaction, (ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account and without a view to the
distribution or resale thereof, (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state
securities laws, and (v) its financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or
indebtedness and is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction. |
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(a) |
Opinions. Counterparty shall deliver to Dealer an opinion of counsel, dated as of the Premium Payment Date, with respect to the matters set forth in Sections 8(a) through (c) of this Confirmation in
substantially the form as agreed between Dealer and Counterparty (it being agreed that such opinion of counsel may contain customary exceptions and qualifications, including, without limitation, exceptions and qualifications relating to
indemnification provisions). Delivery of such opinion to Dealer shall be a condition precedent for the purpose of Section 2(a)(iii) of the Agreement with respect to each obligation of Dealer under Section 2(a)(i) of the Agreement.
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(b) |
Repurchase Notices. Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, promptly give Dealer a
written notice of such repurchase (a “Repurchase Notice”) on such day if following such repurchase, the number of outstanding Shares as determined on such day is (i) less than 347.0 million (in the case of the first such
notice) or (ii) thereafter more than 56.0 million less than the number of Shares included in the immediately preceding Repurchase Notice; provided that Counterparty may provide Dealer advance notice on or prior to any such day to
the extent it expects that repurchases effected on such day may result in an obligation to deliver a Repurchase Notice (which advance notice shall be deemed a Repurchase Notice). The parties agree that Counterparty’s obligation to provide any
Repurchase Notice relating to a repurchase of Shares shall be satisfied by notice to Dealer of Counterparty’s related corporate authorization to repurchase such Shares; provided that, Counterparty acknowledges and agrees that Dealer may,
but is not required to, assume that the maximum number of Shares permitted to be repurchased pursuant to such authorization will be repurchased on the date on which such authorization becomes effective, subject to adjustments thereto as Dealer
determines appropriate to account for the market price with respect to the Shares, Potential Adjustment Events and other corporate transactions with respect to Counterparty or the Shares and such other factors as Dealer determines relevant.
Counterparty acknowledges and agrees that in connection with any notice delivered pursuant to the two immediately preceding sentences, Counterparty shall not communicate to Dealer any material non-public information with respect to Counterparty or
the Shares. Counterparty agrees to indemnify and hold harmless Dealer and its affiliates and their respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from
and against any and all losses (including losses relating to Dealer’s hedging activities as a consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging
activities or cessation of hedging activities and any losses in connection therewith with respect to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, which an
Indemnified Person may become subject to, as a result of Counterparty’s failure to timely provide Dealer with a Repurchase Notice in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such
Indemnified Persons for any reasonable and documented out-of-pocket legal or other expenses incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any
suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against the Indemnified Person as a result of Counterparty’s failure to provide Dealer with a Repurchase Notice in
accordance with this paragraph, such Indemnified Person shall promptly notify Counterparty in writing, and Counterparty, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others Counterparty may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Counterparty shall not be liable for any settlement of any proceeding contemplated by
this paragraph that is effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Counterparty agrees to indemnify any Indemnified Person from and against any loss or liability by reason
of such settlement or judgment. Counterparty shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated by this paragraph in respect of which any Indemnified
Person is a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an |
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unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the
indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then Counterparty hereunder, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities. The remedies provided for in this paragraph (b) are not exclusive and shall not
limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements contained in this paragraph shall remain operative and in full force and effect regardless of the
termination of the Transaction. |
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(c) |
Regulation M. Counterparty is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), of any securities of Counterparty, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Counterparty shall not, until the second Scheduled Trading Day
immediately following the Effective Date, engage in any such distribution. |
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(d) |
No Manipulation. Counterparty is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise
or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. |
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(e) |
Transfer or Assignment. |
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(i) |
Counterparty shall have the right to transfer or assign its rights and obligations hereunder with respect to all, but not less than all, of the Options hereunder (such Options, the “Transfer Options”);
provided that such transfer or assignment shall be subject to reasonable conditions that Dealer may impose, including but not limited, to the following conditions: |
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(A) |
With respect to any Transfer Options, Counterparty shall not be released from its notice and indemnification obligations pursuant to Section 9(b) or any obligations under Section 9(m) or 9(r) of this
Confirmation; |
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(B) |
Any Transfer Options shall only be transferred or assigned to a third party that is a United States person (as defined in the Internal Revenue Code of 1986, as amended); |
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(C) |
Such transfer or assignment shall be effected on terms, including any reasonable undertakings by such third party (including, but not limited to, an undertaking with respect to compliance with applicable securities laws
in a manner that, in the reasonable judgment of Dealer, will not expose Dealer to material risks under applicable securities laws) and execution of any documentation and delivery of legal opinions with respect to securities laws and other matters by
such third party and Counterparty, as are requested and reasonably satisfactory to Dealer; |
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(D) |
Dealer will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Dealer would have
been required to pay to Counterparty in the absence of such transfer and assignment, determined based on information known as of the date of such transfer and assignment; |
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(E) |
An Event of Default, Potential Event of Default or Termination Event will not occur as a result of such transfer and assignment; |
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(F) |
Without limiting the generality of clause (B), Counterparty shall cause the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Dealer to permit
Dealer to determine that results described in clauses (D) and (E) will not occur upon or after such transfer and assignment; and |
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(G) |
Counterparty shall be responsible for all commercially reasonable costs and expenses, including commercially reasonable counsel fees, incurred by Dealer in connection with such transfer or assignment. |
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(ii) |
Dealer may, without Counterparty’s consent, transfer or assign all or any part of its rights or obligations under the Transaction (A) to any affiliate of Dealer (1) that has a long-term issuer rating that
is equal to or better than Dealer’s credit rating at the time of such transfer or assignment, or (2) whose obligations hereunder will be fully and unconditionally guaranteed, pursuant to the terms of a customary guarantee in a form used by
Dealer generally for similar transactions, by Dealer or [•]16, or (B) to any other third party with a long-term issuer rating equal to or better than the lesser of (1) the credit
rating of Dealer at the time of the transfer and (2) A- by Standard and Poor’s Rating Group, Inc. or its successor (“S&P”), or A3 by Moody’s Investor Service, Inc. (“Moody’s”) or, if either
S&P or Moody’s ceases to rate such debt, at least an equivalent rating or better by a substitute rating agency mutually agreed by Counterparty and Dealer; provided that any transfer or assignment described in clause (A) or
(B) above shall not result in a deemed exchange for Counterparty within the meaning of Section 1001 of the Internal Revenue Code of 1986, as amended (the “Code”). If at any time at which (A) the Section 16
Percentage exceeds 7.0%, (B) the Option Equity Percentage exceeds 14.0%, or (C) the Share Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess
Ownership Position”), Dealer is unable after using its commercially reasonable efforts to effect a transfer or assignment of Options to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably
acceptable to Dealer such that no Excess Ownership Position exists, then Dealer may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that
following such partial termination no Excess Ownership Position exists. In the event that Dealer so designates an Early Termination Date with respect to a portion of the Transaction, a payment shall be made pursuant to Section 6 of the
Agreement as if (1) an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the number of Options underlying the Terminated Portion,
(2) Counterparty were the sole Affected Party with respect to such partial termination and (3) the Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(k) shall apply to
any amount that is payable by Dealer to Counterparty pursuant to this sentence as if Counterparty was not the Affected Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the
numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own
(as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and (B) the denominator of which is the number of Shares outstanding. The “Option Equity Percentage” as of any day is
the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Options and the Option Entitlement and (2) the aggregate number of Shares underlying any other call option transaction
sold by Dealer to Counterparty, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be
aggregated with that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, |
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Included applicable Parent company of Dealer. |
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regulation, regulatory order or organizational documents or contracts of Counterparty that are, in each case, applicable to ownership of Shares (“Applicable Restrictions”),
owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership under any Applicable Restriction, as determined by Dealer in its commercially reasonable discretion. The
“Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filing requirements on Form 13F, Schedule 13D or Schedule
13G under the Exchange Act, in each case, as in effect on the Trade Date) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or is reasonably likely to result in an adverse effect on a Dealer
Person, under any Applicable Restriction, as determined by Dealer in its commercially reasonable discretion, minus (B) 1.5% of the number of Shares outstanding. |
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(iii) |
Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities, or make or receive any payment in cash, to or
from Counterparty, Dealer may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or to make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the
Transaction and any such designee may assume such obligations. Dealer shall be discharged of its obligations to Counterparty to the extent of any such performance. |
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(f) |
Staggered Settlement. If upon advice of counsel with respect to applicable legal and regulatory requirements, including any requirements relating to Dealer’s hedging activities hereunder, Dealer
reasonably determines that it would not be practicable or advisable to deliver, or to acquire Shares to deliver, any or all of the Shares to be delivered by Dealer on any Settlement Date for the Transaction, Dealer may, by notice to Counterparty on
or prior to any Settlement Date (a “Nominal Settlement Date”), elect to deliver the Shares on two or more dates (each, a “Staggered Settlement Date”) as follows: |
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(i) |
in such notice, Dealer will specify to Counterparty the related Staggered Settlement Dates (each of which will be on or prior to such Nominal Settlement Date) and the number of Shares that it will deliver on each
Staggered Settlement Date; |
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(ii) |
the aggregate number of Shares that Dealer will deliver to Counterparty hereunder on all such Staggered Settlement Dates will equal the number of Shares that Dealer would otherwise be required to deliver on such Nominal
Settlement Date; and |
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(iii) |
if the Net Share Settlement terms or the Combination Settlement terms set forth above were to apply on the Nominal Settlement Date, then the Net Share Settlement terms or the Combination Settlement terms, as the case
may be, will apply on each Staggered Settlement Date, except that the Shares otherwise deliverable on such Nominal Settlement Date will be allocated among such Staggered Settlement Dates as specified by Dealer in the notice referred to in clause
(i) above. |
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(g) |
Dividends. If at any time during the period from and including the Effective Date, to but excluding the Expiration Date, (i) an ex-dividend date for a regular quarterly cash dividend occurs with
respect to the Shares (an “Ex-Dividend Date”), and that dividend is less than the Regular Dividend on a per Share basis or (ii) if no Ex-Dividend Date for a regular quarterly cash dividend occurs with respect to the Shares in
any quarterly dividend period of Counterparty, then the Calculation Agent will make a corresponding adjustment to any one or more of the Strike Price, Number of Options, Option Entitlement and/or any other variable relevant to the exercise,
settlement or payment for the Transaction to preserve the fair value of the Options to Dealer after taking into account such dividend or lack thereof. “Regular Dividend” shall mean USD 0.035 per Share per quarter. Upon any
adjustment to the Initial Dividend Threshold (as defined in the Indenture) for the Convertible Notes pursuant to the Indenture, the Calculation Agent will make a corresponding adjustment to the Regular Dividend for the Transaction.
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(h) |
Additional Termination Event. |
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(i) |
Notwithstanding anything to the contrary in this Confirmation if an event of default with respect to Counterparty occurs under the terms of the Convertible Notes as set forth in Section 6.01 of the Indenture and
such event of default results in the Convertible Notes becoming or being declared due and payable pursuant to the Indenture, then such event of default shall constitute an Additional Termination Event applicable to the Transaction and, with respect
to such Additional Termination Event, (A) Counterparty shall be deemed to be the sole Affected Party, (B) the Transaction shall be the sole Affected Transaction and (C) Dealer shall be the party entitled to designate an Early
Termination Date pursuant to Section 6(b) of the Agreement (which Early Termination Date shall be on or as promptly as reasonably practicable after Dealer becomes aware of the occurrence of such acceleration). |
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(ii) |
Promptly (but in any event within five Scheduled Trading Days) following any Repurchase Event (as defined below), Counterparty may notify Dealer of such Repurchase Event and the aggregate principal amount of Convertible
Notes subject to such Repurchase Event (any such notice, a “Convertible Notes Repurchase Notice”); provided that any such Convertible Notes Repurchase Notice shall contain an acknowledgment by Counterparty of its
responsibilities under applicable securities laws, and in particular Section 9 and Section 10(b) of the Exchange Act and the rules and regulations thereunder, in respect of such Repurchase Event and the delivery of such Convertible Notes
Repurchase Notice. The receipt by Dealer from Counterparty of any Convertible Notes Repurchase Notice shall constitute an Additional Termination Event as provided in this Section 9(h)(ii). Upon receipt of any such Convertible Notes Repurchase
Notice, Dealer shall designate an Exchange Business Day following receipt of such Convertible Notes Repurchase Notice (which Exchange Business Day shall be on or as promptly as reasonably practicable after the related settlement date for the
relevant Repurchase Event) as an Early Termination Date with respect to the portion of the Transaction corresponding to a number of Options (the “Repurchase Options”) equal the lesser of (A) (x) the aggregate principal
amount of such Convertible Notes specified in such Convertible Notes Repurchase Notice, divided by USD 1,000[, minus (y) the number of Repurchase Options (as defined in the Base Call Option Confirmation), if any, that relate to
such Convertible Notes]17, and (B) the Number of Options as of the date Dealer designates such Early Termination Date and, as of such date, the Number of Options shall be reduced by the
number of Repurchase Options. Any payment hereunder with respect to such termination (the “Repurchase Unwind Payment”) shall be calculated pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been
designated in respect of a Transaction having terms identical to the Transaction and a Number of Options equal to the number of Repurchase Options, (2) Counterparty were the sole Affected Party with respect to such Additional Termination Event
and (3) the terminated portion of the Transaction were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(k) shall apply to any amount that is payable by Dealer to Counterparty pursuant to this
Section 9(h)(ii) as if Counterparty was not the Affected Party). “Repurchase Event” means that (i) any Convertible Notes are repurchased (whether pursuant to Section 15.02 of the Indenture or otherwise) by
Counterparty or any of its subsidiaries, (ii) any Convertible Notes are delivered to Counterparty in exchange for delivery of any property or assets of Counterparty or any of its subsidiaries (howsoever described), (iii) any principal of
any of the Convertible Notes is repaid prior to the final maturity date of the Convertible Notes (other than upon acceleration of the Convertible Notes described in Section 9(h)(i)), or (iv) any Convertible Notes are exchanged by or for
the benefit of the Holders (as defined in the |
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Included in Additional Call Option Confirmation. |
21
Indenture) thereof for any other securities of Counterparty or any of its Affiliates (or any other property, or any combination thereof) pursuant to any exchange offer or similar transaction;
provided that any conversion of Convertible Notes pursuant to the terms of the Indenture shall not constitute a Repurchase Event. For the avoidance of doubt, in determining the amount payable in respect of such Affected Transaction pursuant
to Section 6 of the Agreement, the Calculation Agent shall assume (1) the relevant Repurchase Event and any conversions, adjustments, agreements, payments, deliveries or acquisitions by or on behalf of Counterparty leading thereto had not
occurred, (2) no adjustments to the Conversion Rate have occurred pursuant to any Excluded Provision and (3) the corresponding Convertible Notes remain outstanding.
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(i) |
Amendments to Equity Definitions. |
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(i) |
Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the fourth line thereof the word “or” after the word “official” and inserting a comma therefor, and
(2) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or (C) the occurrence of any of the events specified in Section 5(a)(vii)(1) through (9) of the ISDA Master
Agreement with respect to that Issuer.” |
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(ii) |
Section 12.9(b)(i) of the Equity Definitions is hereby amended by (1) replacing “either party may elect” with “Dealer may elect” and (2) replacing “notice to the other party”
with “notice to Counterparty” in the first sentence of such section. |
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(j) |
Setoff. Each party waives any and all rights it may have to set off obligations arising under the Agreement and the Transaction against other obligations between the parties, whether arising under any
other agreement, applicable law or otherwise. |
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(k) |
Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. If (a) an Early Termination Date (whether as a result of an Event of Default or a Termination Event)
occurs or is designated with respect to the Transaction or (b) the Transaction is cancelled or terminated upon the occurrence of an Extraordinary Event (except as a result of (i) a Nationalization, Insolvency or Merger Event in which the
consideration to be paid to holders of Shares consists solely of cash, (ii) a Merger Event or Tender Offer that is within Counterparty’s control, or (iii) an Event of Default in which Counterparty is the Defaulting Party or a
Termination Event in which Counterparty is the Affected Party other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in
Section 5(b) of the Agreement, in each case that resulted from an event or events outside Counterparty’s control), and if Dealer would owe any amount to Counterparty pursuant to Section 6(d)(ii) of the Agreement or any Cancellation
Amount pursuant to Article 12 of the Equity Definitions (any such amount, a “Payment Obligation”), then Dealer shall satisfy the Payment Obligation by the Share Termination Alternative (as defined below), unless
(a) Counterparty gives irrevocable telephonic notice to Dealer, confirmed in writing within one Scheduled Trading Day, no later than 12:00 p.m. (New York City time) on the Merger Date, Tender Offer Date, Announcement Date (in the case of a
Nationalization, Insolvency or Delisting), Early Termination Date or date of cancellation, as applicable, of its election that the Share Termination Alternative shall not apply, (b) Counterparty remakes the representation set forth in
Section 8(I)(e) as of the date of such election and (c) Dealer agrees, in its sole discretion, to such election, in which case the provisions of Section 12.7 or Section 12.9 of the Equity Definitions, or the provisions of
Section 6(d)(ii) and Section 6(e) of the Agreement, as the case may be, shall apply. |
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Share Termination Alternative: |
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If applicable, Dealer shall deliver to Counterparty the Share Termination Delivery Property on, or within a commercially reasonable period of time after, the date when the relevant Payment Obligation would otherwise be due pursuant
to Sections 12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) and 6(e) of the Agreement, as applicable, in satisfaction of such Payment Obligation in the manner reasonably requested by Counterparty free of
payment. |
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Share Termination Delivery Property: |
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A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the Share Termination Delivery
Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price. |
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Share Termination Unit Price: |
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The value to Dealer of property contained in one Share Termination Delivery Unit, as determined by the Calculation Agent in its discretion by commercially reasonable means and notified by the Calculation Agent to Dealer at the time
of notification of the Payment Obligation. For the avoidance of doubt, the parties agree that in determining the Share Termination Unit Price the Calculation Agent may consider the purchase price paid in connection with the purchase of Share
Termination Delivery Property to the extent doing so results in a commercially reasonable Share Termination Unit Price. |
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Share Termination Delivery Unit: |
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One Share or, if the Shares have changed into cash or any other property or the right to receive cash or any other property as the result of a Nationalization, Insolvency or Merger Event (any such cash or other property, the
“Exchange Property”), a unit consisting of the type and amount of such Exchange Property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of
any securities) in such Nationalization, Insolvency or Merger Event, as determined by the Calculation Agent. If such Naturalization, Insolvency or Merger Event involves a choice of Exchange Property to be received by holders, such holder shall be
deemed to have elected to receive the maximum possible amount of cash. |
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Failure to Deliver: |
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Applicable |
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Other applicable provisions: |
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If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9 and 9.11 (as modified above) of the Equity Definitions and the provisions set forth opposite the caption “Representation and Agreement” in
Section 2 will be applicable, except that all references in such provisions to “Physically-settled” shall be read as references to “Share Termination Settled” and all references to “Shares” shall be read as references
to “Share Termination Delivery Units”. “Share Termination Settled” in relation to the Transaction means that the Share Termination Alternative is applicable to the Transaction. |
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(l) |
Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the
Transaction. Each party (i) certifies that no representative, agent or attorney of either party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. |
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(m) |
Registration. Counterparty hereby agrees that if, in the good faith reasonable judgment of Dealer based on the advice of counsel, the Shares (“Hedge Shares”) acquired by Dealer for the
purpose of effecting a commercially reasonable hedge of its obligations pursuant to the Transaction cannot be sold in the public market by Dealer without registration under the Securities Act, Counterparty shall, at its election, either (i) in
order to allow Dealer to sell the Hedge Shares in a registered offering, make available to Dealer an effective registration statement under the Securities Act to cover the resale of such Hedge Shares and enter into an agreement, in form and
substance satisfactory to Dealer, substantially in the form of an underwriting agreement customary for a registered secondary offering of a similar size in respect of a similar issuer; provided, however, that if Dealer, in its sole
reasonable discretion, is not satisfied with access to due diligence materials, the results of its due diligence investigation, or the procedures and documentation for the registered offering referred to above, then clause (ii) or clause
(iii) of this paragraph shall apply at the election of Counterparty, (ii) in order to allow Dealer to sell the Hedge Shares in a private placement, use commercially reasonable efforts to enter into a private placement agreement
substantially similar to private placement purchase agreements customary for private placements of equity securities of a similar size in respect of a similar issuer, in form and substance commercially reasonably satisfactory to Dealer (in which
case, the Calculation Agent shall make any adjustments to the terms of the Transaction that are necessary, in its commercially reasonable judgment, to compensate Dealer for any discount from the public market price of the Shares incurred on the sale
of Hedge Shares in a private placement), or (iii) purchase the Hedge Shares from Dealer at the Relevant Price on such Exchange Business Days, and in the amounts, requested by Dealer. |
| |
(n) |
Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Counterparty and each of its employees, representatives, or other agents may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Counterparty relating to such tax treatment and tax
structure. |
| |
(o) |
Right to Extend. Dealer may postpone or add, in whole or in part, any Valid Day or Valid Days during the Settlement Averaging Period or any other date of valuation, payment or delivery by Dealer, with
respect to some or all of the Options hereunder, if Dealer reasonably determines, in its commercially reasonable judgment and, in the case of clause (ii) below, based on advice of counsel, that such action is reasonably necessary or advisable
(i) to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in light of existing liquidity conditions in the stock loan market or other relevant market or (ii) to enable Dealer to effect purchases of
Shares in connection with its commercially reasonable hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Counterparty or an affiliated purchaser of Counterparty, be in compliance with applicable legal,
regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer (so long as such policies and procedures would generally be applicable to counterparties similar to Counterparty and transactions similar to the
Transaction); provided that no such Valid Day or other date of valuation, payment or delivery may be postponed or added more than 30 Valid Days after the original Valid Day or other date of valuation, payment or delivery, as the case may be.
|
24
| |
(p) |
Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Counterparty with respect to the Transaction that are senior to the
claims of common stockholders of Counterparty in any United States bankruptcy proceedings of Counterparty; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by
Counterparty of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the
Transaction. For the avoidance of doubt, the parties acknowledge that the obligations of Counterparty under this Confirmation are not secured by any collateral that would otherwise secure the obligations of Counterparty herein under or pursuant to
any other agreement. |
| |
(q) |
Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title
11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code,
(ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described
in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy
Code. |
| |
(r) |
Notice of Certain Other Events. Counterparty covenants and agrees that: |
| |
(i) |
promptly following the public announcement of the results of any election by the holders of Shares with respect to the consideration due upon consummation of any Merger Event, Counterparty shall give Dealer written
notice of (x) the weighted average of the types and amounts of consideration that holders of Shares have elected to receive upon consummation of such Merger Event or (y) if no holders of Shares affirmatively make such election, the types
and amounts of consideration actually received by holders of Shares (the date of such notification, the “Consideration Notification Date”); provided that in no event shall the Consideration Notification Date be later than the
date on which such Merger Event is consummated; and |
| |
(ii) |
promptly following any adjustment to the Convertible Notes in connection with any Potential Adjustment Event, Merger Event or Tender Offer, Counterparty shall give Dealer written notice of the details of such
adjustment. |
| |
(s) |
Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that
neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend
or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or
the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). |
| |
(t) |
Agreements and Acknowledgements Regarding Hedging. Counterparty understands, acknowledges and agrees that: (A) at any time on and prior to the Expiration Date, Dealer and its affiliates may buy or
sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to adjust its hedge position with respect to the Transaction; (B) Dealer and its affiliates also may be
active in the market for Shares other than in connection with hedging activities in relation to the Transaction; (C) Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in securities of
Issuer shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Relevant Prices; and (D) any market activities of Dealer and its affiliates with respect to Shares may affect
the market price and volatility of Shares, as well as the Relevant Prices, each in a manner that may be adverse to Counterparty. |
25
| |
(u) |
Early Unwind. In the event the sale of the [“Firm Notes”]18[“Optional Notes”]19
(as defined in the Purchase Agreement) is not consummated with the Initial Purchasers for any reason, or Counterparty fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), in each case by 5:00 p.m. (New York City
time) on the Premium Payment Date, or such later date as agreed upon by the parties (the Premium Payment Date or such later date, the “Early Unwind Date”), the Transaction shall automatically terminate (the “Early
Unwind”) on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Dealer and Counterparty under the Transaction shall be cancelled and terminated and (ii) each party shall be released
and discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with the Transaction either prior to
or after the Early Unwind Date. Each of Dealer and Counterparty represents and acknowledges to the other that upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. |
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(v) |
Payment by Counterparty. In the event that, following payment of the Premium, (i) an Early Termination Date occurs or is designated with respect to the Transaction as a result of a Termination Event
or an Event of Default (other than an Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Counterparty owes to Dealer an amount calculated under Section 6(e) of the Agreement, or
(ii) Counterparty owes to Dealer, pursuant to Section 12.7 or Section 12.9 of the Equity Definitions, an amount calculated under Section 12.8 of the Equity Definitions, such amount shall be deemed to be zero.
|
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(w) |
[Method of Delivery. Whenever delivery of funds or other assets is required hereunder by or to Counterparty, such delivery shall be effected through DBSI. In addition, all notices, demands and
communications of any kind relating to the Transaction between Dealer and Counterparty shall be transmitted exclusively through DBSI.]20 [Role of Agent. Each party agrees and
acknowledges that (i) J.P. Morgan Securities LLC, an affiliate of Dealer (“JPMS”), has acted solely as agent and not as principal with respect to the Transaction and (ii) JPMS has no obligation or liability, by way of
guaranty, endorsement or otherwise, in any manner in respect of the Transaction (including, if applicable, in respect of the settlement thereof). Each party agrees it will look solely to the other party (or any guarantor in respect thereof) for
performance of such other party’s obligations under the Transaction.]21 |
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(x) |
Adjustments. For the avoidance of doubt, whenever the Calculation Agent is called upon to make an adjustment pursuant to the terms of this Confirmation or the Equity Definitions to take into account the
effect of an event by reference to the effect of such event on the Hedging Party, other than an adjustment that corresponds to an adjustment pursuant to the terms of the Indenture, the Calculation Agent shall make such adjustment by reference to the
effect of such event on the Hedging Party, assuming that the Hedging Party maintains a commercially reasonable hedge position. |
(i) Withholding Tax imposed on payments to non-US
counterparties under the United States Foreign Account Tax Compliance Act. “Tax” and “Indemnifiable Tax”, each as defined in Section 14 of the Agreement, shall not include any U.S. federal withholding tax imposed or
collected pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or official interpretations thereof, any agreement entered into
pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules
| 18 |
Inserted for Base Call Option Confirmation. |
| 19 |
Inserted for Additional Call Option Confirmation. |
| 20 |
Included in the Deutsche Bank AG, London Branch Call Option Confirmations. |
| 21 |
Included in the JPMorgan Chase Bank, National Association, London Branch Call Option Confirmations.
|
26
or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (a “FATCA Withholding Tax”).
For the avoidance of doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by applicable law for the purposes of Section 2(d) of the Agreement.
(ii) HIRE Act. “Tax” and “Indemnifiable Tax”, each as defined in Section 14 of the Agreement, shall not
include any tax imposed on payments treated as dividends from sources within the United States under Section 871(m) of the Code or any regulations issued thereunder.
(iii) Tax documentation. Counterparty shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor
thereto, (i) on or before the date of execution of this Confirmation and (ii) promptly upon learning that any such tax form previously provided by Counterparty has become obsolete or incorrect. On or prior to the Trade Date and at any
other time reasonably requested by Counterparty, Dealer shall have delivered to Counterparty a properly completed, as applicable (i) Internal Revenue Service Form W-9 or Internal Revenue Service Form W-8ECI or (ii) (A) Internal
Revenue Service Form W-8IMY along with a withholding statement and (B) attached Internal Revenue Service Form W-9 or Internal Revenue Service Form W-8ECI.
| |
[(z) |
2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol. |
The parties agree that the terms of the 2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol published by ISDA
on July 19, 2013 (“Protocol”) apply to the Transaction as if the parties had adhered to the Protocol without amendment. In respect of the Attachment to the Protocol, (i) the definition of “Adherence Letter” shall
be deemed to be deleted and references to “Adherence Letter” shall be deemed to be to this Section (z) (and references to “such party’s Adherence Letter” and “its Adherence Letter” shall be read accordingly),
(ii) references to “adheres to the Protocol” shall be deemed to be “enters into this Confirmation”, (iii) references to “Protocol Covered Agreement” shall be deemed to be references to this Confirmation (and
each “Protocol Covered Agreement” shall be read accordingly), and (iv) references to “Implementation Date” shall be deemed to be references to the date of this Confirmation. For the purposes of this Section (z):
| |
(i) |
Dealer is a Portfolio Data Sending Entity and Counterparty is a Portfolio Data Receiving Entity; |
| |
(ii) |
Dealer and Counterparty may use a Third Party Service Provider, and each of Dealer and Counterparty consents to such use including the communication of the relevant data in relation to Dealer and Counterparty to such
Third Party Service Provider for the purposes of the reconciliation services provided by such entity; |
| |
(iii) |
The Local Business Days for such purposes in relation to Dealer are New York, London, Frankfurt, Tokyo and Singapore and in relation to Counterparty are San Jose, California; |
| |
(iv) |
The provisions in this paragraph shall survive the termination of this Transaction. |
| |
(v) |
The following are the applicable email addresses. |
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Portfolio Data: |
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Dealer: collateral.disputes@db.com |
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Counterparty: [•] |
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Notice of discrepancy: |
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Dealer: collateral.disputes@db.com |
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Counterparty: [•] |
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Dispute Notice: |
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Dealer: collateral.disputes@db.com |
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Counterparty: [•] |
27
| |
(aa) |
NFC Representation Protocol. |
| |
(i) |
The parties agree that the provisions set out in the Attachment to the ISDA 2013 EMIR NFC Representation Protocol published by ISDA on March 8, 2013 (the “NFC Representation Protocol”) shall apply
to the Transaction as if each party were an Adhering Party under the terms of the NFC Representation Protocol. In respect of the Attachment to the Protocol, (i) the definition of “Adherence Letter” shall be deemed to be deleted and
references to “Adherence Letter” shall be deemed to be to this Section (aa) (and references to “the relevant Adherence Letter” and “its Adherence Letter” shall be read accordingly), (ii) references to “adheres
to the Protocol” shall be deemed to be “enters into this Confirmation”, (iii) references to “Covered Master Agreement” shall be deemed to be references to the Agreement (and each “Covered Master Agreement”
shall be read accordingly), and (iv) references to “Implementation Date” shall be deemed to be references to the date of this Confirmation. |
| |
(ii) |
Counterparty confirms that it enters into this Confirmation as a party making the NFC Representation (as such term is defined in the NFC Representation Protocol). Counterparty shall promptly notify Dealer of any change
to its status as a party making the NFC Representation. |
| |
(bb) |
Transaction Reporting—Consent for Disclosure of Information. Notwithstanding anything to the contrary herein or in the Agreement or any non-disclosure, confidentiality or other agreements entered into
between the parties from time to time, each party hereby consents to the Disclosure of information (the “Reporting Consent”): |
| |
(i) |
to the extent required by, or necessary in order to comply with, any applicable law, rule or regulation which mandates Disclosure of transaction and similar information or to the extent required by, or necessary in
order to comply with, any order, request or directive regarding Disclosure of transaction and similar information issued by any relevant authority or body or agency (“Reporting Requirements”); or |
| |
(ii) |
to and between the other party’s head office, branches or affiliates; to any person, agent, third party or entity who provides services to such other party or its head office, branches or affiliates; to a Market;
or to any trade data repository or any systems or services operated by any trade repository or Market, in each case, in connection with such Reporting Requirements. |
“Disclosure” means disclosure, reporting, retention, or any action similar or analogous to any of the aforementioned.
“Market” means any exchange, regulated market, clearing house, central clearing counterparty or multilateral trading facility.
Disclosures made pursuant to this Reporting Consent may include, without limitation, Disclosure of information relating to disputes over transactions between
the parties, a party’s identity, and certain transaction and pricing data and may result in such information becoming available to the public or recipients in a jurisdiction which may have a different level of protection for personal data from
that of the relevant party’s home jurisdiction.
This Reporting Consent shall be deemed to constitute an agreement between the parties with respect
to Disclosure in general and shall survive the termination of this Transaction. No amendment to or termination of this Reporting Consent shall be effective unless such amendment or termination is made in writing between the parties and specifically
refers to this Reporting Consent.]22
| 22 |
Included in the Deutsche Bank AG, London Branch Call Option Confirmations. |
28
Counterparty hereby agrees (a) to check this Confirmation carefully and immediately upon
receipt so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Counterparty with
respect to the Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to [•].
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| Very truly yours,
[DEALER] |
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| By: |
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| Name: |
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| Title: |
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Accepted and confirmed
as
of the Trade Date:
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| BROCADE COMMUNICATIONS SYSTEMS, INC. |
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| By: |
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| Authorized Signatory |
| Name: |
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Exhibit 99.2
[DEALER INFORMATION]
January
[8]1[9]2, 2015
| To: |
Brocade Communications Systems, Inc. |
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Attention: [Title of contact] |
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Telephone No.: [Telephone No.] |
| Re: |
[Base][Additional] Warrants |
The purpose of this letter agreement (this
“Confirmation”) is to confirm the terms and conditions of the Warrants issued by Brocade Communications Systems, Inc. (“Company”) to [DEALER] (“Dealer”) as of the Trade Date specified below (the
“Transaction”). This letter agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any previous agreements and serve as the final documentation
for the Transaction.
[DEUTSCHE BANK AG, LONDON BRANCH IS NOT REGISTERED AS A BROKER DEALER UNDER THE U.S. SECURITIES
EXCHANGE ACT OF 1934. DEUTSCHE BANK SECURITIES INC. (“DBSI”) HAS ACTED SOLELY AS AGENT IN CONNECTION WITH THE TRANSACTION AND HAS NO OBLIGATION, BY WAY OF ISSUANCE, ENDORSEMENT, GUARANTEE OR OTHERWISE WITH RESPECT TO THE PERFORMANCE OF
EITHER PARTY UNDER THE TRANSACTION. AS SUCH, ALL DELIVERY OF FUNDS, ASSETS, NOTICES, DEMANDS AND COMMUNICATIONS OF ANY KIND RELATING TO THIS TRANSACTION BETWEEN DEUTSCHE BANK AG, LONDON BRANCH, AND COUNTERPARTY SHALL BE TRANSMITTED EXCLUSIVELY
THROUGH DEUTSCHE BANK SECURITIES INC. DEUTSCHE BANK AG, LONDON BRANCH IS NOT A MEMBER OF THE SECURITIES INVESTOR PROTECTION CORPORATION (SIPC).]3
The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the “Equity Definitions”),
as published by the International Swaps and Derivatives Association, Inc. (“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation
shall govern.
Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained
from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.
1. This Confirmation evidences a complete and binding agreement between Dealer and Company as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “Agreement”) as if Dealer and Company had executed an agreement in such form (but without
any Schedule except for the election of the laws of the State of New York as the governing law (without reference to choice of law doctrine)) on the Trade Date. In the event of any inconsistency between provisions of that Agreement and this
Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other than the Transaction to which this Confirmation relates shall be governed by the
Agreement.
If there exists any ISDA Master Agreement between Dealer and Company or any confirmation or other agreement between Dealer and
Company pursuant to which an ISDA Master Agreement is deemed to exist between Dealer and Company, then notwithstanding anything to the contrary in such ISDA Master Agreement, such confirmation or agreement or any other agreement to which Dealer and
Company are parties, the Transaction shall not be considered a Transaction under, or otherwise governed by, such existing or deemed ISDA Master Agreement.
| 1 |
Included in the Base Warrant Confirmation. |
| 2 |
Included in the Additional Warrant Confirmation. |
| 3 |
Included in the Deutsche Bank AG, London Branch Warrant Confirmations. |
1
2. The Transaction is a Warrant Transaction, which shall be considered a Share Option Transaction for purposes of
the Equity Definitions. The terms of the particular Transaction to which this Confirmation relates are as follows:
General
Terms.
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Trade Date: |
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January [8]4[9]5, 2015 |
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Effective Date: |
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The third Exchange Business Day immediately prior to the Premium Payment Date |
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Warrants: |
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Equity call warrants, each giving the holder the right to purchase a number of Shares equal to the Warrant Entitlement at a price per Share equal to the Strike Price, subject to the terms set forth under the caption “Settlement
Terms” below. For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option. |
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Warrant Style: |
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European |
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Seller: |
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Company |
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Buyer: |
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Dealer |
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Shares: |
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The common stock of Company, par value USD 0.001 per share (Exchange symbol “BRCD”) |
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Number of Warrants: |
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[•]6. For the avoidance of doubt, the Number of Warrants shall be reduced by any Warrants exercised or deemed exercised hereunder. In no event will the Number of Warrants be
less than zero. |
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Warrant Entitlement: |
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One Share per Warrant |
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Strike Price: |
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USD 20.65. |
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Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity Definitions, in no event shall the Strike Price be subject to adjustment to the extent that, after giving effect to such adjustment, the
Strike Price would be less than USD [•]7, except for any adjustment pursuant to the terms of this Confirmation and the Equity Definitions in connection with stock splits or similar changes to
Company’s capitalization. |
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Premium: |
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USD [•] |
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Premium Payment Date: |
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January 14, 2015 |
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Exchange: |
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The NASDAQ Global Select Market |
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Related Exchange(s): |
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All Exchanges |
| 4 |
Included in the Base Warrant Confirmation. |
| 5 |
Included in the Additional Warrant Confirmation. |
| 6 |
This is equal to (i) the number of Convertible Notes initially issued on the closing date for the Convertible Notes (or, for the Additional Warrant Confirmation, the number of additional Convertible Notes),
multiplied by (ii) the initial Conversion Rate, multiplied by (iii) the applicable percentage for Dealer (if applicable). |
| 7 |
$11.80 for the Base Warrants, and $11.98 for the Additional Warrants. |
2
Procedures for Exercise.
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Expiration Time: |
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The Valuation Time |
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Expiration Dates: |
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Each Scheduled Trading Day during the period from, and including, the First Expiration Date to, but excluding, the 60th Scheduled Trading Day following the First Expiration Date
shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding anything to the contrary in the Equity Definitions, if any such date is a Disrupted Day, the
Calculation Agent (i) may make reasonable adjustments in good faith and in a commercially reasonable manner, if applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an
Expiration Date and shall designate a Scheduled Trading Day or a number of Scheduled Trading Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date and (ii) if the
Daily Number of Warrants for such Disrupted Day is not reduced to zero, determine the Settlement Price for such Disrupted Day based on transactions in the Shares on such Disrupted Day taking into account the nature and duration of such Market
Disruption Event on such day; and provided further that if such Expiration Date has not occurred pursuant to this clause as of the eighth Scheduled Trading Day following the last scheduled Expiration Date under the Transaction, the
Calculation Agent shall have the right to declare such Scheduled Trading Day to be the final Expiration Date and, notwithstanding anything to the contrary in this Confirmation or the Equity Definitions, the Settlement Price for such Expiration Date
shall be the prevailing market value per Share as determined by the Calculation Agent in good faith and in a commercially reasonable manner. |
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First Expiration Date: |
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April 1, 2020 (or if such day is not a Scheduled Trading Day, the next following Scheduled Trading Day), subject to Market Disruption Event below. |
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Daily Number of Warrants: |
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For any Expiration Date, the Number of Warrants that have not expired or been exercised as of such day, divided by the remaining number of Expiration Dates (including such day), rounded down to the nearest whole number,
subject to adjustment pursuant to the provisos to “Expiration Dates”. |
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Automatic Exercise: |
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Applicable; and means that for each Expiration Date, a number of Warrants equal to the Daily Number of Warrants for such Expiration Date will be deemed to be automatically exercised at the Expiration Time on such Expiration
Date. |
3
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Market Disruption Event: |
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Section 6.3(a) of the Equity Definitions is hereby amended by replacing clauses (ii) and (iii) in their entirety with “(ii) an Exchange Disruption, (iii) an Early Closure, or (iv) a Regulatory Disruption, in each case, that the
Calculation Agent determines in its commercially reasonable discretion is material.” |
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Section 6.3(d) of the Equity Definitions is hereby amended by deleting the remainder of the provision following the words “Scheduled Closing Time” in the fourth line thereof. |
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Regulatory Disruption: |
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Any event that Dealer, in its commercially reasonable judgment based on advice of counsel, determines makes it advisable with regard to any legal, regulatory or self-regulatory requirements or related policies and procedures
applicable to Dealer and the Transaction (provided that such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer in good faith in relation to such requirements), for Dealer to refrain from or decrease
any market activity in connection with the Transaction. Dealer shall notify Company as soon as reasonably practicable that a Regulatory Disruption has occurred and the Expiration Dates affected by it. |
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Valuation Terms. |
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Valuation Time: |
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Scheduled Closing Time; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its commercially reasonable discretion. |
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Valuation Date: |
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Each Exercise Date. |
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Settlement Terms. |
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Settlement Method Election: |
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Applicable; provided that (i) references to “Physical Settlement” in Section 7.1 of the Equity Definitions shall be replaced by references to “Net Share Settlement”; (ii) Company may elect
Cash Settlement only if Company represents and warrants to Dealer in writing on the date of such election that (A) Company is not in possession of any material non-public information regarding Company or the Shares, (B) Company is electing
Cash Settlement in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws, and (C) the assets of Company at their fair valuation exceed the liabilities of Company (including contingent liabilities),
the capital of Company is adequate to conduct the business of Company, and Company has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay
as such debts mature; and (iii) the same election of settlement method shall apply to all Expiration Dates hereunder. |
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Electing Party: |
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Company |
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Settlement Method Election Date: |
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The third Scheduled Trading Day immediately preceding the First Expiration Date. |
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Default Settlement Method: |
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Net Share Settlement |
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Net Share Settlement: |
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If Net Share Settlement is applicable, then on the relevant Settlement Date, Company shall deliver to Dealer a number of Shares equal to the Share Delivery Quantity for such Settlement Date to the account specified herein free of
payment through the Clearance System, and Dealer shall be treated as the holder of record of such Shares at the time of delivery of such Shares or, if earlier, at 5:00 p.m. (New York City time) on such Settlement Date, and Company shall pay to
Dealer cash in lieu of any fractional Share valued at the Settlement Price on the relevant Valuation Date. |
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Share Delivery Quantity: |
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For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date for such Settlement
Date. |
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Net Share Settlement Amount: |
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For any Settlement Date, an amount equal to the product of (i) the number of Warrants exercised or deemed exercised on the relevant Exercise Date, (ii) the Strike Price Differential for the relevant Valuation Date and (iii) the
Warrant Entitlement. |
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Settlement Price: |
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For any Valuation Date, the per Share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page BRCD <equity> AQR (or any successor thereto) in respect of the period from the
scheduled opening time of the Exchange to the Scheduled Closing Time on such Valuation Date (or if such volume-weighted average price is unavailable or manifestly incorrect, the market value of one Share on such Valuation Date, as determined by the
Calculation Agent in good faith and in a commercially reasonable manner based on generally available market data for transactions of this type using, if practicable, a volume weighted methodology). |
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Settlement Dates: |
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As determined pursuant to Section 9.4 of the Equity Definitions, subject to Section 9(j)(i) hereof; provided that Section 9.4 of the Equity Definitions is hereby amended by (i) inserting the words “or cash”
immediately following the word “Shares” in the first line thereof and (ii) inserting the words “for the Shares” immediately following the words “Settlement Cycle” in the second line thereof. |
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Other Applicable Provisions: |
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If Net Share Settlement is applicable, the provisions of Sections 9.1(c), 9.8, 9.9, 9.11 and 9.12 of the Equity Definitions will be applicable as if Physical Settlement applied to the Transaction. |
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Representation and Agreement: |
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Notwithstanding Section 9.11 of the Equity Definitions, the parties acknowledge that any Shares delivered to Dealer in the event of Net Share Settlement may be, upon delivery, subject to restrictions and limitations arising from
Company’s status as issuer of the Shares under applicable securities laws. |
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Cash Settlement: |
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If Cash Settlement is applicable, on the relevant Settlement Date, Company shall pay to Dealer an amount of cash in USD equal to the Net Share Settlement Amount for such Settlement Date. |
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| 3. |
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Additional Terms applicable to the Transaction. |
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Adjustments applicable to the Transaction: |
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Method of Adjustment: |
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Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may make adjustments, if any, to any one or more of the Strike Price, the Number of Warrants,
the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, (a) any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed by Section 9(f) of this Confirmation in lieu of Article
10 or Section 11.2(c) of the Equity Definitions and (b) none of the following shall constitute Potential Adjustment Events: (i) open market Share repurchases at prevailing market prices, (ii) repurchases of shares from directors, officers and
employees in connection with the exercise of options or tax withholding obligations, (iii) the termination or settlement by the Issuer of any call options, forward purchases or accelerate share purchases agreements with respect to the Shares, (iv)
repurchases, conversions or other settlement of the Company’s 1.375% Convertible Senior Notes due 2020, (v) underwritten public offerings by the Issuer of its securities, and (vi) Share repurchases through a dealer pursuant to accelerated share
repurchases, forward contracts or similar transactions (including without limitation any discount to average VWAP prices) that are entered into at prevailing market prices and in accordance with customary market terms for transactions of such type
to repurchase the Shares, in each case, for an aggregate purchase price that, taken together with the aggregate purchase price for all other such repurchases under this clause (vi) (other than any call options purchased on the date hereof or within
18 days of the date hereof, in each case, from Dealer or any other financial institution to whom warrants with terms substantially identical to the Transaction are being issued), does not exceed 15% of the market capitalization of the Issuer
(measured at the time of execution of the applicable transaction). |
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Extraordinary Events applicable to the Transaction: |
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New Shares: |
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Section 12.1(i) of the Equity Definitions is hereby amended (a) by deleting the text in clause (i) thereof in its entirety (including the word “and” following clause (i)) and replacing it with the phrase “publicly
quoted, traded or listed (or whose related depositary receipts are publicly quoted, traded or listed) on any of the New York Stock |
6
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Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors)” and (b) by inserting immediately prior to the period the phrase “and (iii) of an entity or person that is a
corporation organized under the laws of the United States, any State thereof or the District of Columbia that also becomes Company under the Transaction following such Merger Event or Tender Offer”. |
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Consequence of Merger Events: |
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Merger Event: |
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Applicable; provided that if an event occurs that constitutes both a Merger Event under Section 12.1(b) of the Equity Definitions and an Additional Termination Event under Section 9(g)(ii)(B) of this Confirmation, the
provisions of Section 9(g)(ii)(B) will apply. |
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Share-for-Share: |
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Modified Calculation Agent Adjustment |
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Share-for-Other: |
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Cancellation and Payment (Calculation Agent Determination) |
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Share-for-Combined: |
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Cancellation and Payment (Calculation Agent Determination); provided that Dealer may elect, in its commercially reasonable judgment, Component Adjustment (Calculation Agent Determination) for all or any portion of the
Transaction. |
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Consequence of Tender Offers: |
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Tender Offer: |
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Applicable; provided that Section 12.1(d) of the Equity Definitions is hereby amended by replacing “10%” with “20%”. If an event occurs that constitutes both a Tender Offer under Section 12.1(d)
of the Equity Definitions and Additional Termination Event under Section 9(g)(ii)(A) of this Confirmation, the provisions of Section 9(g)(ii)(A) will apply. |
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Share-for-Share: |
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Modified Calculation Agent Adjustment |
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Share-for-Other: |
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Modified Calculation Agent Adjustment |
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Share-for-Combined: |
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Modified Calculation Agent Adjustment |
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Consequences of Announcement Events: |
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Modified Calculation Agent Adjustment as set forth in Section 12.3(d)
of the Equity Definitions; provided that in respect of an Announcement Event, (i) references to “Tender Offer” shall be replaced by references to “Announcement Event” and references to “Tender Offer Date” shall
be replaced by references to “date of such Announcement Event”, (ii) the Calculation Agent shall determine whether the relevant Announcement Event has had a material economic effect on the Transaction (and, only if so, adjust the terms of
the Transaction accordingly to account for such economic effect) on one or more occasions on or after the date of the Announcement Event up to, and including, the Expiration Date, any Early |
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Termination Date and/or any other date of cancellation, (iii) any adjustment in respect of a particular Announcement Event shall take into account any earlier adjustment relating to the same Announcement Event and (iv) if the
Calculation Agent shall make any adjustment to the terms of a Warrant upon the occurrence of a particular Announcement Event, then the Calculation Agent shall make an adjustment to the terms of that same Warrant upon any subsequent announcement,
prior to the final Expiration Date (or any earlier date of termination or cancellation), of the abandonment of any such transaction or event that gave rise to the original Announcement Event. |
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An Announcement Event shall be an “Extraordinary Event” for purposes of the Equity Definitions, to which Article 12 of the Equity Definitions is applicable. |
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Announcement Event: |
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(i) The public announcement by the Issuer of (x) any transaction or event that, if completed, would constitute a Merger Event or Tender Offer, or (y) the intention to enter into a Merger Event or Tender Offer, (ii) the public
announcement by Issuer of an intention to solicit or enter into, or to explore strategic alternatives or other similar undertaking that may include, a Merger Event or Tender Offer or (iii) any subsequent public announcement by the Issuer of a change
to a transaction or intention that is the subject of an announcement of the type described in clause (i) or (ii) of this sentence (including, without limitation, a new announcement, whether or not by the same party, relating to such a transaction or
intention or the announcement of a withdrawal from, or the abandonment or discontinuation of, such a transaction or intention), as determined by the Calculation Agent. For the avoidance of doubt, the occurrence of an Announcement Event with respect
to any transaction or intention shall not preclude the occurrence of a later Announcement Event with respect to such transaction or intention. For purposes of this definition of “Announcement Event,” the remainder of the definition of
“Merger Event” in Section 12.1(b) of the Equity Definitions following the definition of “Reverse Merger” therein shall be disregarded. |
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Modified Calculation Agent Adjustment: |
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If, in respect of any Merger Event to which Modified Calculation Agent Adjustment applies, the adjustments to be made in accordance with Section 12.2(e)(i) of the Equity Definitions would result in Company being different from the
issuer of the Shares, then with respect to such Merger Event, as a condition precedent to the adjustments contemplated in Section 12.2(e)(i) of the Equity Definitions, Dealer, the Issuer of the Affected Shares and the entity that will be the Issuer
of the New Shares shall, prior to the Merger Date, have entered into such documentation containing representations, warranties and agreements relating to securities law and other issues as requested by Dealer that Dealer has |
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determined, in its reasonable judgment, based on advice of counsel, to be reasonably necessary or appropriate to allow Dealer to continue as a party to the Transaction, as adjusted under Section 12.2(e)(i) of the Equity Definitions,
and to preserve its commercially reasonable hedging or hedge unwind activities in connection with the Transaction in a manner compliant with applicable legal, regulatory or self-regulatory requirements, or with related policies and procedures
applicable to Dealer and the Transaction (whether or not such requirements, policies or procedures are imposed by law or have been voluntarily adopted by Dealer in good faith in relation to such requirements), and if such conditions are not met or
if the Calculation Agent determines that no adjustment that it could make under Section 12.2(e)(i) of the Equity Definitions will produce a commercially reasonable result, then the consequences set forth in Section 12.2(e)(ii) of the Equity
Definitions shall apply. |
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Notwithstanding anything to the contrary herein, any adjustment to the terms of the Transaction, and the determination of any amounts due upon cancellation or termination of the Warrants as a result of a Merger Event, Tender Offer
or Announcement Event shall take into account, and shall not duplicate the economic effects of, any other adjustment or termination or cancellation valuation hereunder (including, without limitation, any termination or cancellation pursuant to
Section 9(g)(ii) below). |
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Nationalization, Insolvency or Delisting: |
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Cancellation and Payment (Calculation Agent Determination); provided that, in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it will also constitute a Delisting if the Exchange is located in the
United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately
re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors), such exchange or quotation system shall thereafter be deemed to be the
Exchange. |
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Additional Disruption Events: |
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Change in Law: |
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Applicable; provided that (i) Section 12.9(a)(ii) of the Equity Definitions is hereby amended by replacing the parenthetical beginning after the word “regulation” in the second line thereof with the words
“(including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute)” at the end of clause (A) thereof,
(ii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by replacing the word “Shares” with the phrase “Hedge Positions” and (iii) Section 12.9(a)(ii)(X) of the Equity Definitions is hereby amended by
immediately following the word “Transaction”, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date”. |
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Failure to Deliver: |
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Not Applicable |
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Insolvency Filing: |
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Applicable |
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Hedging Disruption: |
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Applicable; provided that: |
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(i) |
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Section 12.9(a)(v) of the Equity Definitions is hereby amended by (a) inserting the following words at the end of clause (A) thereof: “in the manner contemplated by the Hedging Party on the Trade Date” and
(b) inserting the following two phrases at the end of such Section: |
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“For the avoidance of doubt, the term “equity price risk” shall be deemed to include, but shall not be limited to, stock price and volatility risk. And, for the further avoidance of doubt, any such transactions or
assets referred to in phrases (A) or (B) above must be available on commercially reasonable pricing terms.”; and |
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(ii) |
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Section 12.9(b)(iii) of the Equity Definitions is hereby amended by inserting in the third line thereof, after the words “to terminate the Transaction”, the words “or a portion of the Transaction affected by such
Hedging Disruption”. |
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Increased Cost of Hedging: |
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Applicable; provided that the following parenthetical shall be inserted immediately following the word “expense” in the third line of Section 12.9(a)(vi) of the Equity Definitions: “(including, for
the avoidance of doubt, the incurrence of any stock borrow expense in excess of Hedging Party’s expectation as of the Trade Date, other than to the extent resulting in an Increased Cost of Stock Borrow)”. |
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Loss of Stock Borrow: |
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Applicable |
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Maximum Stock Loan Rate: |
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200 basis points |
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Increased Cost of Stock Borrow: |
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Applicable |
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Initial Stock Loan Rate: |
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25 basis points |
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Hedging Party: |
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For all applicable Additional Disruption Events, Dealer; provided that, when making any determination or calculation as “Hedging Party,” Dealer shall be bound by the same obligations relating to required
acts of the Calculation Agent as set forth in Section 1.40 of the Equity Definitions and this Confirmation as if the Hedging Party were the Calculation Agent. |
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Determining Party: |
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For all applicable Extraordinary Events, Dealer. |
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Non-Reliance: |
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Applicable |
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Agreements and Acknowledgments Regarding Hedging Activities: |
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Applicable |
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Additional Acknowledgments: |
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Applicable |
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| 4. |
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Calculation Agent. |
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Dealer; provided that following the occurrence of an Event of Default of the type described in Section 5(a)(vii) of the Agreement with respect to which Dealer is the sole Defaulting Party, Company shall have the
right to designate a nationally recognized independent equity derivatives dealer to replace Dealer as the Calculation Agent, and the parties shall work in good faith to execute any appropriate documentation required by such replacement Calculation
Agent. |
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Following any adjustment, determination or calculation by the Calculation Agent or Determining Party hereunder, upon written request by Company (which may be by email), the Calculation Agent or Determining Party, as the
case may be, will promptly (but in any event within three Exchange Business Days) provide to Company by email to the email address provided by Company in such written request a report (in a commonly used file format for the storage and manipulation
of financial data) displaying in reasonable detail the basis for such adjustment, determination or calculation (including any assumptions used in making such adjustment, determination or calculation), it being agreed understood that in no event will
Dealer be obligated to share with Company any proprietary or confidential data or information or any proprietary or confidential models used by it in making such adjustments, determination or calculation. |
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All calculations and determinations by the Calculation Agent shall be made in good faith and in a commercially reasonable manner. |
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(a) |
Account for payments to Company: |
To Be Provided.
Account for delivery of Shares from Company:
To Be Provided.
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(b) |
Account for payments to Dealer: |
Bank:
[•]
ABA#: [•]
Acct No.: [•]
Beneficiary: [•]
Account
for delivery of Shares to Dealer:
[•]
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(a) |
The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party. |
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(b) |
The Office of Dealer for the Transaction is: [•] |
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(a) |
Address for notices or communications to Company: |
Brocade Communications Systems, Inc.
130 Holger Way
San Jose, CA
95134-1376
Attention: Vice President and Treasurer
Telephone No.: 408-333-8000
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(b) |
Address for notices or communications to Dealer: |
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| Address:
Attention: Telephone
No.: Facsimile No.:
With a copy to:
Telephone:
Facsimile: |
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[•] [•]
[•] [•]
[•]
[•] [•] |
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| 8. |
Representations and Warranties of Company and Dealer. |
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(a) |
As of the date hereof, Company hereby represents and warrants to Dealer that each of the representations and warranties of Company set forth in Section 1 of the Purchase Agreement (the “Purchase
Agreement”), dated as of January 8, 2015, among Company, Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representatives of the several Initial Purchasers party thereto (the
“Initial Purchasers”), is true and correct and is hereby deemed to be repeated to Dealer as if set forth herein as of the date hereof. Company hereby further represents and warrants to Dealer on the date hereof, on and as of the
Premium Payment Date and, in the case of the representations in Section 8(a)(iv), at all times until termination of the Transaction, that: |
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(i) |
Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary
corporate action on Company’s part; and this Confirmation has been duly and validly executed and delivered by Company and constitutes its valid and binding obligation, enforceable against Company in accordance with its terms, 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) and except that rights to indemnification and contribution hereunder may be limited by federal or state
securities laws or public policy relating thereto. |
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(ii) |
Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument filed
as an exhibit to Company’s Annual Report on Form 10-K for the year ended November 1, 2014, as updated by any subsequent filings, to which Company or any of its subsidiaries is a party (excluding any employment or management contracts or
compensatory plan, contracts or arrangements filed or incorporated by reference in accordance with Item 601(b)(10)(iii) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities Act”)), or constitute a default
under, or result in the creation of any lien under, any such agreement or instrument. |
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(iii) |
To the Company’s knowledge, no consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by
Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act or state securities laws. |
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(iv) |
A number of Shares equal to the Maximum Number of Shares (as defined below) (the “Warrant Shares”) have been reserved for issuance by all required corporate action of Company. The Warrant Shares have
been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms of the Warrants following the exercise of the Warrants in accordance with the terms
and conditions of the Warrants, will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant Shares will not be subject to any preemptive or similar rights. |
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(v) |
Company is not and, after consummation of the transactions contemplated hereby, will not be required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as
amended. |
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(vi) |
Company is an “eligible contract participant” (as such term is defined in Section 1a(18) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under
Section 1a(18)(C) of the Commodity Exchange Act). |
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(vii) |
Company and each of its affiliates is not, on the date hereof, aware of any material non-public information with respect to Company or the Shares. |
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(viii) |
Company (A) is capable of evaluating investment risks independently, both in general and with regard to all transactions and investment strategies involving a security or securities; (B) will exercise
independent judgment in evaluating the recommendations of any broker-dealer or its associated persons, unless it has otherwise notified the broker-dealer in writing; and (C) has total assets of at least $50 million. |
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(b) |
Company and Dealer hereby represent and warrant to Dealer and Company, respectively, on the date hereof and on and as of the Premium Payment Date that: |
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(i) |
Each is an “eligible contract participant” (as such term is defined in Section 1a(18) of the Commodity Exchange Act, as amended, other than a person that is an eligible contract participant under
Section 1a(18)(C) of the Commodity Exchange Act). |
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(ii) |
Each of Dealer and Company acknowledges that the offer and sale of the Transaction to it is intended to be exempt from registration under the Securities Act, by virtue of Section 4(a)(2) thereof. Accordingly,
Dealer represents and warrants to Company that (i) it has the financial ability to bear the economic risk of its investment in the Transaction and is able to bear a total loss of its investment and its investments in and liabilities in respect
of the Transaction, which it understands are not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection with the Transaction, including the loss of its entire investment in the Transaction,
(ii) it is an “accredited investor” as that term is defined in Regulation D as promulgated under the Securities Act, (iii) it is entering into the Transaction for its own account and without a view to the distribution or resale
thereof, (iv) the assignment, transfer or other disposition of the Transaction has not been and will not be registered under the Securities Act and is restricted under this Confirmation, the Securities Act and state securities laws, and
(v) its financial condition is such that it has no need for liquidity with respect to its investment in the Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness and is
capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction. |
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(a) |
Opinions. Company shall deliver to Dealer an opinion of counsel, dated as of the Premium Payment Date, in substantially the form as agreed between Dealer and Company with respect to the matters set forth
in Sections 8(a)(i) through 8(a)(iv) (it being agreed that such opinion may contain customary exceptions and qualifications, including without limitation, exceptions and qualifications relating to indemnification provisions). Delivery of such
opinion to Dealer shall be a condition precedent for the purpose of Section 2(a)(iii) of the Agreement with respect to each obligation of Dealer under Section 2(a)(i) of the Agreement. |
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(b) |
Repurchase Notices. Company shall, on any day on which Company effects any repurchase of Shares, promptly give Dealer a written notice of such repurchase (a “Repurchase Notice”) on such day if
following such repurchase, the number of outstanding Shares on such day, subject to any adjustments provided herein, is (i) less than 347.0 million (in the case of the first such notice) or (ii) thereafter more than 56.0 million
less than the number of Shares included in the immediately preceding Repurchase Notice; provided that Company may provide Dealer advance notice on or prior to any such day to the extent it expects that repurchases effected on such day may
result in an obligation to deliver a Repurchase Notice (which advance notice shall be deemed a Repurchase Notice). The parties agree that Company’s obligation to provide any Repurchase Notice relating to a repurchase of Shares shall be
satisfied by notice to Dealer of Company’s related corporate authorization to repurchase such Shares; provided that, Company acknowledges and agrees that Dealer may, but is not required to, assume that the maximum number of Shares
permitted to be repurchased pursuant to such authorization will be repurchased on the date on which such authorization becomes effective, subject to adjustments thereto as Dealer determines appropriate to account for the market price with respect to
the Shares, Potential Adjustment Events and other corporate transactions with respect to Company or the Shares and such other factors as Dealer determines relevant. Company acknowledges and agrees that in connection with any notice delivered
pursuant to the two immediately preceding sentences, Company shall not communicate to Dealer any material non-public information with respect to Company or the Shares. Company agrees to indemnify and hold harmless Dealer and its affiliates and their
respective officers, directors, employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any and all losses (including losses relating to Dealer’s hedging activities as a
consequence of becoming, or of the risk of becoming, a Section 16 “insider”, including without limitation, any forbearance from hedging activities or cessation of hedging activities and any losses in connection therewith with respect
to the Transaction), claims, damages, judgments, liabilities and expenses (including reasonable attorney’s fees), joint or several, which an Indemnified Person actually may become subject to, as a result of Company’s failure to timely
provide Dealer with a Repurchase Notice in the manner specified in this paragraph, and to reimburse, within 30 days, upon written request, each of such Indemnified Persons for any reasonable and documented out-of-pocket legal or other expenses
incurred in connection with investigating, preparing for, providing testimony or other evidence in connection with or defending any of the foregoing. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or
demand shall be brought or asserted against the Indemnified Person, such Indemnified Person shall promptly notify Company in writing, and Company, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others Company may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. Company shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, Company agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Company shall not, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding contemplated by this paragraph in respect of which any Indemnified Person is a
party and |
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indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are
the subject matter of such proceeding on terms reasonably satisfactory to such Indemnified Person. If the indemnification provided for in this paragraph is unavailable to an Indemnified Person or insufficient in respect of any losses, claims,
damages or liabilities referred to therein, then Company under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities. The remedies provided for in this paragraph are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. The indemnity and contribution agreements
contained in this paragraph shall remain operative and in full force and effect regardless of the termination of the Transaction. |
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(c) |
Regulation M. Company is not on the Trade Date engaged in a distribution, as such term is used in Regulation M under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
of any securities of Company, other than a distribution meeting the requirements of the exception set forth in Rules 101(b)(10) and 102(b)(7) of Regulation M. Company shall not, until the second Scheduled Trading Day immediately following the
Effective Date, engage in any such distribution. |
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(d) |
No Manipulation. Company is not entering into the Transaction to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or
depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares) or otherwise in violation of the Exchange Act. |
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(e) |
Transfer or Assignment. Company may not transfer any of its rights or obligations under the Transaction without the prior written consent of Dealer. Dealer may, without Company’s consent, transfer or
assign all or any part of its rights or obligations under the Transaction to any third party; provided that (i) Company will not, as a result of such transfer and assignment, be required to pay the transferee on any payment date an
amount under Section 2(d)(i)(4) of the Agreement greater than an amount that Company would have been required to pay to Dealer in the absence of such transfer or assignment, except to the extent that the greater amount is due to a Change in Tax
Law after the date of such transfer or assignment, and (ii) Dealer shall have caused the transferee to make such Payee Tax Representations and to provide such tax documentation as may be reasonably requested by Company to permit Company to
determine that such transfer or assignment complies with clause (i) of this sentence. If at any time at which (A) the Section 16 Percentage exceeds 7.0%, (B) the Warrant Equity Percentage exceeds 14.0%, or (C) the Share
Amount exceeds the Applicable Share Limit (if any applies) (any such condition described in clauses (A), (B) or (C), an “Excess Ownership Position”), Dealer, acting in good faith, is unable after using its commercially
reasonable efforts to effect a transfer or assignment of Warrants to a third party on pricing terms reasonably acceptable to Dealer and within a time period reasonably acceptable to Dealer such that no Excess Ownership Position exists, then Dealer
may designate any Exchange Business Day as an Early Termination Date with respect to a portion of the Transaction (the “Terminated Portion”), such that following such partial termination no Excess Ownership Position exists. In the
event that Dealer so designates an Early Termination Date with respect to a Terminated Portion, a payment shall be made pursuant to Section 6 of the Agreement as if (1) an Early Termination Date had been designated in respect of a
Transaction having terms identical to the Transaction and a Number of Warrants equal to the number of Warrants underlying the Terminated Portion, (2) Company were the sole Affected Party with respect to such partial termination and (3) the
Terminated Portion were the sole Affected Transaction (and, for the avoidance of doubt, the provisions of Section 9(i) shall apply to any amount that is payable by Company to Dealer pursuant to this sentence as if Company was not the Affected
Party). The “Section 16 Percentage” as of any day is the fraction, expressed as a percentage, (A) the numerator of which is the number of Shares that Dealer and each person subject to aggregation of Shares with Dealer under
Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder directly or indirectly beneficially own (as defined under Section 13 or Section 16 of the Exchange Act and rules promulgated thereunder) and
(B) the denominator of which is the number |
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of Shares outstanding. The “Warrant Equity Percentage” as of any day is
the fraction, expressed as a percentage, (A) the numerator of which is the sum of (1) the product of the Number of Warrants and the Warrant Entitlement and (2) the aggregate number of Shares underlying any other warrants purchased by
Dealer from Company, and (B) the denominator of which is the number of Shares outstanding. The “Share Amount” as of any day is the number of Shares that Dealer and any person whose ownership position would be aggregated with
that of Dealer (Dealer or any such person, a “Dealer Person”) under any law, rule, regulation, regulatory order or organizational documents or contracts of Company that are, in each case, applicable to ownership of Shares
(“Applicable Restrictions”), owns, beneficially owns, constructively owns, controls, holds the power to vote or otherwise meets a relevant definition of ownership under any Applicable Restriction, as determined by Dealer in its
commercially reasonable discretion. The “Applicable Share Limit” means a number of Shares equal to (A) the minimum number of Shares that could give rise to reporting or registration obligations (except for any filing
requirements on Form 13F, Schedule 13D or Schedule 13G under the Exchange Act, in each case, as in effect on the Trade Date) or other requirements (including obtaining prior approval from any person or entity) of a Dealer Person, or is reasonably
likely to result in an adverse effect on a Dealer Person, under any Applicable Restriction, as determined by Dealer in its commercially reasonable discretion, minus (B) 1.5% of the number of Shares outstanding.
Notwithstanding any other provision in this Confirmation to the contrary requiring or allowing Dealer to purchase, sell, receive or deliver any Shares or other securities, or make or receive any payment in cash, to or from Company, Dealer may
designate any of its affiliates to purchase, sell, receive or deliver such Shares or other securities, or make or receive such payment in cash, and otherwise to perform Dealer’s obligations in respect of the Transaction and any such designee
may assume such obligations. Dealer shall be discharged of its obligations to Company to the extent of any such performance.
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(f) |
Dividends. If at any time during the period from and including the Effective Date, to and including the last Expiration Date, (i) an ex-dividend date for a cash dividend occurs with respect to the
Shares (an “Ex-Dividend Date”), and that dividend differs from the Regular Dividend on a per Share basis or (ii) if no Ex-Dividend Date for a cash dividend occurs with respect to the Shares in any quarterly dividend period of
Company, then the Calculation Agent will adjust any of the Strike Price, Number of Warrants, Daily Number of Warrants and/or any other variable relevant to the exercise, settlement or payment of the Transaction to preserve the fair value of the
Warrants to Dealer after taking into account such dividend or lack thereof. “Regular Dividend” shall mean for any calendar quarter, USD 0.035 for the first regular cash dividend or distribution on the Shares for which the
Ex-Dividend Date falls within such calendar quarter, and zero for any other dividend or distribution on the Shares for which the Ex-Dividend Date falls within the same calendar quarter. |
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(g) |
Additional Provisions. |
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(i) |
Amendments to the Equity Definitions: |
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(A) |
Section 11.2(a) of the Equity Definitions is hereby amended by deleting the words “an event having, in the determination of the Calculation Agent, a diluting or concentrative effect on the theoretical value of
the relevant Shares” and replacing them with the words “a Potential Adjustment Event”. |
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(B) |
Section 11.2(c) of the Equity Definitions is hereby amended by (w) replacing the words “a diluting or concentrative” with “a material economic” in the fifth line thereof, (x) adding
the phrase “or Warrants” after the words “the relevant Shares” in the same sentence, (y) deleting the words “diluting or concentrative” in the sixth to last line thereof and replacing them with the words
“material economic” and (z) deleting the phrase “(provided that no adjustments will be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares)” and
replacing it with the phrase “(provided that, solely in the case of Sections 11.2(e)(i), (ii)(A), and (iv), no adjustments will be made to account solely for changes in volatility, expected |
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dividends, stock loan rate or liquidity relative to the relevant Shares, but, for the avoidance of doubt, solely in the case of Sections 11.2(e)(ii)(B) through (D), (iii), (v), (vi) and
(vii), adjustments may be made to account solely for changes in volatility, expected dividends, stock loan rate or liquidity relative to the relevant Shares).” |
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(C) |
Section 11.2(e)(vii) of the Equity Definitions is hereby amended by deleting the words “that may have a diluting or concentrative effect on the theoretical value of the relevant Shares” and replacing them
with the words “that is the result of a corporate event involving the Issuer or its securities that has a material economic effect on the relevant Transaction; provided that such event is not based on (a) an observable market, other
than the market for the Company’s own stock or (b) an observable index, other than an index calculated and measured solely by reference to Company’s own operations”. |
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(D) |
Section 12.6(a)(ii) of the Equity Definitions is hereby amended by (1) deleting from the fourth line thereof the word “or” after the word “official” and inserting a comma therefor, and
(2) deleting the semi-colon at the end of subsection (B) thereof and inserting the following words therefor “or (C) the occurrence of any of the events specified in Section 5(a)(vii) (1) through (9) of the ISDA
Master Agreement with respect to that Issuer.” |
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(E) |
Section 12.9(b)(iv) of the Equity Definitions is hereby amended by: |
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(x) |
deleting (1) subsection (A) in its entirety, (2) the phrase “or (B)” following subsection (A) and (3) the phrase “in each case” in subsection (B); and |
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(y) |
replacing the phrase “neither the Non-Hedging Party nor the Lending Party lends Shares” with the phrase “such Lending Party does not lend Shares” in the penultimate sentence. |
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(F) |
Section 12.9(b)(v) of the Equity Definitions is hereby amended by: |
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(x) |
adding the word “or” immediately before subsection “(B)” and deleting the comma at the end of subsection (A); and |
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(y) |
(1) deleting subsection (C) in its entirety, (2) deleting the word “or” immediately preceding subsection (C), (3) deleting the penultimate sentence in its entirety and replacing it with the
sentence “The Hedging Party will determine the Cancellation Amount payable by one party to the other in a commercially reasonable manner.” and (4) deleting clause (X) in the final sentence. |
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(ii) |
Notwithstanding anything to the contrary in this Confirmation, upon the occurrence of one of the following events, with respect to the Transaction, (1) Dealer shall have the right to designate such event an
Additional Termination Event and designate an Early Termination Date pursuant to Section 6(b) of the Agreement, (2) Company shall be deemed the sole Affected Party with respect to such Additional Termination Event and (3) the
Transaction, or, at the election of Dealer in its sole discretion, any portion of the Transaction, shall be deemed the sole Affected Transaction; provided that if Dealer so designates an Early Termination Date with respect to a portion of the
Transaction, (a) a payment shall be made pursuant to Section 6 of the Agreement as if an Early Termination Date had been designated in respect of a Transaction having terms identical to the Transaction and a Number of Warrants equal to the
number of Warrants included in the terminated portion of the Transaction, and (b) for the avoidance of doubt, the Transaction shall remain in full force and effect except that the Number of Warrants shall be reduced by the number of Warrants
included in such terminated portion: |
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(A) |
Other than as described in the paragraph immediately following clause (B) below, a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than Company, its
direct or indirect wholly owned subsidiaries and its and their employee benefit plans, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect “beneficial
owner,” as defined in Rule 13d-3 under the Exchange Act, of the common equity of Company representing more than 50% of the voting power of such common equity. |
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(B) |
Consummation of (I) any recapitalization, reclassification or change of the Shares (other than changes resulting from a subdivision or combination) as a result of which the Shares would be converted into, or
exchanged for, stock, other securities, other property or assets, (II) any share exchange, consolidation or merger of Company pursuant to which the Shares will be converted into cash, securities or other property or assets or (III) any sale,
lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of Company and its subsidiaries, taken as a whole, to any person other than one of Company’s direct or indirect wholly
owned subsidiaries. |
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Notwithstanding the foregoing, any transaction or transactions set forth in clause (A) or clause (B) above shall not constitute an Additional Termination Event if (x) at least 90% of the consideration
received or to be received by holders of the Shares, excluding cash payments for fractional Shares and cash payments in respect of dissenter’s rights, in connection with such transaction or transactions consists of shares of common stock that
are listed or quoted on any of The New York Stock Exchange, The NASDAQ Global 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 (y) as a result of such transaction or transactions, all holders of the Shares prior to the transaction or transactions will receive such consideration in exchange for their Shares, excluding cash payments for
fractional Shares and cash payments in respect of dissenter’s rights. |
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(C) |
Default by Company or any of its significant subsidiaries with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness
for money borrowed in excess of $75 million (or its foreign currency equivalent) in the aggregate of Company and/or any such subsidiary, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness
becoming or being declared due and payable or (ii) constituting a failure to pay the principal or interest of any such debt when due and payable at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise if
such default is not cured or waived, or such acceleration is not rescinded within 30 days after notice to Company by the trustee for any debt securities issued by Company or to Company and any such trustee by holders of at least 25% in principal
amount of such debt securities then outstanding. A “significant subsidiary” is a subsidiary that is a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X promulgated by the Securities and Exchange
Commission. |
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(D) |
Dealer reasonably determines that it is advisable, based on advice of counsel, to terminate all or a portion of the Transaction, because Dealer’s commercially reasonable hedging activities in the public market with
respect to the all or such portion of the Transaction do not comply with applicable securities laws, rules or regulations or related policies and procedures applicable to Dealer and the Transaction (whether or not such requirements, policies or
procedures are imposed by law or have been voluntarily adopted by Dealer in good faith in relation to such requirements). |
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(h) |
No Collateral or Setoff. Notwithstanding any provision of the Agreement or any other agreement between the parties to the contrary, the obligations of Company hereunder are not secured by any collateral.
Obligations under the Transaction shall not be set off by Company against any other obligations of the parties, whether arising under the Agreement, this Confirmation, under any other agreement between the parties hereto. |
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(i) |
Alternative Calculations and Payment on Early Termination and on Certain Extraordinary Events. |
If (a) an Early Termination Date (whether as a result of an Event of Default or a Termination Event) occurs or is designated with respect
to the Transaction or (b) the Transaction is cancelled or terminated upon the occurrence of an Extraordinary Event (except as a result of (i) a Nationalization, Insolvency or Merger Event in which the consideration to be paid to holders of
Shares consists solely of cash, (ii) a Merger Event or Tender Offer that is within Company’s control, or (iii) an Event of Default in which Company is the Defaulting Party or a Termination Event in which Company is the Affected Party
other than an Event of Default of the type described in Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement or a Termination Event of the type described in Section 5(b) of the Agreement, in each case that resulted from
an event or events outside Company’s control), and if Company would owe any amount to Dealer pursuant to Section 6(d)(ii) of the Agreement or any Cancellation Amount pursuant to Article 12 of the Equity Definitions (any such amount, a
“Payment Obligation”), then Company shall satisfy the Payment Obligation by the Share Termination Alternative (as defined below), unless (a) Company gives irrevocable telephonic notice to Dealer, confirmed in writing within one
Scheduled Trading Day, no later than 12:00 p.m. (New York City time) on the Merger Date, Tender Offer Date, Announcement Date (in the case of a Nationalization, Insolvency or Delisting), Early Termination Date or date of cancellation, as applicable,
of its election that the Share Termination Alternative shall not apply, (b) Company remakes the representation set forth in Section 8(a)(vii) as of the date of such election and (c) Dealer agrees, in its sole discretion, to such election,
in which case the provisions of Section 12.7 or Section 12.9 of the Equity Definitions, or the provisions of Section 6(d)(ii) and Section 6(e) of the Agreement, as the case may be, shall apply.
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Share Termination Alternative: |
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If applicable, Company shall deliver to Dealer the Share Termination Delivery Property on the date (the “Share Termination Payment Date”) on which the Payment Obligation would otherwise be due pursuant to Sections
12.2, 12.3, 12.6, 12.7 or 12.9 of the Equity Definitions or Section 6(d)(ii) of the Agreement, as applicable, subject to Section 9(j)(i) below, in satisfaction, subject to Section 9(j)(ii) below, of the relevant Payment Obligation, in the manner
reasonably requested by Dealer free of payment. |
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Share Termination Delivery Property: |
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A number of Share Termination Delivery Units, as calculated by the Calculation Agent, equal to the relevant Payment Obligation divided by the Share Termination Unit Price. The Calculation Agent shall adjust the amount of
Share Termination Delivery Property by replacing any fractional portion of a security therein with an amount of cash equal to the value of such fractional security based on the values used to calculate the Share Termination Unit Price (without
giving effect to any discount pursuant to Section 9(j)(i)). |
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Share Termination Unit Price: |
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The value of property contained in one Share Termination Delivery Unit on the date such Share Termination Delivery Units are to be delivered as Share Termination Delivery Property, as determined by the Calculation Agent in its
discretion by commercially reasonable means and notified by the Calculation Agent to Company at the time of notification of the Payment Obligation. In the case of a Private Placement of Share Termination Delivery Units that are Restricted Shares (as
defined below), as set forth in Section 9(j)(i) below, the Share Termination Unit Price shall be determined by the discounted price applicable to such Share Termination Delivery Units. In the case of a Registration Settlement of Share
Termination Delivery Units that are Restricted Shares (as defined below) as set forth in Section 9(j)(ii) below, notwithstanding the foregoing, the Share Termination Unit Price shall be the Settlement Price on the Merger Date, Tender Offer
Date, Announcement Date (in the case of a Nationalization, Insolvency or Delisting), Early Termination Date or date of cancellation, as applicable. The Calculation Agent shall notify Company of the Share Termination Unit Price at the time of
notification of such Payment Obligation to Company or, if applicable, at the time the discounted price applicable to the relevant Share Termination Units is determined pursuant to Section 9(j)(i). |
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Share Termination Delivery Unit: |
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One Share or, if the Shares have changed into cash or any other property or the right to receive cash or any other property as the result of a Nationalization, Insolvency or Merger Event (any such cash or other property, the
“Exchange Property”), a unit consisting of the type and amount of Exchange Property received by a holder of one Share (without consideration of any requirement to pay cash or other consideration in lieu of fractional amounts of any
securities) in such Nationalization, Insolvency or Merger Event. If such Nationalization, Insolvency or Merger Event involves a choice of Exchange Property to be received by holders, such holder shall be deemed to have elected to receive the maximum
possible amount of cash. |
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Failure to Deliver: |
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Inapplicable |
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Other applicable provisions: |
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If Share Termination Alternative is applicable, the provisions of Sections 9.8, 9.9, 9.11 and 9.12 (as modified above) of the Equity Definitions will be applicable as if Physical Settlement applied to the Transaction, and the
provisions set forth opposite the caption “Representation and Agreement” in Section 2 will be applicable. |
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(j) |
Registration/Private Placement Procedures. If, in the commercially reasonable opinion of Dealer, based on the advice of counsel, following any delivery of Shares or Share Termination Delivery Property to
Dealer hereunder, such Shares or Share Termination Delivery Property would not be immediately transferable by Dealer under Rule 144 under the Securities Act (or any successor rule), without volume or manner of sale limitations, other than as a
result of Dealer being, or having been at any time during the immediately preceding three months, an “affiliate” (as defined in Rule 144(a)(1) under the Securities Act) of the Issuer (such Shares or Share Termination Delivery Property,
“Restricted Shares”), then delivery of such Restricted Shares shall be effected pursuant to either clause (i) or (ii) below at the election of Company, unless Dealer waives the need for registration/private placement
procedures set forth in (i) and (ii) below. Notwithstanding the foregoing, if Dealer notifies Company of the need for registration or private placement procedures under this Section 9(j), solely in respect of any Daily Number of
Warrants exercised or deemed exercised on any Expiration Date, Company shall elect, prior to the first Settlement Date for the first applicable Expiration Date or if later, the Scheduled Trading Day following such notification, a Private Placement
Settlement or Registration Settlement for all deliveries of Restricted Shares for all such Expiration Dates which election shall be applicable to all remaining Settlement Dates for such Warrants and the procedures in clause (i) or clause
(ii) below shall apply for all such delivered Restricted Shares on an aggregate basis commencing after the final Settlement Date for such Warrants. At the written request of the Company, the Calculation Agent shall make reasonable adjustments
to settlement terms and provisions under this Confirmation to allow for a single Private Placement or Registration Settlement for such aggregate Restricted Shares delivered hereunder. |
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(i) |
If Company elects to settle the Transaction pursuant to this clause (i) (a “Private Placement Settlement”), then delivery of Restricted Shares by Company shall be effected in customary private
placement procedures with respect to such Restricted Shares for private placements of equity securities by similar issuers of a similar size commercially reasonably acceptable to Dealer; provided that Company may not elect a Private Placement
Settlement if, on the date of its election, it has taken, or caused to be taken, any action that would make unavailable either the exemption pursuant to Section 4(a)(2) of the Securities Act for the sale by Company to Dealer (or any affiliate
designated by Dealer) of the Restricted Shares or the exemption pursuant to Section 4(a)(1) or Section 4(a)(3) of the Securities Act for resales of the Restricted Shares by Dealer (or any such affiliate of Dealer). The Company shall use
best efforts to allow for the Private Placement Settlement of such Restricted Shares to include customary representations, covenants, blue sky and other governmental filings and/or registrations, indemnities to Dealer, due diligence rights (for
Dealer or any designated buyer of the Restricted Shares by Dealer subject to execution by recipients of such due diligence of customary confidentiality agreements reasonably acceptable to Company), opinions and certificates, and such other
documentation as is customary for private placement agreements for private placements of equity securities by similar issuers of a similar size, all commercially reasonably acceptable to Dealer. In the case of a Private Placement Settlement, Dealer
shall determine the appropriate discount to the Share Termination Unit Price (in the case of settlement of Share Termination Delivery Units pursuant to Section 9(i) above) or premium to any Settlement Price (in the case of settlement of Shares
pursuant to Section 2 above) applicable to such Restricted Shares in a commercially reasonable manner and appropriately adjust the number of such Restricted Shares to be delivered to Dealer hereunder. Notwithstanding anything to the contrary in
the Agreement or this Confirmation, the date of delivery of such Restricted Shares shall be the Exchange Business Day following notice by Dealer to Company of such applicable discount or premium, as the case may be, and the number of Restricted
Shares to be delivered pursuant to this clause (i). For the avoidance of doubt, delivery of Restricted Shares shall be due as set forth in the previous sentence and not be due on the Share Termination Payment Date (in the case of settlement of Share
Termination Delivery Units pursuant to Section 9(i) above) or on the Settlement Date for such Restricted Shares (in the case of settlement in Shares pursuant to Section 2 above). |
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(ii) |
If Company elects to settle the Transaction pursuant to this clause (ii) (a “Registration Settlement”), then Company shall promptly (but in any event no later than the beginning of the Resale
Period) file and use its commercially reasonable best efforts to make effective under the Securities Act a registration statement or supplement or amend an outstanding registration statement in form and substance reasonably satisfactory to Dealer,
to cover the resale of such Restricted Shares in accordance with customary resale registration procedures, including covenants, conditions, representations, commercially reasonable underwriting discounts (if applicable), commercially reasonable
commissions (if applicable), indemnities due diligence rights, opinions and certificates, and such other documentation as is customary for equity resale underwriting agreements, all commercially reasonably acceptable to Dealer and all customary in
scope and form for underwritten offerings by similar issuers of similar size of equity securities. If Dealer, in its sole reasonable discretion, is not satisfied with such procedures and documentation Private Placement Settlement shall apply. If
Dealer is satisfied with such procedures and documentation, it shall sell the Restricted Shares pursuant to such registration statement during a commercially reasonable period (the “Resale Period”) commencing on the Exchange
Business Day following delivery of such Restricted Shares (which, for the avoidance of doubt, shall be (x) the Share Termination Payment Date in case of settlement in Share Termination Delivery Units pursuant to Section 9(i) above or
(y) the Settlement Date in respect of the final Expiration Date for all Daily Number of Warrants) and ending on the Exchange Business Day on which Dealer completes the sale of all Restricted Shares or, in the case of settlement of Share
Termination Delivery Units, a sufficient number of Restricted Shares so that the realized net proceeds of such sales equals or exceeds the Payment Obligation (as defined above). If the Payment Obligation exceeds the realized net proceeds from such
resale, Company shall transfer to Dealer by the open of the regular trading session on the Exchange on the Exchange Trading Day immediately following such resale the amount of such excess (the “Additional Amount”) in cash or in a
number of Shares, at Company’s election (“Make-whole Shares”) in an amount that, based on the Settlement Price on such day (as if such day was the “Valuation Date” for purposes of computing such Settlement Price), has
a dollar value equal to the Additional Amount. The Resale Period shall continue to enable the sale of the Make-whole Shares. If Company elects to pay the Additional Amount in Shares, the requirements and provisions for Registration Settlement shall
apply. This provision shall be applied successively until the Additional Amount is equal to zero. In no event shall Company deliver a number of Restricted Shares greater than the Maximum Number of Shares. |
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(iii) |
Without limiting the generality of the foregoing, Company agrees that (A) any Restricted Shares delivered to Dealer may be transferred by and among Dealer and its affiliates and Company shall effect such transfer
without any further action by Dealer and (B) after the period of 6 months from the Trade Date (or 1 year from the Trade Date if, at such time, informational requirements of Rule 144(c) under the Securities Act are not satisfied with respect to
Company) has elapsed in respect of any Restricted Shares delivered to Dealer, unless Dealer is an affiliate of Company at such time or has been an affiliate of Company at any time during the immediately preceding three months, Company shall promptly
remove, or cause the transfer agent for such Restricted Shares to remove, any legends referring to any such restrictions or requirements from such Restricted Shares upon request by Dealer (or such affiliate of Dealer) to Company or such transfer
agent, without any requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document, any transfer tax stamps or payment of any other amount or any other action by Dealer (or such affiliate of
Dealer); provided that any such removal within 6 months from the Trade Date shall only occur in connection with a resale of such Restricted Shares under Rule 144. Notwithstanding anything to the contrary herein, to the extent the provisions
of Rule 144 of the Securities Act or any successor rule are amended, or the applicable interpretation thereof by the Securities and Exchange Commission or any court change after the Trade Date, the agreements of Company herein shall be deemed
modified to the extent necessary, in the opinion of outside counsel of Company, to comply with Rule 144 of the Securities Act, as in effect at the time of delivery of the relevant Shares or Share Termination Delivery Property. |
22
| |
(iv) |
If the Private Placement Settlement or the Registration Settlement shall not be effected as set forth in clauses (i) or (ii), as applicable, then failure to effect such Private Placement Settlement or such
Registration Settlement shall constitute an Event of Default with respect to which Company shall be the Defaulting Party. |
| |
(k) |
Limit on Beneficial Ownership. Notwithstanding any other provisions hereof, Dealer may not exercise any Warrant hereunder or be entitled to take delivery of any Shares deliverable hereunder, and Automatic
Exercise shall not apply with respect to any Warrant hereunder, to the extent (but only to the extent) that, after such receipt of any Shares upon the exercise of such Warrant or otherwise hereunder [and after taking into account any Shares
deliverable to Dealer under the letter agreement dated January 8, 2015 between Dealer and Company regarding Base Warrants (the “Base Warrant Confirmation”)]8, (i) the
Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount would exceed the Applicable Share Limit. Any purported delivery hereunder shall be void and have no effect to the extent (but only to the extent) that, after such delivery
[and after taking into account any Shares deliverable to Dealer under the Base Warrant Confirmation]9, (i) the Section 16 Percentage would exceed 7.5%, or (ii) the Share Amount
would exceed the Applicable Share Limit. If any delivery owed to Dealer hereunder is not made, in whole or in part, as a result of this provision, Company’s obligation to make such delivery shall not be extinguished and Company shall make such
delivery as promptly as practicable after, but in no event later than one Business Day after, Dealer gives notice to Company that, after such delivery, (i) the Section 16 Percentage would not exceed 7.5%, and (ii) the Share Amount
would not exceed the Applicable Share Limit. |
| |
(l) |
Share Deliveries. Notwithstanding anything to the contrary herein, Company agrees that any delivery of Shares or Share Termination Delivery Property shall be effected by book-entry transfer through the
facilities of DTC, or any successor depositary, if at the time of delivery, such class of Shares or class of Share Termination Delivery Property is in book-entry form at DTC or such successor depositary. |
| |
(m) |
Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to the
Transaction. Each party (i) certifies that no representative, agent or attorney of the other party has represented, expressly or otherwise, that such other party would not, in the event of such a suit, action or proceeding, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into the Transaction, as applicable, by, among other things, the mutual waivers and certifications provided herein. |
| |
(n) |
Tax Disclosure. Effective from the date of commencement of discussions concerning the Transaction, Company and each of its employees, representatives, or other agents may disclose to any and all persons,
without limitation of any kind, the tax treatment and tax structure of the Transaction and all materials of any kind (including opinions or other tax analyses) that are provided to Company relating to such tax treatment and tax structure.
|
| |
(o) |
Maximum Share Delivery. |
| |
(i) |
Notwithstanding any other provision of this Confirmation, the Agreement or the Equity Definitions, in no event will Company at any time be required to deliver a number of Shares greater than [Number Equal to Two
times the Number of Shares on the Trade Date] (the “Maximum Number of Shares”) to Dealer in connection with the Transaction. Notwithstanding anything to the contrary in the Agreement, this Confirmation or the Equity
Definitions, the Maximum Number of Shares shall not be adjusted on account of any event that constitutes a Potential Adjustment Event solely on account of Section 11.2(e)(vii) of the Equity Definitions that is not within the Company’s
control. |
| 8 |
Included in the Additional Warrant Confirmation. |
| 9 |
Included in the Additional Warrant Confirmation. |
23
| |
(ii) |
In the event Company shall not have delivered to Dealer the full number of Shares or Restricted Shares otherwise deliverable by Company to Dealer pursuant to the terms of the Transaction because Company has insufficient
authorized but unissued Shares that are not reserved for other transactions (such deficit, the “Deficit Shares”), Company shall be continually obligated to deliver, from time to time, Shares or Restricted Shares, as the case may be,
to Dealer until the full number of Deficit Shares have been delivered pursuant to this Section 9(o)(ii), when, and to the extent that, (A) Shares are repurchased, acquired or otherwise received by Company or any of its subsidiaries after
the Trade Date (whether or not in exchange for cash, fair value or any other consideration), (B) authorized and unissued Shares previously reserved for issuance in respect of other transactions become no longer so reserved or (C) Company
additionally authorizes any unissued Shares that are not reserved for other transactions; provided that in no event shall Company deliver any Shares or Restricted Shares to Dealer pursuant to this Section 9(o)(ii) to the extent that such
delivery would cause the aggregate number of Shares and Restricted Shares delivered to Dealer to exceed the Maximum Number of Shares. Company shall immediately notify Dealer of the occurrence of any of the foregoing events (including the number of
Shares subject to clause (A), (B) or (C) and the corresponding number of Shares or Restricted Shares, as the case may be, to be delivered) and promptly deliver such Shares or Restricted Shares, as the case may be, thereafter.
|
| |
(p) |
Right to Extend. Dealer may postpone or add, in whole or in part, any Expiration Date or any other date of valuation or delivery with respect to some or all of the relevant Warrants (in which event the
Calculation Agent shall make appropriate adjustments to the Daily Number of Warrants with respect to one or more Expiration Dates) if Dealer determines, in its commercially reasonable judgment and, in the case of clause (ii) below, based on
advice of counsel, that such extension is reasonably necessary or advisable (i) to preserve Dealer’s commercially reasonable hedging or hedge unwind activity hereunder in light of existing liquidity conditions or (ii) to enable Dealer
to effect purchases of Shares in connection with its commercially reasonable hedging, hedge unwind or settlement activity hereunder in a manner that would, if Dealer were Issuer or an affiliated purchaser of Issuer, be in compliance with applicable
legal, regulatory or self-regulatory requirements, or with related policies and procedures applicable to Dealer (so long as such policies and procedures would generally be applicable to counterparties similar to Company and transactions similar to
the Transaction). |
| |
(q) |
Status of Claims in Bankruptcy. Dealer acknowledges and agrees that this Confirmation is not intended to convey to Dealer rights against Company with respect to the Transaction that are senior to the
claims of common stockholders of Company in any United States bankruptcy proceedings of Company; provided that nothing herein shall limit or shall be deemed to limit Dealer’s right to pursue remedies in the event of a breach by Company
of its obligations and agreements with respect to the Transaction; provided, further, that nothing herein shall limit or shall be deemed to limit Dealer’s rights in respect of any transactions other than the Transaction.
|
| |
(r) |
Securities Contract; Swap Agreement. The parties hereto intend for (i) the Transaction to be a “securities contract” and a “swap agreement” as defined in the Bankruptcy Code (Title
11 of the United States Code) (the “Bankruptcy Code”), and the parties hereto to be entitled to the protections afforded by, among other Sections, Sections 362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code,
(ii) a party’s right to liquidate the Transaction and to exercise any other remedies upon the occurrence of any Event of Default under the Agreement with respect to the other party to constitute a “contractual right” as described
in the Bankruptcy Code, and (iii) each payment and delivery of cash, securities or other property hereunder to constitute a “margin payment” or “settlement payment” and a “transfer” as defined in the Bankruptcy
Code. |
24
| |
(s) |
Wall Street Transparency and Accountability Act. In connection with Section 739 of the Wall Street Transparency and Accountability Act of 2010 (“WSTAA”), the parties hereby agree that
neither the enactment of WSTAA or any regulation under the WSTAA, nor any requirement under WSTAA or an amendment made by WSTAA, shall limit or otherwise impair either party’s otherwise applicable rights to terminate, renegotiate, modify, amend
or supplement this Confirmation or the Agreement, as applicable, arising from a termination event, force majeure, illegality, increased costs, regulatory change or similar event under this Confirmation, the Equity Definitions incorporated herein, or
the Agreement (including, but not limited to, rights arising from Change in Law, Hedging Disruption, Increased Cost of Hedging, an Excess Ownership Position, or Illegality (as defined in the Agreement)). |
| |
(t) |
Agreements and Acknowledgements Regarding Hedging. Company understands, acknowledges and agrees that: (A) at any time on and prior to the last Expiration Date, Dealer and its affiliates may buy or
sell Shares or other securities or buy or sell options or futures contracts or enter into swaps or other derivative securities in order to adjust its hedge position with respect to the Transaction; (B) Dealer and its affiliates also may be
active in the market for Shares other than in connection with hedging activities in relation to the Transaction; (C) Dealer shall make its own determination as to whether, when or in what manner any hedging or market activities in securities of
Issuer shall be conducted and shall do so in a manner that it deems appropriate to hedge its price and market risk with respect to the Settlement Prices; and (D) any market activities of Dealer and its affiliates with respect to Shares may
affect the market price and volatility of Shares, as well as the Settlement Prices, each in a manner that may be adverse to Company. |
| |
(u) |
Early Unwind. In the event the sale of the [“Firm Notes”]10[“Optional Notes”]11
(as defined in the Purchase Agreement) is not consummated with the Initial Purchasers for any reason, or Company fails to deliver to Dealer opinions of counsel as required pursuant to Section 9(a), in each case by 5:00 p.m. (New York City time)
on the Premium Payment Date, or such later date as agreed upon by the parties (the Premium Payment Date or such later date the “Early Unwind Date”), the Transaction shall automatically terminate (the “Early
Unwind”), on the Early Unwind Date and (i) the Transaction and all of the respective rights and obligations of Dealer and Company under the Transaction shall be cancelled and terminated and (ii) each party shall be released and
discharged by the other party from and agrees not to make any claim against the other party with respect to any obligations or liabilities of the other party arising out of and to be performed in connection with the Transaction either prior to or
after the Early Unwind Date. Each of Dealer and Company represents and acknowledges to the other that upon an Early Unwind, all obligations with respect to the Transaction shall be deemed fully and finally discharged. |
| |
(v) |
Payment by Dealer. In the event that (i) an Early Termination Date occurs or is designated with respect to the Transaction as a result of a Termination Event or an Event of Default (other than an
Event of Default arising under Section 5(a)(ii) or 5(a)(iv) of the Agreement) and, as a result, Dealer owes to Company an amount calculated under Section 6(e) of the Agreement, or (ii) Dealer owes to Company, pursuant to
Section 12.7 or Section 12.9 of the Equity Definitions, an amount calculated under Section 12.8 of the Equity Definitions, such amount shall be deemed to be zero. |
| |
(w) |
Listing of Warrant Shares. Company shall have submitted an application for the listing of the Warrant Shares on the Exchange, and such application and listing shall have been approved by the Exchange,
subject only to official notice of issuance, in each case, on or prior to the Premium Payment Date. Company agrees and acknowledges that such submission and approval shall be a condition precedent for the purpose of Section 2(a)(iii) of the
Agreement with respect to each obligation of Dealer under Section 2(a)(i) of the Agreement. |
| |
(x) |
Adjustments. For the avoidance of doubt, whenever the Calculation Agent or Determining Party is called upon to make an adjustment pursuant to the terms of this Confirmation or the Equity Definitions to
take into account the effect of an event, the Calculation Agent or Determining Party shall make such adjustment by reference to the effect of such event on the Hedging Party, assuming that the Hedging Party maintains a commercially reasonable hedge
position. |
| 10 |
Inserted in the Base Warrant Confirmation. |
| 11 |
Inserted in the Additional Warrant Confirmation. |
25
| |
(y) |
[Method of Delivery. Whenever delivery of funds or other assets is required hereunder by or to Company, such delivery shall be effected through DBSI. In addition, all notices, demands and communications of
any kind relating to the Transaction between Dealer and Company shall be transmitted exclusively through DBSI.]12 [Role of Agent. Each party agrees and acknowledges that
(i) J.P. Morgan Securities LLC, an affiliate of Dealer (“JPMS”), has acted solely as agent and not as principal with respect to the Transaction and (ii) JPMS has no obligation or liability, by way of guaranty, endorsement
or otherwise, in any manner in respect of the Transaction (including, if applicable, in respect of the settlement thereof). Each party agrees it will look solely to the other party (or any guarantor in respect thereof) for performance of such other
party’s obligations under the Transaction.]13 |
| |
(i) |
Withholding Tax imposed on payments to non-US counterparties under the United States Foreign Account Tax Compliance Act. “Tax” and “Indemnifiable Tax”, each as defined in Section 14 of
the Agreement, shall not include any U.S. federal withholding tax imposed or collected pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or
official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection
with the implementation of such Sections of the Code (a “FATCA Withholding Tax”). For the avoidance of doubt, a FATCA Withholding Tax is a Tax the deduction or withholding of which is required by applicable law for the purposes of
Section 2(d) of the Agreement. |
| |
(ii) |
HIRE Act. “Tax” and “Indemnifiable Tax”, each as defined in Section 14 of the Agreement, shall not include any tax imposed on payments treated as dividends from sources within the
United States under Section 871(m) of the Code or any regulations issued thereunder. |
| |
(iii) |
Tax documentation. Company shall provide to Dealer a valid U.S. Internal Revenue Service Form W-9, or any successor thereto, (i) on or before the date of execution of this Confirmation and (ii) promptly
upon learning that any such tax form previously provided by Company has become obsolete or incorrect. On or prior to the Trade Date and at any other time reasonably requested by Company, Dealer shall have delivered to Company a properly completed,
as applicable (i) Internal Revenue Service Form W-9 or Internal Revenue Service Form W-8ECI or (ii) (A) Internal Revenue Service Form W-8IMY along with a withholding statement and (B) attached Internal Revenue Service Form W-9 or
Internal Revenue Service Form W-8ECI. |
| |
(aa) |
Delivery or Receipt of Cash. For the avoidance of doubt, other than receipt of the Premium by Company, nothing in this Confirmation shall be interpreted as requiring Company to cash settle the Transaction,
except in circumstances where cash settlement is within Company’s control (including, without limitation, where Company elects to deliver or receive cash, or where Company has made Private Placement Settlement unavailable due to the occurrence
of events within its control) or in those circumstances in which holders of Shares would also receive cash. |
| |
[(bb) |
2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol. |
The parties agree that the terms of the 2013 EMIR Portfolio Reconciliation, Dispute Resolution and Disclosure Protocol published by ISDA
on July 19, 2013 (“Protocol”) apply to the Transaction as if the parties had adhered to the Protocol without amendment. In respect of the Attachment to the Protocol, (i) the definition of “Adherence Letter” shall
be deemed to be deleted and references to “Adherence Letter” shall be deemed to be to this Section (bb) (and references to “such party’s Adherence Letter” and “its Adherence Letter” shall be read accordingly), (ii)
| 12 |
Included in the Deutsche Bank AG, London Branch Warrant Confirmation. |
| 13 |
Included in the JPMorgan Chase Bank, National Association, London Branch Warrant Confirmation. |
26
references to “adheres to the Protocol” shall be deemed to be “enters into this Confirmation”, (iii) references to “Protocol Covered Agreement” shall be deemed
to be references to this Confirmation (and each “Protocol Covered Agreement” shall be read accordingly), and (iv) references to “Implementation Date” shall be deemed to be references to the date of this Confirmation. For the
purposes of this Section (bb):
| |
(i) |
Dealer is a Portfolio Data Sending Entity and Company is a Portfolio Data Receiving Entity; |
| |
(ii) |
Dealer and Company may use a Third Party Service Provider, and each of Dealer and Company consents to such use including the communication of the relevant data in relation to Dealer and Company to such Third Party
Service Provider for the purposes of the reconciliation services provided by such entity; |
| |
(iii) |
The Local Business Days for such purposes in relation to Dealer are New York, London, Frankfurt, Tokyo and Singapore and in relation to Company are San Jose, California; |
| |
(iv) |
The provisions in this paragraph shall survive the termination of this Transaction. |
| |
(v) |
The following are the applicable email addresses. |
|
|
|
| Portfolio Data: |
|
Dealer: collateral.disputes@db.com |
|
|
|
|
Company: [•] |
|
|
| Notice of discrepancy: |
|
Dealer: collateral.disputes@db.com |
|
|
|
|
Company: [•] |
|
|
| Dispute Notice: |
|
Dealer: collateral.disputes@db.com |
|
|
|
|
Company: [•] |
| |
(cc) |
NFC Representation Protocol. |
| |
(i) |
The parties agree that the provisions set out in the Attachment to the ISDA 2013 EMIR NFC Representation Protocol published by ISDA on March 8, 2013 (the “NFC Representation Protocol”) shall apply
to the Transaction as if each party were an Adhering Party under the terms of the NFC Representation Protocol. In respect of the Attachment to the Protocol, (i) the definition of “Adherence Letter” shall be deemed to be deleted and
references to “Adherence Letter” shall be deemed to be to this Section (cc) (and references to “the relevant Adherence Letter” and “its Adherence Letter” shall be read accordingly), (ii) references to “adheres
to the Protocol” shall be deemed to be “enters into this Confirmation”, (iii) references to “Covered Master Agreement” shall be deemed to be references to the Agreement (and each “Covered Master Agreement”
shall be read accordingly), and (iv) references to “Implementation Date” shall be deemed to be references to the date of this Confirmation. |
| |
(ii) |
Company confirms that it enters into this Confirmation as a party making the NFC Representation (as such term is defined in the NFC Representation Protocol). Company shall promptly notify Dealer of any change to its
status as a party making the NFC Representation. |
| |
(dd) |
Transaction Reporting—Consent for Disclosure of Information. Notwithstanding anything to the contrary herein or in the Agreement or any non-disclosure, confidentiality or other agreements entered into
between the parties from time to time, each party hereby consents to the Disclosure of information (the “Reporting Consent”): |
27
| |
(i) |
to the extent required by, or necessary in order to comply with, any applicable law, rule or regulation which mandates Disclosure of transaction and similar information or to the extent required by, or necessary in
order to comply with, any order, request or directive regarding Disclosure of transaction and similar information issued by any relevant authority or body or agency (“Reporting Requirements”); or |
| |
(ii) |
to and between the other party’s head office, branches or affiliates; to any person, agent, third party or entity who provides services to such other party or its head office, branches or affiliates; to a Market;
or to any trade data repository or any systems or services operated by any trade repository or Market, in each case, in connection with such Reporting Requirements. |
“Disclosure” means disclosure, reporting, retention, or any action similar or analogous to any of the aforementioned.
“Market” means any exchange, regulated market, clearing house, central clearing counterparty or multilateral trading facility.
Disclosures made pursuant to this Reporting Consent may include, without limitation, Disclosure of information relating to disputes over
transactions between the parties, a party’s identity, and certain transaction and pricing data and may result in such information becoming available to the public or recipients in a jurisdiction which may have a different level of protection
for personal data from that of the relevant party’s home jurisdiction.
This Reporting Consent shall be deemed to constitute an
agreement between the parties with respect to Disclosure in general and shall survive the termination of this Confirmation. No amendment to or termination of this Reporting Consent shall be effective unless such amendment or termination is made in
writing between the parties and specifically refers to this Reporting Consent.]14
| 14 |
Included in the Deutsche Bank AG, London Branch Warrant Confirmation. |
28
Company hereby agrees (a) to check this Confirmation carefully and immediately upon receipt
so that errors or discrepancies can be promptly identified and rectified and (b) to confirm that the foregoing (in the exact form provided by Dealer) correctly sets forth the terms of the agreement between Dealer and Company with respect to the
Transaction, by manually signing this Confirmation or this page hereof as evidence of agreement to such terms and providing the other information requested herein and immediately returning an executed copy to [•].
Very truly yours,
|
|
|
| [DEALER] |
|
|
| By: |
|
|
|
|
|
| Authorized Signatory |
| Name: |
Accepted and confirmed
as
of the Trade Date:
|
|
|
| BROCADE COMMUNICATIONS SYSTEMS, INC. |
|
|
| By: |
|
|
|
|
|
| Authorized Signatory |
| Name: |
29
Brocade Communications Systems, Inc. (NASDAQ:BRCD)
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