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):
August 3, 2022
8x8, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware (State or Other Jurisdiction of Incorporation) | 001-21783 (Commission File Number) | 77-0142404 (I.R.S. Employer Identification No.) | ||||||
675 Creekside Way
Campbell, CA 95008
(Address of principal executive offices) (Zip Code)
(408) 727-1885
(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:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common Stock, $0.001 par value | EGHT | The New York Stock Exchange | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act .
Item 1.01. Entry into a Material Definitive Agreement.
Exchange Agreements
On August 3, 2022, 8x8, Inc. (the “Company”) entered into privately-negotiated agreements (the “Exchange Agreements”) with a limited number of existing holders of the Company’s 0.50% Convertible Senior Notes due 2024 (the “2024 Notes”) who are institutional “accredited investors” (within the meaning of Rule 501(a)(1), (2), (3) or (7) promulgated under the Securities Act of 1933, as amended (the “Securities Act”)) and “qualified institutional buyers” (as defined in Rule 144A under the Securities Act) (such existing holders, the “Exchange Participants”) to exchange approximately $404 million aggregate principal amount of the Exchange Participants’ existing 2024 Notes for approximately $202 million aggregate principal amount of the Company’s newly-issued 4.00% Convertible Senior Notes due 2028 (the “New Notes”) and approximately $182 million of cash consideration (such exchange transactions, the “Exchange”).
The description of the Exchange Agreements is qualified in its entirety by reference to the full and complete terms of the form of Exchange Agreement, which is attached hereto as Exhibit 10.1, and incorporated herein by reference.
Term Loan
On August 3, 2022, the Company entered into a new senior secured term loan credit agreement with Wilmington Savings Fund Society, FSB, as administrative agent, and certain affiliates of Francisco Partners as lenders (the “Credit Agreement”). The Credit Agreement establishes a $250 million senior secured term loan facility maturing on August 3, 2027.
Loans made under the term loan facility will bear interest at an annual rate equal to Term SOFR (which will be subject to a floor of 1.00% and a credit spread adjustment of 0.10%), plus a margin of 6.50%.
The obligations under the Credit Agreement will be guaranteed by the Company’s wholly-owned subsidiaries, subject to certain customary exceptions, and secured by a perfected security interest in substantially all of the Company’s tangible and intangible assets, as well as substantially all of the tangible and intangible assets of the guarantors.
Mandatory prepayments of the term loan facility are required to be made upon the occurrence of certain events, including, without limitation, (i) sales of certain assets, (ii) receipt of certain casualty and condemnation awards proceeds, and (iii) the incurrence of non-permitted indebtedness, subject to certain thresholds and reinvestment rights. Voluntary prepayments are permitted at any time, subject to certain prepayment premiums.
The Credit Agreement contains a minimum adjusted cash EBITDA financial covenant, a minimum liquidity covenant and a maximum secured leverage ratio financial covenant and contains affirmative and negative covenants customary for transactions of this type, including limitations with respect to indebtedness, liens, investments, dividends, disposition of assets, change in business and transactions with affiliates.
The funding of loans under the Credit Agreement is expected to occur on August 10, 2022, subject to customary closing conditions. The Company intends to use the proceeds of the term loan facility to fund the cash portion of an exchange of the Company’s approximately $404 million principal amount of the 2024 Notes for cash plus approximately $202 million of the New Notes, and the concurrent repurchase of approximately $60 million of the Company’s common stock with the counterparties to such exchange.
The description of the Credit Agreement is qualified in its entirety by reference to the full and complete terms of the Credit Agreement, which is attached hereto as Exhibit 10.2 and incorporated herein by reference.
Warrants
In connection with the term loan facility pursuant to the Credit Agreement, the Company will issue detachable warrants (the “Warrants”) to purchase an aggregate of 3,100,000 shares of the Company’s common stock with a five-year term and an exercise price of $7.15 that represents a 27.5% premium over the closing price per share of the Company’s common stock on August 3, 2022.
The description of the Warrants is qualified in its entirety by reference to the full and complete terms of the form of Warrant, which is attached hereto as Exhibit 10.3 and incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The New Notes are expected to be issued to the Exchange Participants in a private placement in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. The Company is relying on this exemption from registration based in part on representations made by the Exchange Participants and the Purchasers in the Agreements. The information set forth in Item 1.01 above is incorporated by reference into this Item 3.02.
An aggregate of 3,100,000 shares of Common Stock will be issued upon exercise of the Warrants, in accordance with the terms and conditions set forth in the Warrants, in a private placement in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. The Company is relying on this exemption from registration based in part on representations made by Francisco Partners and its affiliates. The information set forth in Item 1.01 above is incorporated by reference into this Item 3.02.
As of August 3, 2022, the Company agreed with its financial advisor, J. Wood Capital Advisors LLC, to settle its financial advisory fee for services provided in connection with the transactions in an amount equal to (i) the aggregate principal amount of debt issued or incurred by the Company, multiplied by (ii) 2.25%, where 50% of the fees will be in the form of shares of the Company’s common stock in lieu of such payment in cash, with such unregistered securities being issued in a private placement in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. The Company is relying on this exemption based in part on representations made by the financial advisor in its engagement letter and related share payment letter.
Item 8.01. Other Events.
On August 3, 2022, the Company issued a press release announcing entry into the Exchange Agreements. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference into this Item 8.01.
On August 3, 2022, the Company issued a press release announcing entry into the Credit Agreement. A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated by reference into this Item 8.02.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Description | |||||||
| 10.1 | ||||||||
| 10.2 | ||||||||
| 10.3 | ||||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | Cover Page Interactive Data File (embedded as Inline XBRL document) | |||||||
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.
Date: August 4, 2022
| 8X8, INC. | ||||||||
| By: /s/ Samuel Wilson | ||||||||
| Samuel Wilson | ||||||||
| Chief Financial Officer | ||||||||
August 3, 2022
8x8, Inc.
675 Creekside Way
Campbell, CA 95008
Attn: Samuel Wilson, Chief Financial Officer
Re: Exchange for 8x8 Inc. 4% Convertible Senior Notes due 2028
Ladies and Gentlemen:
8x8, Inc., a Delaware corporation (“8x8” or the “Company”), is offering the undersigned qualified investor (the “Investor”), on behalf of itself and each account listed on Exhibit A hereto (each, an “Account”) for whom the Investor has been duly authorized to enter into this agreement, the opportunity to subscribe to the New Notes by the means of an exchange (the “Exchange”) of certain 0.50% Convertible Senior Notes due 2024, CUSIP: 282914AB6 (the “Unrestricted Existing Notes”) and 282914AC4 (the “Restricted Existing Notes,” and together with the Unrestricted Existing Notes, the “Existing Notes”) for an amount of new notes (the “New Notes”), which will initially be represented by a restricted CUSIP, and cash, pursuant and subject to the terms and conditions set forth in this agreement (the “Exchange Agreement”). The Exchange Ratio (as defined below) applies to exchanges of Unrestricted Existing Notes and/or Restricted Existing Notes, in each case for New Notes. The Exchanging Holders may hold and exchange either or both Unrestricted Existing Notes or Restricted Existing Notes. Each participating Account, including the Investor if it is a beneficial owner listed on Exhibit A hereto, is referred to herein an “Exchanging Holder”.
The Investor, on behalf of itself and each Account, understands that the Exchange is being made without registration under the Securities Act of 1933, as amended (the “Securities Act”), or any securities laws of any state of the United States or of any other jurisdiction, and that the offer relating to the Exchange is only being made to investors who are each (i) an institutional “accredited investor” (as defined in Rule 501 of Regulation D under the Securities Act) (an "AI"), (ii) an institutional account (as defined in FINRA Rule 4512(c)) (an “IAI”) and (iii) a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) (a "QIB") in reliance upon a private placement exemption from registration under the Securities Act. The terms of the Exchange are set forth in (i) the pricing terms (the "Term Sheet") attached hereto as Annex A, (ii) the Indenture (the “New Indenture”), to be dated as of the Closing Date (as defined below), between the Company and Wilmington Trust, National Association (in such capacity, the “New Notes Trustee”), which will be in substantially the form attached as Exhibit D hereto and (iii) this Exchange Agreement (the “Exchange Agreement” and together with the Term Sheet and the New Indenture, the “Private Placement Documents”).
In connection with the issuance of the New Notes, the Company will repurchase shares of its common stock, par value $0.001 per share (the "Common Stock") from certain purchasers of the New Notes (the “Share Repurchase”).
1.The Exchange. Subject to the terms and conditions of this Exchange Agreement, the Investor, on behalf of itself and each participating Account, hereby agrees to exchange, and to cause each other Exchanging Holder to exchange, the aggregate principal amount (the “Exchanged Principal Amount”) of Existing Notes set forth next to such Exchanging Holder’s name in column 2 and column 3 of Exhibit A hereto (such principal amount of Restricted Existing Notes, the “Exchanged Restricted Existing Notes,” such principal amount of Unrestricted Old Notes, the “Exchanged Unrestricted Existing
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Notes,” and the Exchanged Restricted Existing Notes, together with the Exchanged Unrestricted Existing Notes, the “Exchanged Existing Notes”) for:
(a)New Notes having an aggregate principal amount, for each Exchanging Holder, equal to the product of the Exchange Ratio and the Exchanged Principal Amount (rounded down to the nearest integral multiple of $1,000 in principal amount, if applicable (the difference being referred to as the “Rounded Amount”)) (such aggregate principal amount of New Notes, as so rounded, if applicable, the “Exchanged New Notes”), and
(b)an amount of cash set forth in column 5 of Exhibit A hereto equal to the sum of (x) $450 multiplied by the Exchanged Principal Amount divided by $1,000, (y) an amount equal to the accrued and unpaid interest, if any, on the Exchanged Existing Notes from, and including, August 1, 2022, to, but excluding, the Closing Date, and (z) the Rounded Amount (such amount, together with the Rounded Amount, the “Company Exchange Payment Amount”).
The Company hereby agrees to (a) issue and deliver the aggregate principal amount of Exchanged New Notes for each Exchanging Holder to the Investor and (b) pay to the Investor the aggregate Company Exchange Payment Amount for each Exchanging Holder, in each case in the amounts set forth in Exhibit A hereto, in exchange for the Exchanged Existing Notes (such Exchanged New Notes and Company Exchange Payment Amount, the “Exchange Consideration”).
“Exchange Ratio” means a ratio equal to 0.5000 New Notes (each having a denomination of $1,000 principal amount) for each $1,000 principal amount of Existing Notes.
2.The Closing. The closing of the Exchange (the “Closing”) shall take place at the offices of Latham & Watkins LLP, 1271 Avenue of the Americas, New York, NY 10020 at 10:00 a.m., New York City time, on August 11, 2022, or at such other time and place as the Company may designate by notice to the Investor (the “Closing Date”).
3.The Terms of the Exchange; Closing Mechanics.
Subject to the terms and conditions of this Exchange Agreement, the Investor, on behalf of itself and each participating Account, hereby (a) sells, assigns and transfers to the Company, all right, title and interest in the Exchanged Existing Notes indicated on Exhibit A hereto, in satisfaction of the consideration for the Exchange Consideration, (b) waives any and all other rights with respect to such Exchanged Existing Notes, and (c) releases and discharges the Company from any and all claims the Investor may now have, or may have in the future, arising out of, or related to, such Exchanged Existing Notes.
(c)The Depository Trust Company (“DTC”) will act as securities depositary for the New Notes.
(d)At or prior to the times set forth in the Exchange Procedures set forth in Exhibit B hereto (the “Exchange Procedures”), the Investor shall deliver and/or cause the participating Accounts to deliver the Exchanged Existing Notes, by book entry transfer through the facilities of DTC, to Wilmington Trust, National Association, in its capacity as trustee of the Existing Notes (in such capacity, the “Existing
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Notes Trustee”), for the account/benefit of the Company for cancellation as instructed in the Exchange Procedures.
(e)On the Closing Date, subject to satisfaction of the conditions precedent specified in Section 7 hereof, and the prior receipt by the Existing Notes Trustee from the Exchanging Holders of the Exchanged Existing Notes:
i.the Company shall execute and deliver the New Indenture;
ii.the Company shall execute, cause the New Notes Trustee to authenticate and cause to be delivered to the DTC account(s) specified by the Investor pursuant to Section 9 hereof in substantially the form of Exhibit C hereto, the Exchanged New Notes; and
iii.the Company shall pay the Company Exchange Payment Amount to the account specified in the wire instructions specified by the Investor in Exhibit C hereto.
All questions as to the form of all documents and the validity and acceptance of the New Notes will be determined by the Company, in its reasonable discretion, which determination shall be final and binding.
4.Representations and Warranties of the Company. The Company represents and warrants to the Investor that:
(a)Organization. It is duly organized and is validly existing under the laws of its jurisdiction of organization.
(b)Due Authorization. This agreement has been duly authorized, executed and delivered by the Company.
(c)Authorization of New Notes. The New Notes have been duly authorized by the Company and, when issued, authenticated and delivered in accordance with the New Indenture and this Exchange Agreement and exchanged for Existing Notes in accordance with the terms hereof, the New Notes will be validly issued and will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except that the enforcement thereof may be subject to applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by equitable principles relating to enforceability (collectively, the “Enforceability Exceptions”).
(d)Authorization of Indenture. The New Indenture has been duly authorized by the Company and, when duly authorized, executed and delivered by the New Notes Trustee, will constitute a legal, valid and binding obligation of the Company, enforceable against the Company, in accordance with its terms, except that the enforcement thereof may be subject to the Enforceability Exceptions.
(e)Exemption from Registration. Assuming the accuracy of the representations and warranties of the Investor and each other investor executing any other exchange agreements in substantially the same form as this Exchange Agreement, (1) each of the issuance of the Exchanged New Notes in connection with the Exchange pursuant to this Exchange Agreement is exempt from the registration
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requirements of the Securities Act; and (2) the New Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended.
(f)New Class. The New Notes, when issued, will not be of the same class as securities listed on a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) within the meaning of Rule 144A(d)(3)(i) under the Securities Act.
(g)Taxes. (i) Each of the Company and its subsidiaries has paid all federal, state, local and foreign taxes and filed all tax returns required to be paid or filed through the date hereof or have requested extensions thereof (except for cases in which the failure to pay or file would not reasonably be expected to have a material adverse effect or except as currently being contested in good faith and for which reserves required by U.S. generally accepted accounting principles have been created in the financial statements of the Company); and (ii) there is no tax deficiency that has been, nor does the Company nor any of its subsidiaries have any notice or knowledge of any tax deficiency which would reasonably be expect to be asserted against the Company or any of its subsidiaries or any of their respective properties or assets, in each case, except as would not have a material adverse effect.
(h)Delegending. The Company hereby agrees and acknowledges that, promptly following (x) the Resale Restriction Termination Date, or (y) the satisfaction of all of the conditions to delegending set forth in Section 2.05(c) of the New Indenture with respect to any New Notes, it will use commercially reasonable efforts to (x) remove the 144A Legends (as defined below) from the relevant New Notes and (y) cause the relevant New Notes to be assigned (or deemed assigned) an unrestricted CUSIP. As of the date hereof, the Resale Restriction Termination Date (as defined in the New Indenture) with respect to the Exchanged New Notes is expected to occur on December 14, 2022.
(i)Share Repurchase. The Share Repurchase has been duly authorized by the Company.
(j)Current Public Information. As of the date hereof, the Company has filed all required reports (other than the Form 8-K reports) under Section 13 or Section 15(d) of the Exchange Act, as applicable, during the preceding twelve (12) months, and satisfies the current public information requirement set forth in Rule 144(c) under the Securities Act.
5.Representations and Warranties of the Investor. The Investor hereby represents and warrants to and covenants with the Company that:
(a)The Investor is a corporation, limited partnership, limited liability company or other entity, as the case may be, duly formed, validly existing and in good standing under the laws of the jurisdiction of its formation.
(b)The Investor has full power and authority to (i) subscribe for and purchase from the Company the Exchanged New Notes, (ii) exchange, sell, assign and transfer the Exchanged Existing Notes exchanged hereby and to enter into this Exchange Agreement and perform all obligations required to be performed by the Investor hereunder. If the Investor is executing this Exchange Agreement on behalf of an Account, (i) the Investor has all requisite authority to enter into this Exchange Agreement on behalf of, and, bind, each Account to the terms of this Agreement,
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and (ii) Exhibit A hereto is a true, correct and complete list of (A) the name of each Account participating in the Exchange and (B) the principal amount of each Account's Exchanged Existing Notes.
(c)Participation in the Exchange will not contravene (1) any law, rule or regulation binding on the Investor or any investment guideline or restriction applicable to the Investor (or, if applicable, the Accounts) and (2) the charter or bylaw (or equivalent organizational documents) of the Investor (or, if applicable, the Accounts).
(d)Each Exchanging Holder participating in the Exchange has been the beneficial owner of the Exchanged Existing Notes continuously since at least August 1, 2022, and is the current beneficial owner of the Exchanged Existing Notes. When the Exchanged Existing Notes are exchanged, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, encumbrances, adverse claims, rights or proxies.
(e)If the Investor is executing this Exchange Agreement on behalf of an Account, (i) the Investor has all requisite authority to enter into this Exchange Agreement on behalf of, and, bind, each Account to the terms of this Agreement, and (ii) Exhibit A hereto is a true, correct and complete list of (A) the name of each Account participating in the Exchange and (B) the principal amount of each Account's Exchanged Existing Notes.
(f)The Investor and each Account is a resident of the state specified by the Investor pursuant to Section 9 hereof in substantially the form of Exhibit C hereto and, unless otherwise set out in Exhibit A hereto, is not acquiring the Exchanged New Notes as a nominee or agent or otherwise for any other person.
(g)The Investor and each Account will comply with all applicable laws and regulations in effect in any jurisdiction in which the Investor or such Account purchases or acquires pursuant to the Exchange, or sells New Notes and will obtain any consent, approval or permission required for such purchases, acquisitions or sales under the laws and regulations of any jurisdiction to which the Investor or such Account is subject or in which the Investor or such Account makes such purchases, acquisitions or sales, and the Company shall not have any responsibility therefor.
(h)The Investor and each Account has received a copy of the Private Placement Documents. The Investor, on behalf of itself and each Account, acknowledges that: (1) no person has been authorized to give any information or to make any representation concerning the Exchange or the Company or any of its subsidiaries, other than as contained in the Private Placement Documents or in the information given by the Company’s duly authorized officers and employees in connection with the Investor’s examination of the Company and its subsidiaries and the terms of the Exchange; and (2) the Company and its subsidiaries do not take any responsibility for, and neither the Company nor any of its subsidiaries can provide any assurance as to the reliability of, any other information that may have been provided to the Investor. The Investor, on behalf of itself and each Account, hereby acknowledges that J. Wood Capital Advisors LLC (the “Placement Agent”) does not take any responsibility for, and can provide no assurance as to the reliability of, the information set forth in the Private Placement Documents or any such other information.
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(i)The Investor and each Account understands and accepts that acquiring the New Notes in the Exchange involves risks. The Investor and each Account has such knowledge, skill and experience in business, financial and investment matters that the Investor and each Account is capable of evaluating the merits and risks of the Exchange and an investment in the New Notes. With the assistance of its own professional advisors (to the extent that the Investor and each Account has deemed appropriate), the Investor and each Account has made its own legal, tax, accounting and financial evaluation of the merits and risks of an investment in the New Notes and the consequences of the Exchange and this Exchange Agreement. The Investor and each Account has considered the suitability of the New Notes as an investment in light of its own circumstances and financial condition, and the Investor and each Account is able to bear the risks associated with an investment in the New Notes.
(j)The Investor confirms that neither it nor any Account is relying on any communication (written or oral) of the Company or the Placement Agent or any of their respective agents or affiliates as investment advice or as a recommendation to participate in the Exchange and receive the New Notes pursuant to the terms hereof. It is understood that information provided in the Private Placement Documents, or by the Company or the Placement Agent or any of their respective agents or affiliates, shall not be considered investment advice or a recommendation with respect to the Exchange, and that none of the Company or the Placement Agent or any of their respective agents or affiliates is acting or has acted as an advisor to the Investor or any Account in deciding whether to participate in the Exchange.
(k)The Investor confirms, for itself and for each Account, that neither the Company nor the Placement Agent has (1) given any guarantee or representation as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an investment in the New Notes; or (2) made any representation to the Investor regarding the legality of an investment in the New Notes under applicable investment guidelines, laws or regulations. In deciding to participate in the Exchange, neither the Investor nor any Account is relying on the advice or recommendations of the Company or the Placement Agent, and the Investor and each Account has made its own independent decision that the investment in the New Notes is suitable and appropriate for the Investor or such Account.
(l)The Investor and each Account is a sophisticated participant in the transactions contemplated hereby and has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the New Notes, is experienced in investing in capital markets and is able to bear the economic risk of an investment in the New Notes. The Investor and each Account is familiar with the business and financial condition and operations of the Company and its subsidiaries and has conducted its own investigation of the Company and its subsidiaries and the New Notes and has consulted with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby. The Investor and each Account has had access to the Company’s filings with the Securities and Exchange Commission and such other information concerning the Company and its subsidiaries and the New Notes as it deems necessary to enable it to make an informed investment decision concerning
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the Exchange. The Investor and each Account understands that the Company may have not disclosed all information that the Investor or each Account may deem material to the making of an investment decision, and the Investor and each Account disclaims any obligation of the Company to disclose any such information. The Investor and each Account has been offered the opportunity to ask questions of the Company and its representatives and has received answers thereto as the Investor or such Account deems necessary to enable it to make an informed investment decision concerning the Exchange and the New Notes.
(m)The Investor and each Account understands that no federal, state, local or foreign agency has passed upon the merits or risks of an investment in the New Notes or made any finding or determination concerning the fairness or advisability of such investment.
(n)The Investor and each Account is an AI, an IAI and a QIB. The Investor, for itself and on behalf of each Account, agrees to furnish any additional information reasonably requested by the Company or any of their affiliates to assure compliance with applicable U.S. federal and state securities laws in connection with the Exchange.
(o)The Investor and each Account is not directly, or indirectly through one or more intermediaries, controlling or controlled by, or under direct or indirect common control with the Company and is not, and has not been for the immediately preceding three months, an “affiliate” (within the meaning of Rule 144 under the Securities Act) of the Company.
(p)The Investor and each Account is acquiring the New Notes solely for the Investor’s or such Account’s own beneficial account, or for an account with respect to which the Investor or such Account exercises sole investment discretion, for investment purposes, and not with a view to, or for resale in connection with, any distribution of the New Notes. The Investor and each Account understands that the offer and sale of the New Notes have not been registered under the Securities Act or any state securities laws by reason of specific exemptions under the provisions thereof that depend in part upon the investment intent of the Investor or each Account and the accuracy of the other representations made by the Investor and each Account in this Exchange Agreement.
(q)The Investor and each Account understands that the Company is relying upon the representations and agreements contained in this Exchange Agreement (and any supplemental information) for the purpose of determining whether the Investor’s and such Account’s participation in the Exchange meets the requirements for the exemptions referenced in clause (p) above. In addition, the Investor and each Account acknowledges and agrees that any hedging transactions engaged in by the Investor or such Account, including after the confidential information (as described in the confirmatory email received by the Investor from the Placement Agent (the “Wall Cross Email”)) is made public and prior to the Closing in connection with the issuance and sale of the New Notes, have been and will be conducted in compliance with the Securities Act and the rules and regulations promulgated thereunder.
(r)The Investor and each Account acknowledges that the New Notes, and any shares of Common Stock issuable upon conversion of the New Notes, have not been
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registered under the Securities Act. As a result, the New Notes and any shares of Common Stock issuable upon conversion of the New Notes may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act as described in Section 6 hereof and the Investor, for itself and on behalf of each Account, hereby agrees that neither it nor any Account will sell the New Notes other than in compliance with such transfer restrictions.
(s)The Investor and each Account acknowledges that the terms of the Exchange have been mutually negotiated between the Investor (for itself and on behalf of each Account) and the Company. The Investor was given a meaningful opportunity to negotiate the terms of the Exchange on behalf of itself and each Account.
(t)The Investor and each Account acknowledges the Company intends to pay a placement agent fee to the Placement Agent in respect of the Exchange.
(u)The Investor will, for itself and on behalf of each Account, upon request, execute and deliver any additional documents, information or certifications reasonably requested by the Company, the Existing Notes Trustee or the New Notes Trustee to complete the Exchange.
(v)The Investor and each Account understands that each of the Investor’s representations and warranties contained in this Exchange Agreement will be deemed to have been reaffirmed and confirmed as of the Closing, taking into account all information received by the Investor.
(w)The Investor acknowledges that it and each Account had a sufficient amount of time to consider whether to participate in the Exchange and that neither the Company nor the Placement Agent has placed any pressure on the Investor or any Account to respond to the opportunity to participate in the Exchange. The Investor acknowledges that neither it nor any Account became aware of the Exchange through any form of general solicitation or advertising within the meaning of Rule 502 under the Securities Act.
(x)The operations of the Investor and each Account have been conducted in material compliance with the rules and regulations administered or conducted by the U.S. Department of Treasury Office of Foreign Assets Control (“OFAC”) applicable to the Investor. The Investor has performed due diligence necessary to reasonably determine that its and Account’s beneficial owners are not named on the lists of denied parties or blocked persons administered by OFAC, resident in or organized under the laws of a country that is the subject of comprehensive economic sanctions and embargoes administered or conducted by OFAC (“Sanctions”), or otherwise the subject of Sanctions.
(y)Investor and each Account acknowledges and agrees that no public market exists for the New Notes and that there is no assurance that a public market will ever develop for the New Notes. In addition, the Investor acknowledges that the New Notes and any shares of Common Stock issuable upon conversion of the New Notes will initially bear restrictive legends in the applicable form set forth in Section 2.05(c) of the New Indenture (the “144A Legends”) and that any resales or transfers of the New Notes or shares of Common Stock issuable upon conversion thereof shall comply with such requirement. Notwithstanding that an
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Exchanging Holder may hold Unrestricted Existing Notes, any New Notes issued in exchange for such Unrestricted Existing Notes, and any shares of Common Stock issuable upon conversion thereof, will initially be represented by a restricted CUSIP number and will bear the 144A Legends.
(z)Investor and each Account do not beneficially own more than 4.9% of the Common Stock.
6.Transfer Restrictions. The Company and Investor hereby agree and acknowledge to be bound by the transfer restriction provisions set forth in Section 2.05(c) of the New Indenture.
7.Conditions to Obligations of the Investor and the Company. The obligations of the Investor to deliver, or to cause an Exchanging Holder to deliver, the Exchanged Existing Notes and of the Company to deliver the New Notes are subject to the satisfaction at or prior to the Closing of the condition precedent that (x) the representations and warranties of the Company on the one hand, and of the Investor on the other, contained in Sections 4 and 5 hereof, respectively, shall be true and correct as of the Closing in all material respects with the same effect as though such representations and warranties had been made as of the Closing and (y) the Company has agreed with one or more purchasers of the New Notes to repurchase at least $60 million aggregate amount of Shares in the Share Repurchase.
8.Covenant and Acknowledgment of the Company. At or prior to 9:30 a.m., New York City time, on the first business day after the date hereof, the Company shall issue a press release announcing the Exchange, which press release the Company acknowledges and agrees will disclose all confidential information (as described in the Wall Cross Email) to the extent the Company believes such confidential information constitutes material non-public information, if any, communicated by the Company to the Investor in connection with the Exchange.
9.Covenant of the Investor. No later than one (1) business day after the date hereof, the Investor agrees to deliver its settlement instructions and provide such other information for each Account to the Company substantially in the form of Exhibit C hereto.
10.Waiver, Amendment. Neither this Exchange Agreement nor any provisions hereof shall be modified, changed, discharged or terminated except by an instrument in writing, signed by the party against whom any waiver, change, discharge or termination is sought.
11.Assignability. Neither this Exchange Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Company or the Investor without the prior written consent of the other parties.
12.Waiver of Jury Trial. THE COMPANY AND THE INVESTOR (ON BEHALF OF ITSELF AND EACH ACCOUNT) IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS EXCHANGE AGREEMENT.
13.Governing Law. THIS EXCHANGE AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK.
9
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14.Submission to Jurisdiction. Each of the Company and the Investor (for itself and on behalf of each Account) (a) agrees that any legal suit, action or proceeding arising out of or relating to this agreement or the transactions contemplated hereby shall be instituted exclusively in the courts of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York; (b) waives any objection that it may now or hereafter have to the venue of any such suit, action or proceeding; and (c) irrevocably consents to the jurisdiction of the aforesaid courts in any such suit, action or proceeding. Each of the Company and the Investor (for itself and on behalf of each Account) agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
15.Venue. Each of the Company and the Investor (for itself and on behalf of each Account) irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Exchange Agreement in any court referred to in Section 14 hereof. Each of the Company and the Investor (for itself and on behalf of each Account) irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
16.Service of Process. Each of the Company and the Investor (for itself and on behalf of each Account) irrevocably consents to service of process in the manner provided for notices in Section 19 hereof. Nothing in this Exchange Agreement will affect the right of any party to this Exchange Agreement to serve process in any other manner permitted by law.
17.Section and Other Headings. The section and other headings contained in this Exchange Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Exchange Agreement.
18.Counterparts. This Exchange Agreement may be executed by one or more of the parties hereto in any number of separate counterparts (including by facsimile or other electronic means, including telecopy, email or otherwise), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Exchange Agreement by facsimile or other transmission (e.g., “pdf” or “tif” format) shall be effective as delivery of a manually executed counterpart hereof. The words "execution", "signed", "signature", and words of similar import in this Exchange Agreement shall be deemed to include electronic or digital signatures or the keeping of records in electronic form, each of which shall be of the same effect, validity, and enforceability as manually executed signatures or a paper-based record keeping system, as the case may be, to the extent and as provided for under applicable law, including the Electronic Signatures in Global and National Commerce Act of 2000 (15 U.S.C. §§ 7001-7006), the Electronic Signatures and Records Act of 1999 (N.Y. State Tech. Law §§ 301-309), or any other similar state laws based on the Uniform Electronic Transactions Act.
19.Notices. All notices and other communications provided for herein shall be in writing and shall be deemed to have been duly given if delivered personally or sent by registered or
10
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certified mail, return receipt requested, postage prepaid to the following addresses (or such other address as either party shall have specified by notice in writing to the other):
| If to the Company: | |||||
8x8, Inc. 675 Creekside Way Campbell, CA 95008 Attn: Samuel Wilson, Chief Financial Officer | |||||
If to the Investor or any Account:
The address specified by the Investor pursuant to Section 9 hereof in substantially the form of Exhibit C hereto.
20.Binding Effect. The provisions of this Exchange Agreement shall be binding upon and accrue to the benefit of the parties hereto and their respective heirs, legal representatives, successors and permitted assigns.
21.Notification of Changes. The Investor (for itself and on behalf of each Account) hereby covenants and agrees to notify the Company upon the occurrence of any event prior to the Closing that would cause any representation, warranty, or covenant of the Investor contained in this Exchange Agreement to be false or incorrect in any material respect.
22.Reliance by Placement Agent. The Placement Agent may rely on each representation and warranty of the Company and the Investor made herein or pursuant to the terms hereof (including, without limitation, in any officer’s certificate delivered pursuant to the terms hereof) with the same force and effect as if such representation or warranty were made directly to the Placement Agent. The Placement Agent shall be a third party beneficiary to this Exchange Agreement to the extent provided in this Section 22.
23.Severability. If any term or provision (in whole or in part) of this Exchange Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Exchange Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.
[Signature Pages Follow]
11
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IN WITNESS WHEREOF, the Investor has executed this Exchange Agreement as of the date first written above.
The Investor: | |||||||||||
| By | |||||||||||
| Name: | |||||||||||
| Title: | |||||||||||
| Legal Name of Investor: | |||||||||||
[Signature Page to Exchange Agreement]
|||
ACCEPTED AND AGREED:
8x8, Inc. as the Company | |||||
By | |||||
Name: Samuel Wilson | |||||
Title: Chief Financial Officer | |||||
[Signature Page to Exchange Agreement]
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EXHIBIT A TO THE EXCHANGE AGREEMENT
The Exchange Ratio: ____________
1 | 2 | 3 | 4 | 5 | ||||||||||
Name of Exchanging Holder | Aggregate Principal Amount of Exchanged Restricted Existing Notes | Aggregate Principal Amount of Exchanged Unrestricted Existing Notes | Aggregate Principal Amount of Exchanged New Notes | Company Exchange Payment Amount | ||||||||||
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EXHIBIT B TO THE EXCHANGE AGREEMENT
NOTICE OF EXCHANGE PROCEDURES
Attached are Investor Exchange Procedures for the settlement of the 8x8, Inc. (the “Company”) exchange of its 4]% Convertible Senior Notes due 2028 (the “New Notes”) pursuant to the Exchange Agreement, dated as of August 3, 2022, between you and the Company which is expected to occur on or about August 11, 2022. To ensure timely settlement, please follow the instructions for subscribing for your New Notes as set forth on the following page.
These instructions supersede any prior instructions you received. Your failure to comply with the attached instructions may delay your receipt of the New Notes.
If you have any questions, please contact Ed Collins at (408) 691-8384.
Thank you.
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CLOSING PROCEDURES To receive your New Notes: You must BOTH: 1.Direct the eligible DTC participant through which you hold a beneficial interest of the the Existing Notes to post and accept, on August 11, 2022, no later than 9:00 a.m. New York City time, one-sided withdrawal instructions through DTC via DWAC for the transfer to Wilmington Trust, National Association, for the aggregate principal amount1 of Exchanged Existing Notes (CUSIP # 282914AB6 and/or 282914AC4, as applicable) set forth in column 2 and column 3 of Exhibit A to your Exchange Agreement. It is important that this instruction be submitted and the DWAC posted on August 11, 2022. 2.No later than 9:00 a.m., New York City time, on August 11, 2022, you must direct your eligible DTC participant through which you wish to hold a beneficial interest in the New Notes to post and accept a one-sided deposit instruction through DTC via DWAC for the transfer from Wilmington Trust, National Association, for the aggregate principal amount2 of Exchanged New Notes (CUSIP # 282914AD2) set forth in column 4 of Exhibit A to your Exchange Agreement. You must complete BOTH steps described above in order to complete the exchange of Existing Notes for New Notes. | ||
1 Note that the DWAC instruction should specify the principal amount, not the number, of Exchanged Existing Notes.
2 Note that the DWAC instruction should specify the principal amount, not the number, of New Notes.
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Settlement On August 11, 2022, after the Company receives your Exchanged Existing Notes and your delivery instructions as set forth above, and subject to the satisfaction of the conditions to closing as set forth in your Exchange Agreement, the Company will deliver your New Notes in accordance with the delivery instructions set forth above. | ||
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EXHIBIT C TO THE EXCHANGE AGREEMENT
Investor Settlement Details
These settlement instructions are to be delivered to the Company no later than one (1) business day after the date of the Exchange Agreement.
Name of Investor:
Investor Address:
Telephone:
Email Address:
Country of Residence:
Taxpayer Identification Number:
Settlement Contact Name:
Jurisdiction of Organization:
Exchanged Existing Notes
DTC Participant Number:
DTC Participant Name:
DTC Participant Phone Number:
DTC Participant Contact Email:
FFC Account #:
Account # at Bank/Broker:
For Delivery of Exchanged New Notes (if different from Exchanged Existing Notes)
DTC Participant Number:
DTC Participant Name:
DTC Participant Phone Number:
DTC Participant Contact Email:
FFC Account #:
|||
Account # at Bank/Broker:
For Delivery of Company Exchange Payment Amount:
Bank Name:
Bank Address:
BIC:
ABA:
Beneficiary:
Reference:
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EXHIBIT D TO THE EXCHANGE AGREEMENT
New Indenture
|||
8X8, INC.
and
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
INDENTURE
Dated as of August 11, 2022
4.00% Convertible Senior Notes due 2028
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TABLE OF CONTENTS
PAGE
Article 1 Definitions | |||||
Section 1.01. Definitions 1 | |||||
Section 1.02. References to Interest 12 | |||||
| Article 2 Issue, Description, Execution, Registration and Exchange of Notes | |||||
Section 2.01. Designation and Amount 13 | |||||
Section 2.02. Form of Notes 13 | |||||
Section 2.03. Date and Denomination of Notes; Payments of Interest and Defaulted Amounts 14 | |||||
Section 2.04. Execution, Authentication and Delivery of Notes 15 | |||||
Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary 16 | |||||
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes 22 | |||||
Section 2.07. Temporary Notes 23 | |||||
Section 2.08. Cancellation of Notes Paid, Converted, Etc. 24 | |||||
Section 2.09. CUSIP Numbers 24 | |||||
Section 2.10. Additional Notes; Repurchases 24 | |||||
| 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 25 | |||||
Section 4.02. Maintenance of Office or Agency 25 | |||||
Section 4.03. Appointments to Fill Vacancies in Trustee’s Office 26 | |||||
Section 4.04. Provisions as to Paying Agent 26 | |||||
Section 4.05. Existence 27 | |||||
Section 4.06. Rule 144A Information Requirement and Annual Reports 27 | |||||
Section 4.07. Stay, Extension and Usury Laws 29 | |||||
Section 4.08. Compliance Certificate; Statements as to Defaults 29 | |||||
Section 4.09. Further Instruments and Acts 29 | |||||
| Article 5 Lists of Holders and Reports by the Company and the Trustee | |||||
Section 5.01. Lists of Holders 30 | |||||
Section 5.02. Preservation and Disclosure of Lists 30 | |||||
| Article 6 Defaults and Remedies | |||||
Section 6.01. Events of Default 30 | |||||
Section 6.02. Acceleration; Rescission and Annulment 31 | |||||
Section 6.03. Additional Interest 32 | |||||
Section 6.04. Payments of Notes on Default; Suit Therefor 33 | |||||
Section 6.05. Application of Monies Collected by Trustee 35 | |||||
Section 6.06. Proceedings by Holders 35 | |||||
Section 6.07. Proceedings by Trustee 36 | |||||
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Section 6.08. Remedies Cumulative and Continuing 36 | |||||
Section 6.09. Direction of Proceedings and Waiver of Defaults by Majority of Holders 37 | |||||
Section 6.10. Notice of Defaults 37 | |||||
Section 6.11. Undertaking to Pay Costs 37 | |||||
| Article 7 Concerning the Trustee | |||||
Section 7.01. Duties and Responsibilities of Trustee 38 | |||||
Section 7.02. Reliance on Documents, Opinions, Etc. 40 | |||||
Section 7.03. No Responsibility for Recitals, Etc. 41 | |||||
Section 7.04. Trustee, Paying Agents, Conversion Agents, Bid Solicitation Agent or Note Registrar May Own Notes 41 | |||||
Section 7.05. Monies and Shares of Common Stock to Be Held in Trust 41 | |||||
Section 7.06. Compensation and Expenses of Trustee 41 | |||||
Section 7.07. Officer’s Certificate as Evidence 42 | |||||
Section 7.08. Eligibility of Trustee 42 | |||||
Section 7.09. Resignation or Removal of Trustee 43 | |||||
Section 7.10. Acceptance by Successor Trustee 44 | |||||
Section 7.11. Succession by Merger, Etc. 44 | |||||
Section 7.12. Trustee’s Application for Instructions from the Company 45 | |||||
| Article 8 Concerning the Holders | |||||
Section 8.01. Action by Holders 45 | |||||
Section 8.02. Proof of Execution by Holders 45 | |||||
Section 8.03. Who Are Deemed Absolute Owners 46 | |||||
Section 8.04. Company-Owned Notes Disregarded 46 | |||||
Section 8.05. Revocation of Consents; Future Holders Bound 46 | |||||
| Article 9 Holders’ Meetings | |||||
Section 9.01. Purpose of Meetings 47 | |||||
Section 9.02. Call of Meetings by Trustee 47 | |||||
Section 9.03. Call of Meetings by Company or Holders 47 | |||||
Section 9.04. Qualifications for Voting 48 | |||||
Section 9.05. Regulations 48 | |||||
Section 9.06. Voting 48 | |||||
Section 9.07. No Delay of Rights by Meeting 49 | |||||
| Article 10 Supplemental Indentures | |||||
Section 10.01. Supplemental Indentures Without Consent of Holders 49 | |||||
Section 10.02. Supplemental Indentures with Consent of Holders 50 | |||||
Section 10.03. Effect of Supplemental Indentures 51 | |||||
Section 10.04. Notation on Notes 51 | |||||
Section 10.05. Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee 52 | |||||
| Article 11 Consolidation, Merger, Sale, Conveyance and Lease | |||||
Section 11.01. Company May Consolidate, Etc. on Certain Terms 52 | |||||
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Section 11.02. Successor Corporation to Be Substituted 52 | |||||
Section 11.03. Opinion of Counsel to Be Given to Trustee 53 | |||||
| Article 12 Immunity of Incorporators, Stockholders, Officers and Directors | |||||
Section 12.01. Indenture and Notes Solely Corporate Obligations 53 | |||||
| Article 13 Intentionally Omitted | |||||
| Article 14 Conversion of Notes | |||||
Section 14.01. Conversion Privilege 54 | |||||
Section 14.02. Conversion Procedures; Settlement Upon Conversion 56 | |||||
Section 14.03. Increased Conversion Rate Applicable to Certain Notes Surrendered in Connection with Make-Whole Fundamental Changes or During a Redemption Period 61 | |||||
Section 14.04. Adjustment of Conversion Rate 63 | |||||
Section 14.05. Adjustments of Prices 72 | |||||
Section 14.06. Shares to Be Fully Paid 72 | |||||
Section 14.07. Effect of Recapitalizations, Reclassifications and Changes of the Common Stock 73 | |||||
Section 14.08. Certain Covenants 75 | |||||
Section 14.09. Responsibility of Trustee 75 | |||||
Section 14.10. Notice to Holders Prior to Certain Actions 76 | |||||
Section 14.11. Stockholder Rights Plans 76 | |||||
| Article 15 Repurchase of Notes at Option of Holders | |||||
Section 15.01. Intentionally Omitted 76 | |||||
Section 15.02. Repurchase at Option of Holders Upon a Fundamental Change 76 | |||||
Section 15.03. Withdrawal of Fundamental Change Repurchase Notice 79 | |||||
Section 15.04. Deposit of Fundamental Change Repurchase Price 80 | |||||
Section 15.05. Covenant to Comply with Applicable Laws Upon Repurchase of Notes 81 | |||||
| Article 16 OPTIONAL REDEMPTION | |||||
Section 16.01. Optional Redemption 81 | |||||
Section 16.02. Notice of Optional Redemption; Selection of Notes 81 | |||||
Section 16.03. Payment of Notes Called for Redemption 83 | |||||
Section 16.04. Restrictions on Redemption 83 | |||||
| Article 17 Miscellaneous Provisions | |||||
Section 17.01. Provisions Binding on Company’s Successors 83 | |||||
Section 17.02. Official Acts by Successor Corporation 83 | |||||
Section 17.03. Addresses for Notices, Etc. 83 | |||||
Section 17.04. Governing Law; Jurisdiction 84 | |||||
Section 17.05. Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee 85 | |||||
Section 17.06. Legal Holidays 85 | |||||
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Section 17.07. No Security Interest Created 85 | |||||
Section 17.08. Benefits of Indenture 86 | |||||
Section 17.09. Table of Contents, Headings, Etc. 86 | |||||
Section 17.10. Authenticating Agent 86 | |||||
Section 17.11. Execution in Counterparts 87 | |||||
Section 17.12. Severability 87 | |||||
Section 17.13. Waiver of Jury Trial 87 | |||||
Section 17.14. Force Majeure 87 | |||||
Section 17.15. Calculations 87 | |||||
Section 17.16. U.S.A. PATRIOT Act 88 | |||||
Section 17.17. Tax Withholding 88 | |||||
EXHIBIT
Exhibit A Form of Note A-1
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INDENTURE, dated as of August 11, 2022 between 8X8, INC., a Delaware corporation, as issuer (the “Company”, as more fully set forth in Section 1.01) and WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association, as trustee (the “Trustee”, as more fully set forth in Section 1.01).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issuance of its 4.00% Convertible Senior Notes due 2028 (the “Notes”), initially in an aggregate principal amount not to exceed $201,914,000, 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 and binding 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:
1.
Definitions
Definitions
Section 1.0a.Definitions. The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. The words “herein,” “hereof,” “hereunder,” and words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. The terms defined in this Article include the plural as well as the singular.
“Additional Interest” means all amounts, if any, payable pursuant to Section 4.06(d), Section 4.06(e) and Section 6.03, as applicable.
“Additional Shares” shall have the meaning specified in Section 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
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foregoing. Notwithstanding anything to the contrary herein, the determination of whether one Person is an “Affiliate” of another Person for purposes of this Indenture shall be made based on the facts at the time such determination is made or required to be made, as the case may be, hereunder.
“Aggregate Notional Principal Amount” means $201,914,000.
“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 (or in connection with any payment, the place of payment) is authorized or required by law or executive order to close or be closed.
“Cap Percentage” means 19.9%.
“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 unless and until such debt securities are converted into or exchanged for Capital Stock (and only to the extent Capital Stock is issued upon any such conversion or exchange), as applicable.
“Capped Combination Floor Amount” means, the lowest possible Specified Dollar Amount in respect of any conversion to which Capped Combination Settlement is applicable, to be specified in the Settlement Notice related to any converted Notes (or deemed specified pursuant to Section 14.02(a)).
“Capped Combination Settlement” means Combination Settlement where the Specified Dollar Amount is equal to the Capped Combination Settlement Specified Dollar Amount.
Capped Combination Settlement Specified Dollar Amount” means, on any Trading Day during the relevant Observation Period, the greater of (x) the Capped Combination Floor Amount and (y) an amount equal to:
O x (DCV – (DC x VWAP))
where:
O = 40;
DCV = the Daily Conversion Value on such Trading Day;
DC = the Daily Share Cap on such Trading Day; and
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VWAP = the Daily VWAP on such Trading Day.
“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).
“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 any of its Officers.
“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).
“Conversion Share Cap” means (x) a number of shares of Common Stock equal to the Cap Percentage of the Common Stock outstanding on the date hereof, which is 119,964,673, minus (y) the number of shares of Common Stock underlying the Warrant, which is 3,100,000, plus (z) 20,447,337, as proportionally adjusted for share splits, share combination and dividends paid in shares.1
“Corporate Trust Office” means the designated office of the Trustee at which at any time this Indenture shall be administered, which office at the date hereof is located at 50 South Sixth Street, Suite 1290, Minneapolis, MN 55402, Attention: 8x8 Inc., Account Manager or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the designated corporate trust office of any successor trustee (or such other address
1 Note To Draft: To be deleted if not required.
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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 40 consecutive Trading Days during the relevant Observation Period, 2.5% of the product of (a) the Conversion Rate on such Trading Day and (b) the Daily VWAP for such Trading Day.
“Daily Measurement Value” means the Specified Dollar Amount (if any), divided by 40.
“Daily Settlement Amount,” for each of the 40 consecutive Trading Days during the relevant 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 Share Cap” means a number of shares of Common Stock, rounded down to the nearest 1/10,000th of a share, equal to:
where:
AC = the Remaining Share Cap;
O = 40; and
N = the Remaining Notional Principal Amount.
“Daily VWAP” means the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “EGHT <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of the Common Stock on such Trading Day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company). The “Daily VWAP” shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
“Default” means any event that is, or after notice or passage of time, or both, would be, an Event of Default.
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“Default Settlement Method” has the meaning specified in Section 14.02(a)(iii).
“Defaulted Amounts” means any amounts on any Note (including, without limitation, the Redemption Price, the Fundamental Change Repurchase Price, principal and interest) that are payable but are not punctually paid or duly provided for.
“delivered”, “given”, “mailed”, “notify”, or “sent”, with respect to any notice to be delivered, given or mailed to a Holder pursuant to this Indenture, shall mean notice (x) given to the Depositary (or its designee) pursuant to the standing instructions from the Depositary or its designee, including by electronic mail in accordance with accepted practices or procedures at the Depositary (in the case of a Global Note) or (y) mailed to such Holder by first class mail, postage prepaid, at its address as it appears on the Note Register (in the case of a Physical Note), in each case in accordance with Section 17.03. Notice so “delivered” shall be deemed to include any notice to be “mailed” or “given,” as applicable, under this Indenture.
“Depositary” means, with respect to each Global Note, the Person specified in Section 2.05(c) as the Depositary with respect to such Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter, “Depositary” shall mean or include such successor.
“Distributed Property” shall have the meaning specified in Section 14.04(c).
“Effective Date” shall have the meaning specified in Section 14.03(c), except that, as used in Section 14.04 and Section 14.05, “Effective Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, reflecting the relevant share split or share combination, as applicable.
“Event of Default” shall have the meaning specified in Section 6.01.
“Ex-Dividend Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question, from the Company or, if applicable, from the seller of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Form of Assignment and Transfer” shall mean 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” shall mean the “Form of Fundamental Change Repurchase Notice” attached as Attachment 2 to the Form of Note attached hereto as Exhibit A.
“Form of Note” shall mean the “Form of Note” attached hereto as Exhibit A.
“Form of Notice of Conversion” shall mean the “Form of Notice of Conversion” attached as Attachment 1 to the Form of Note attached hereto as Exhibit A.
“Fundamental Change” shall be deemed to have occurred at the time after the Notes are originally issued if any of the following occurs prior to the Maturity Date:
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c.a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than the Company, its Wholly Owned Subsidiaries and the employee benefit plans of the Company and its Wholly Owned Subsidiaries, 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 Stock representing more than 50% of the voting power of the Common Stock;
d.the consummation of (A) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination or solely a change in par value) as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets; (B) any share exchange, consolidation or merger of the Company pursuant to which the Common Stock will be converted into cash, 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 or more of the Company’s Wholly Owned Subsidiaries; provided, however, that a transaction described in clause (B) in which the holders of all classes of the Company’s Common Equity immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of Common Equity of the continuing or surviving corporation or transferee or the parent thereof immediately after such transaction in substantially the same proportions (relative to each other) as such ownership immediately prior to such transaction shall not be a Fundamental Change pursuant to this clause (b);
e.the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; or
f.the Common Stock 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 clauses (a) or (b) above shall not constitute a Fundamental Change if at least 90% of the consideration received or to be received by the common stockholders of the Company, excluding cash payments for fractional shares and cash payments made in respect of dissenters’ statutory appraisal 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’ statutory appraisal rights (subject to the provisions of Section 14.02). If any transaction in which the Common Stock is replaced by the securities of another entity occurs, following completion of any related Make-Whole Fundamental Change Period (or, in the case of a transaction that would have been a Fundamental Change or a Make-Whole Fundamental Change but for the proviso immediately following clause (d) of this definition, following the effective date of such transaction) references to the Company in this definition shall instead be references to such other entity.
For purposes of this definition of “Fundamental Change” above, any transaction that constitutes a Fundamental Change pursuant to both clause (a) and clause (b) of such definition (without giving effect to the proviso in clause (b)) shall be deemed a Fundamental Change solely under clause (b) of such definition (subject to the proviso in clause (b)).
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“Fundamental Change Company Notice” shall have the meaning specified in Section 15.02(c).
“Fundamental Change Repurchase Date” shall have the meaning specified in Section 15.02(a).
“Fundamental Change Repurchase Notice” shall have the meaning specified in Section 15.02(b)(i).
“Fundamental Change Repurchase Price” shall have the meaning specified in Section 15.02(a).
“Global Note” shall have the meaning specified in Section 2.05(b).
“Holder,” as applied to any Note, or other similar terms, shall mean 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.
“Interest Payment Date” means each February 1 and August 1 of each year, beginning on February 1, 2023.
“Last Reported Sale Price” of the Common Stock (or other security for which a closing sale price must be determined) on any date means the closing sale price per share (or if no closing sale price is reported, the average of the last bid and last ask prices per share or, if more than one in either case, the average of the average last bid and the average last ask prices per share) on that date as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock (or such other security) is traded. If the Common Stock (or such other security) 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 per share for the Common Stock (or such other security) in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization. If the Common Stock (or such other security) is not so quoted, the “Last Reported Sale Price” shall be the average of the mid-point of the last bid and last ask prices per share for the Common Stock (or such other security) on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose. The “Last Reported Sale Price” shall be determined without regard to after-hours trading or any other trading outside of the regular trading session hours.
“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
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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 February 1, 2028.
“Measurement Period” shall have the meaning specified in Section 14.01(b)(i).
“Merger Event” shall have the meaning specified in Section 14.07(a).
“Note” or “Notes” shall have the meaning specified in the first paragraph of the recitals of this Indenture.
“Note Register” shall have the meaning specified in Section 2.05(a).
“Note Registrar” shall have the meaning specified in Section 2.05(a).
“Notice of Conversion” shall have the meaning specified in Section 14.02(b).
“Notice of Default” means a written notice of any Default or Event of Default under this Indenture given to a Responsible Officer of the Trustee by (x) the Company or (y) the Holders of at least 25% in aggregate principal amount of the Notes then outstanding determined in accordance with Section 8.04. Any such Notice of Default shall reference the Notes and/or this Indenture and (other than with respect to any Default or Event of Default pursuant to Section 6.01(a)- (c)) shall state that it is a notice of Default or Event of Default.
“Observation Period” with respect to any Note surrendered for conversion means: (i) subject to clause (ii), if the relevant Conversion Date occurs prior to November 15, 2027, the 40 consecutive Trading Day period beginning on, and including, the second Trading Day immediately succeeding such Conversion Date; (ii) subject to clause (iii), if the relevant Conversion Date occurs during a Redemption Period pursuant to Section 16.02, the 40 consecutive Trading Days beginning on, and including, the 41st Scheduled Trading Day immediately preceding the relevant Redemption Date; and (iii) if the relevant Conversion Date occurs on or after November 15, 2027, the 40 consecutive Trading Days beginning on, and including, the 41st Scheduled Trading Day immediately preceding the Maturity Date.
“Officer” means, with respect to the Company, the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting Officer, the General Counsel, the Treasurer, the Secretary or any President or Vice President appointed by the Board of Directors as an officer of the Company (whether or not designated by a number or numbers or word or words added before or after the title “President” or “Vice President”).
“Officer’s Certificate,” when used with respect to the Company, means a certificate that is delivered to the Trustee and that is signed by an Officer of the Company. Each such certificate shall include the statements provided for in Section 17.05 if and to the extent required by the provisions of such Section. 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 an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company, or other counsel who is reasonably acceptable to the Trustee, that is delivered 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
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provided for in Section 17.05 if and to the extent required by the provisions of such Section 17.05.
“Optional Redemption” shall have the meaning specified in Section 16.01.
“outstanding,” when used with reference to Notes, shall, subject to the provisions of Section 8.04, mean, as of any particular time, all Notes authenticated and delivered by the Trustee under this Indenture, except:
g.Notes theretofore canceled by the Trustee or accepted by the Trustee for cancellation;
h.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);
i.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;
j.Notes converted pursuant to Article 14 and required to be cancelled pursuant to Section 2.08;
k.Notes redeemed pursuant to Article 16; and
l.Notes repurchased by the Company pursuant to the penultimate sentence of Section 2.10.
“Paying Agent” shall, subject to Article 15 in respect of a Fundamental Change, 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 minimum denominations of $1,000 principal amount and 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
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security) entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors, by statute, by contract or otherwise).
“Redemption Date” shall have the meaning specified in Section 16.02(a).
“Redemption Notice” shall have the meaning specified in Section 16.02(a).
“Redemption Notice Date” means the date on which a Redemption Notice is delivered pursuant to Section 16.02.
“Redemption Period” means the period from, and including, the relevant Redemption Notice Date until the close of business on the second Scheduled Trading Day immediately preceding the related Redemption Date.
“Redemption Price” means, for any Notes to be redeemed pursuant to Section 16.01, 100% of the principal amount of such Notes, plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date (unless the Redemption Date falls after a Regular Record Date but on or prior to the immediately succeeding Interest Payment Date, in which case interest accrued to the Interest Payment Date will be paid to Holders of record of such Notes as of the close of business on such Regular Record Date, and the Redemption Price will be equal to 100% of the principal amount of such Notes).
“Reference Property” shall have the meaning specified in Section 14.07(a).
“Regular Record Date,” with respect to any Interest Payment Date, shall mean the January 15 or July 15 (whether or not such day is a Business Day) immediately preceding the applicable February 1 or August 1 Interest Payment Date, respectively.
“Remaining Notional Principal Amount” shall mean the Aggregate Notional Principal Amount as reduced by (i) the principal amount of any Notes repurchased, converted or redeemed and (ii) the principal amount of any Notes in respect of which a Conversion Date has occurred and the Company has validly elected, or been deemed to elect, a settlement method.
“Remaining Share Cap” shall mean the Conversion Share Cap as reduced by (i) the aggregate number of shares of Common Stock delivered to any converting Holders and (ii) the maximum number of shares of Common Stock that could be delivered to Holders in respect of any Notes for which a Conversion Date has occurred and the Company has validly elected, or been deemed to elect, a settlement method.
“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 Office, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter relating to this Indenture is referred because of such person’s knowledge of and familiarity with the particular subject and who, in each case, 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.
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“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 Article 1, Rule 1-02 of Regulation S-X promulgated by the Commission.
“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 (or deemed specified pursuant to Section 14.02(a)).
“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, except for determining amounts due upon conversion as set forth below, 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 New York Stock Exchange or, if the Common Stock (or such other security) is not then listed on The New York Stock Exchange, 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 closing sale price for such other security) is available on such securities exchange or market; provided that if the Common Stock (or such other security) is not so listed or traded, “Trading Day” means a Business Day; 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 New York Stock Exchange or, if the Common Stock is not then listed on The New York Stock
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Exchange, 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 $5,000,000 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 $5,000,000 principal amount of Notes from a nationally recognized securities dealer on any determination date, then the Trading Price per $1,000 principal amount of Notes 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 such date of determination.
“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).
“Warrant” means, collectively, each Warrant to Purchase Common Stock, issued by the Company to each of (i) FP Credit Partners II, L.P., (ii) FP Credit Partners Phoenix II, L.P., (iii) FP Credit Partners, L.P. and (iv) FP Credit Partners Phoenix, L.P., respectively, effective as of August 3, 2022.
“Wholly Owned Subsidiary” means, with respect to any Person, any Subsidiary of such Person, except that, solely for purposes of this definition, the reference to “more than 50%” in the definition of “Subsidiary” shall be deemed replaced by a reference to “100%.”
Section 1.0b.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.
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2.
Issue, Description, Execution, Registration and Exchange of Notes
Issue, Description, Execution, Registration and Exchange of Notes
Section 1.0a.Designation and Amount. The Notes shall be designated as the “4.00% Convertible Senior Notes due 2028.” The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is initially limited to $201,914,000, 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.
Section 1.0b.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. In the case of any conflict between this Indenture and a Note, the provisions of this Indenture shall control and govern to the extent of such conflict.
Any Global Note may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Indenture as may be required by the Custodian or the Depositary, or as may be required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange or automated quotation system upon which the Notes may be listed or traded or designated for issuance or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Notes are subject.
Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends or endorsements as the Officer executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, or to conform to usage or to indicate any special limitations or restrictions to which any particular Notes are subject.
Each Global Note shall represent such principal amount of the outstanding Notes as shall be specified therein and shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be increased or reduced to reflect redemptions, repurchases, cancellations, conversions, transfers or exchanges permitted hereby. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the 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 Redemption Price and the Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, a Global Note shall be made to the Holder of such Note on the date of payment, unless a record date or other means of determining Holders eligible to receive payment is provided for herein.
Section 1.0c.Date and Denomination of Notes; Payments of Interest and Defaulted Amounts. (a) The Notes shall be issuable in registered form without coupons in minimum denominations of $1,000 principal amount and 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
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twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.
i.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 Company shall pay, or cause the Paying Agent to pay, the principal amount of any Note (x) in the case of any Physical Note, at the office or agency of the Company designated 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 such Holder or, upon application by such a Holder to the Note Registrar (containing the requisite information for the Company, the Trustee or Paying Agent to make such wire transfer) not later than the relevant Regular Record Date, by wire transfer in immediately available funds to that Holder’s account within the United States of America, 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.
ii.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 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:
1.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 agree 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 agree to an earlier date). The Company shall promptly notify the Trustee in writing of such special record date at least three Business Days prior to the date such notice is to be sent to Holders (unless the Trustee shall agree to a shorter period) 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 delivered to each Holder at its address as it appears in the Note Register, or by electronic means to the Depositary in the case of Global Notes, 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 delivered, such Defaulted Amounts shall be paid to the Persons in whose names
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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 the Defaulted Amounts.
2.The Company may make payment of any Defaulted Amounts in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, and upon such notice as may be required by such exchange or automated quotation system, if, after written notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.
Section 1.0d.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 any 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; provided that, subject to Section 17.05, the Trustee shall be entitled to receive an Officer’s Certificate and an Opinion of Counsel of the Company with respect to the issuance, authentication and delivery of such Notes.
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 signatory 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.
Section 1.0e.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 (subject to exchanges of interests in Global Notes in accordance with Section 2.05(b)). 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.
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Upon surrender for registration of transfer of any Note to the Note Registrar or any co-Note Registrar, and satisfaction of the requirements for such transfer set forth in this Section 2.05, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denominations and of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture.
Notes may be exchanged for other Notes of any authorized denominations and of a like aggregate principal amount, upon surrender of the Notes to be exchanged at any such office or agency maintained by the Company pursuant to Section 4.02. Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Notes that the Holder making the exchange is entitled to receive, bearing registration numbers not contemporaneously outstanding.
All Notes presented or surrendered for registration of transfer or for exchange, repurchase or conversion shall (if so required by the Company, the Trustee, the Note Registrar or any co-Note Registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Note Registrar 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 or otherwise required by law.
None of the Company, the Trustee, the Note Registrar or any co-Note Registrar shall be required to exchange or register a transfer of (i) any Notes surrendered for conversion or, if a portion of any Note is surrendered for conversion, such portion thereof surrendered for conversion, (ii) any Notes, or a portion of any Note, surrendered for repurchase (and not withdrawn) in accordance with Article 15, (iii) any Notes selected for redemption in accordance with Article 16, except the unredeemed portion of any Note being redeemed in part or (iv) any Physical Notes after the close of business on a Regular Record Date and prior to the open of business on the corresponding Interest Payment Date.
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.
i.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 applicable procedures of the Depositary therefor.
ii.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
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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 those contained in the legend set forth below), unless such restrictions on transfer shall be eliminated or otherwise waived by written consent of the Company, 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) December 14, 2022, 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:
(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 8X8, 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) DECEMBER 14, 2022 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
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OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER FOR THE COMPANY TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
No transfer of any Note 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 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 (or deemed assigned) a restricted CUSIP number. The Company shall be entitled to instruct the Custodian in writing to so surrender any Global Note as to which any of the conditions set forth in clause (i) through (iii) of the immediately preceding sentence have been satisfied, and, upon such instruction, the Custodian shall so surrender such Global Note for exchange in accordance with the applicable procedures of the Depositary; and any new Global Note so exchanged therefor shall not bear the restrictive legend specified in this Section 2.05(c) and shall not be assigned (or deemed assigned) a restricted CUSIP number. The Company shall promptly notify the Trustee in writing 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.
Without limiting the generality of the foregoing, the restrictive legend affixed to any Note will be deemed to be removed therefrom, and any Note bearing a restricted CUSIP number will be deemed to be represented by an unrestricted CUSIP number, upon delivery of notice to the Trustee by the Company stating that the Resale Restriction Termination Date has occurred. However, if such Note is a global note and the Depositary requires a mandatory exchange or other procedure to cause such global note to be identified by unrestricted CUSIP number in its facilities, then such Global Note shall not be deemed to be identified by unrestricted CUSIP number until such time as the exchange or procedure is effected.
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.
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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, subject to the Depositary’s applicable procedures, a beneficial owner of any Note requests that its beneficial interest therein be issued as a Physical Note, the Company shall execute, and the Trustee, upon receipt of an Officer’s Certificate and a Company Order for the authentication and delivery of Notes, shall authenticate and deliver (x) in the case of clause (iii), a Physical Note to such beneficial owner in a principal amount equal to the principal amount of such Note corresponding to such beneficial owner’s beneficial interest and (y) in the case of clause (i) or (ii), Physical Notes to each beneficial owner of the related Global Notes (or a portion thereof) in an aggregate principal amount equal to the aggregate principal amount of such Global Notes in exchange for such Global Notes, and upon delivery of the Global Notes to the Trustee such Global Notes shall be canceled.
Physical Notes issued in exchange for all or a part of the Global Note pursuant to this Section 2.05(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, 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, redeemed, 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, redeemed, repurchased or transferred to a transferee who receives Physical Notes therefor or any Physical Note is exchanged or transferred for part of such Global Note, the principal amount of such Global Note shall, in accordance with standing procedures and existing instructions between the Depositary and the Custodian, be appropriately reduced or increased, as the case may be, and an endorsement shall be made on 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 act or omission of the Depositary or for the payment of amounts to owners of beneficial interest in a Global Note, for any aspect of the records relating to or payments made on account of those interests by the Depositary, or for maintaining, supervising or reviewing any records of the Depositary relating to such beneficial ownership those interests.
iii.Until the Resale Restriction Termination Date, any stock certificate representing Common Stock issued upon conversion of such Note shall bear a legend in substantially the following form (unless the Note or such Common Stock has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or such Common Stock has been issued upon conversion of Notes that have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company with written notice thereof to the Trustee and any transfer agent for the Common Stock):
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THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:
(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND
(2) AGREES FOR THE BENEFIT OF 8X8, 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) DECEMBER 14, 2022 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 FOR THE COMPANY TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
Any such Common Stock (i) as to which such restrictions on transfer shall have expired in accordance with their terms, (ii) that has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer or (iii) that has been sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, 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).
iv.Any Note or Common Stock issued upon the conversion or exchange of a Note that is repurchased or owned by any Affiliate of the Company (or any Person who was an Affiliate of the Company at any time during the three months immediately preceding) may not be resold by such Affiliate (or such Person, as the case may be) unless registered under the Securities Act or
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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.
v.The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any securities laws or restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
vi.Neither the Trustee nor any agent shall have any responsibility or liability for any actions taken or not taken by the Depositary.
Section 1.0f.Mutilated, Destroyed, Lost or Stolen Notes. In case any Note shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon receipt of a Company Order, the Trustee or an authenticating agent appointed by the Trustee shall authenticate and deliver, a new Note, bearing a registration number not contemporaneously outstanding, in exchange and substitution for the mutilated Note, or in lieu of and in substitution for the Note so destroyed, lost or stolen. In every case the applicant for a substituted Note shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless from any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company, to the Trustee and, if applicable, to such authenticating agent evidence to their satisfaction of the destruction, loss or theft of such Note and of the ownership thereof.
The Trustee or such authenticating agent may authenticate any such substituted Note and deliver the same upon the receipt of a Company Order and 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 payment or conversion shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless for any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, evidence satisfactory to the Company, the Trustee and, if applicable, any Paying Agent or Conversion Agent 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
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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, redemption 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, redemption or repurchase of negotiable instruments or other securities without their surrender.
Section 1.0g.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 receipt of a Company Order, 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, upon receipt of a Company Order, 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 1.0h.Cancellation of Notes Paid, Converted, Etc. The Company shall cause all Notes surrendered for payment, redemption, repurchase (excluding any Notes repurchased pursuant to cash-settled swaps or derivatives, including, but not limited to, any such repurchases pursuant to Section 2.10), 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 other Affiliates), to be delivered to the Trustee for cancellation. All Notes delivered to the Trustee shall be canceled promptly by it, and no Notes shall be authenticated in exchange therefor except as expressly permitted by any of the provisions of this Indenture. The Trustee shall dispose of canceled Notes in accordance with its customary procedures and, after such cancellation, shall deliver a certificate of such cancellation to the Company upon the Company’s written request in a Company Order.
Section 1.0i.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 1.0j.Additional Notes; Repurchases. The Company may, without the consent of or notice to 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 date, the issue price, interest accrued prior to the issue date of such additional Notes and, if applicable, restrictions on transfer in respect of such additional Notes (including pursuant to Section 2.05 hereunder)) in an unlimited aggregate principal amount;
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provided that if any such additional Notes are not fungible with the Notes initially issued hereunder for U.S. federal income tax or U.S. securities law purposes, such additional Notes shall have one or more separate CUSIP numbers. Prior to the issuance of any such additional Notes, the Company shall deliver to the Trustee a Company Order, an Officer’s Certificate and an Opinion of Counsel, such Officer’s Certificate and Opinion of Counsel to cover such matters required by Section 2.04 and Section 17.05. In addition, the Company may, to the extent permitted by law, 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 private or public tender or exchange offer or through counterparties to private agreements, including by cash-settled swaps or other derivatives, in each case without prior notice to Holders. 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 upon receipt of a Company Order, the Trustee shall cancel all Notes so surrendered and such Notes shall no longer be considered outstanding under this Indenture upon their repurchase.
3.
Satisfaction and Discharge
Satisfaction and Discharge
Section 1.0a.Satisfaction and Discharge. (a) This Indenture and the Notes shall cease to be of further effect when (i) all Notes theretofore authenticated and delivered (other than (x) Notes which have been destroyed, lost or stolen and which have been replaced, paid or converted as provided in Section 2.06 and (y) Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 4.04(d)) have been delivered to the Trustee for cancellation; or (ii) the Company has deposited with the Trustee or delivered to Holders, as applicable, after the Notes have become due and payable, whether on the Maturity Date, any Redemption 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 Conversion Obligation, sufficient, without consideration of reinvestment, to pay all of the outstanding Notes and all other sums due and payable under this Indenture or the Notes by the Company; and (b) the Trustee, upon request of the Company contained in an Officer’s Certificate and at the expense of the Company, shall execute proper instruments acknowledging such satisfaction and discharge of this Indenture and the Notes, when 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.
4.
Particular Covenants of the Company
Particular Covenants of the Company
Section 1.0a.Payment of Principal and Interest. The Company covenants and agrees that it will cause to be paid the principal (including the Redemption Price and the Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, each of the Notes at the places, at the respective times and in the manner provided herein and in the Notes.
Notwithstanding anything to the contrary contained in this Indenture, the Company may, to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal, premium or interest (including any Additional Interest) payments hereunder.
Section 1.0b.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 presented for
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registration of transfer or exchange or for payment or repurchase (“Paying Agent”) or for conversion (“Conversion Agent”) and where notices 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 and notices may be made at the Corporate Trust Office in the continental United States of America as a place where Notes may be presented for payment or for registration of transfer.
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 so designated by the Trustee as a place 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 presented for registration of transfer or exchange or for payment or repurchase or for conversion and where notices in respect of the Notes and this Indenture may be served.
Section 1.0c.Appointments to Fill Vacancies in Trustee’s Office. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.09, a Trustee, so that there shall at all times be a Trustee hereunder.
Section 1.0d.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:
1.that it will hold all sums held by it as such agent for the payment of the principal (including the Redemption Price and the Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes in trust for the benefit of the Holders of the Notes;
2.that it will give the Trustee prompt written notice of any failure by the Company to make any payment of the principal (including the Redemption Price and the Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes when the same shall be due and payable; and
3.that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal (including the Redemption Price and the Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes, deposit with the Paying Agent a sum in immediately available U.S. Dollars sufficient to pay such principal (including the Redemption Price and the Fundamental Change Repurchase Price, if applicable) or accrued and unpaid interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee in writing of
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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.
i.If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal (including the Redemption Price and the Fundamental Change Repurchase Price, if applicable) of, and accrued and unpaid interest on, the Notes, set aside, segregate and hold in trust for the benefit of the Holders of the Notes a sum sufficient to pay such principal (including the Redemption Price and the Fundamental Change Repurchase Price, if applicable) and accrued and unpaid interest so becoming due and will promptly notify the Trustee in writing of any failure to take such action and of any failure by the Company to make any payment of the principal (including the Redemption Price and the Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, the Notes when the same shall become due and payable.
ii.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. Upon the occurrence of any event specified in Section 6.01(h) or Section 6.01(i), the Trustee shall automatically become the Paying Agent.
iii.Subject to applicable escheatment laws, any money or property deposited with the Trustee, the Conversion Agent or any Paying Agent, or then held by the Company, in trust for the payment of the principal (including the Redemption Price and the Fundamental Change Repurchase Price, if applicable) of, accrued and unpaid interest on and the consideration due upon conversion of any Note and remaining unclaimed for two years after such principal (including the Redemption Price and the Fundamental Change Repurchase Price, if applicable), interest or consideration due upon conversion has become due and payable shall be paid 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 Trustee shall have no further liability with respect to such funds; 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 1.0e.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 1.0f.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, upon written request, to any Holder, beneficial owner or prospective purchaser of such Notes or any shares of Common Stock issuable upon conversion of such Notes, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such Notes or shares of Common Stock pursuant to Rule 144A.
i.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 under the Exchange Act (or any successor rule)), copies of any documents or reports that the Company is
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required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act (excluding any such information, documents or reports, or portions thereof, subject to confidential treatment and any correspondence with the Commission). Any such document or report that the Company files with the Commission via the Commission’s EDGAR system (or any successor thereto) shall be deemed to be filed with the Trustee for purposes of this Section 4.06(b) at the time such documents or reports 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.
ii.Delivery of the reports and documents described in subsection (b) above to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute actual or constructive notice 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).
iii.If, at any time prior to December 14, 2022, the Company fails to timely file any document or report that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace periods thereunder and other than reports on Form 8-K), or the Notes are not otherwise freely tradable pursuant to Rule 144 by Holders other than the Company’s Affiliates or Holders that were the Company’s Affiliates at any time during the three months immediately preceding (as a result of restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes), the Company shall pay Additional Interest on 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 pursuant to Rule 144 by Holders other than the Company’s Affiliates (or Holders that were the Company’s Affiliates at any time during the three months immediately preceding) as a result of restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes. 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 do not include documents or reports that the Company furnishes to the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
iv.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 number or the Notes are not otherwise freely tradable pursuant to Rule 144 by Holders other than the Company’s Affiliates or Holders that were the Company’s Affiliates at any time during the three months immediately preceding (without restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes) as of January 3, 2023, 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 number and the Notes are freely tradable pursuant to Rule 144 by Holders other than the Company’s Affiliates (or Holders that were the Company’s Affiliates at any time during the three months immediately preceding).
v.Additional Interest will be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on the Notes.
vi.The Additional Interest that is payable in accordance with Section 4.06 (d) or Section 4.06 (e) shall be in addition to any Additional Interest that may accrue on the Notes as a result of the Company’s election pursuant to Section 6.03. Notwithstanding the foregoing, in no event shall Additional Interest accrue under the terms of this Indenture (aggregating any Additional Interest payable pursuant to Section 4.06 (d) with any Additional Interest payable
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pursuant to Section 6.03) 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.
vii.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.
Section 1.0g.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 1.0h.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 March 31, 2023) an Officer’s Certificate stating whether the signers thereof know of any Default that occurred during the previous year.
In addition, the Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any Event of Default or any event that would constitute an Event of Default, its status and what action the Company is taking or proposing to take in respect thereof.
Section 1.0i.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.
5.
Lists of Holders and Reports by the Company and the Trustee
Lists of Holders and Reports by the Company and the Trustee
Section 1.0a.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 January 1 and July 1 in each year beginning with July 1, 2023, 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 1.0b.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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6.
Defaults and Remedies
Defaults and Remedies
Section 1.0a.Events of Default. Each of the following events shall be an “Event of Default” with respect to the Notes:
i.default in any payment of interest on any Note when due and payable, and the default continues for a period of 30 days;
ii.default in the payment of principal of any Note when due and payable on the Maturity Date, upon Optional Redemption, upon any required repurchase, upon declaration of acceleration or otherwise;
iii.failure by the Company to comply with its obligation to convert the Notes in accordance with this Indenture upon exercise of a Holder’s conversion right, and such failure continues for a period of three (3) Business Days;
iv.failure by the Company to issue a Fundamental Change Company Notice in accordance with Section 15.02(c), notice of a Make-Whole Fundamental Change in accordance with Section 14.03(b) or notice of a specified corporate transaction or event in accordance with Section 14.01(b)(ii) or (iii), in each case when due;
v.failure by the Company to comply with its obligations under Article 11;
vi.failure by the Company for 60 days after written notice from the Trustee or the Holders of at least 25% in aggregate 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;
vii.default by the Company or any 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 $25,000,000 (or its foreign currency equivalent) in the aggregate of the Company and/or any such Subsidiary, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness becoming or being declared due and payable prior to its stated maturity or (ii) constituting a failure to pay the principal of any such indebtedness when due and payable (after the expiration of all applicable grace periods) at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise, and, in the case of clauses (i) and (ii), such acceleration shall not, after the expiration of any applicable grace period, have been rescinded or annulled or such failure to pay or default shall not have been cured or waived, or such indebtedness is not paid or discharged, as the case may be, within 30 days of such acceleration or failure to pay, as applicable;
viii.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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ix.an involuntary case or other proceeding shall be commenced against the Company or any Significant Subsidiary seeking liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 30 consecutive days.
Section 1.0b.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 in this Indenture or in the Notes contained 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 without any declaration or other act on the part of the Trustee or any Holder.
The immediately preceding paragraph, however, is subject to the conditions that if, at any time after the principal of the Notes shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered as 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, and on such principal at the rate borne by the Notes at such time) and amounts due to the Trustee pursuant to Section 7.06, and if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) any and all existing Events of Default under this Indenture, other than the nonpayment of the principal of and accrued and unpaid interest, if any, on Notes that shall have become due solely by such acceleration, shall have been cured or waived pursuant to Section 6.09, then and in every such case (except as provided in the immediately succeeding sentence) the Holders of a majority in aggregate principal amount of the Notes then outstanding, by written notice to the Company and to the Trustee, may waive all Defaults or Events of Default with respect to the Notes and rescind and annul such declaration and its consequences and such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver or rescission and annulment shall extend to or shall affect any subsequent Default or Event of Default, or shall impair any right consequent thereon. Notwithstanding anything to the contrary herein, no such waiver or rescission and annulment shall extend to or shall affect any Default or Event of Default resulting from (i) the nonpayment of the principal (including the Redemption Price and the Fundamental Change Repurchase Price, if applicable) of, or accrued and unpaid interest on, any Notes, (ii) a failure to repurchase any Notes when required or (iii) a failure to pay or deliver, as the case may be, the consideration due upon conversion of the Notes.
Section 1.0c.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
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relating to the Company’s failure to comply with its obligations as set forth in Section 4.06(b) shall, for the first 360 days 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 (i) 0.25 % per annum of the principal amount of the Notes outstanding for each day during the first 180 calendar days after the occurrence of such an Event of Default during which such an Event of Default is continuing (or, if earlier, the date on which such Event of Default is cured or waived as provided for in this Indenture) and (ii) 0.50% per annum of the principal amount of the Notes outstanding for each day from, and including, the 181st calendar day to, but excluding, the 360th calendar day following the occurrence of such an Event of Default during which such Event of Default is continuing (or, if earlier, the date on which such Event of Default is cured or waived as provided for in this Indenture). 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 an Event of Default (if such Event of Default relating to the Company’s failure to comply with its obligations as set forth in Section 4.06(b) is not cured or waived prior to such 361st day), the Notes shall be subject to acceleration as provided in Section 6.02. The provisions of this paragraph will not affect the rights of Holders 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 an Event of Default relating to the Company’s failure to comply with its obligations as set forth in Section 4.06(b) in accordance with the immediately preceding paragraph, the Company must notify all Holders, the Trustee and the Paying Agent in writing of such election prior to the beginning of such 360-day period. 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 accrue under the terms of this Indenture (aggregating any Additional Interest payable pursuant to this Section 6.03 with any Additional Interest payable pursuant to Section 4.06(d)) at a rate in excess of 0.50% per annum, regardless of the number of events or circumstances giving rise to the requirement to pay such Additional Interest.
Section 1.0d.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 and be continuing, 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
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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 this Indenture; 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 this Indenture, 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.
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
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of the Company, the Holders and the Trustee shall continue as though no such proceeding had been instituted.
Section 1.0e.Application of Monies Collected by Trustee. Any monies or property collected by the Trustee pursuant to this Article 6 with respect to the Notes shall be applied in the following order, at the date or dates fixed by the Trustee for the distribution of such monies, upon presentation of the several Notes, 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;
Third, in case the principal of the outstanding Notes shall have become due, by declaration or otherwise, and be unpaid to the payment of the whole amount (including, if applicable, the payment of the Redemption Price, the Fundamental Change Repurchase Price and any cash due upon conversion) then owing and unpaid upon the Notes for principal and interest, if any, with interest on the overdue principal and, to the extent that such interest has been collected by the Trustee, upon overdue installments of interest at the rate borne by the Notes at such time, and in case such monies shall be insufficient to pay in full the whole amounts so due and unpaid upon the Notes, then to the payment of such principal (including, if applicable, the Redemption Price, the Fundamental Change Repurchase Price and any cash due upon conversion) and interest without preference or priority of principal over interest, or of interest over principal or of any installment of interest over any other installment of interest, or of any Note over any other Note, ratably to the aggregate of such principal (including, if applicable, the Redemption Price, the Fundamental Change Repurchase Price and any cash due upon conversion) and accrued and unpaid interest; and
Fourth, to the payment of the remainder, if any, to the Company.
Section 1.0f.Proceedings by Holders. Except to enforce the right to receive payment of principal (including, if applicable, the Redemption Price and the Fundamental Change Repurchase Price) or interest when due, or the right to receive payment or delivery of the consideration due upon conversion, no Holder of any Note shall have any right by virtue of or by availing of any provision of this Indenture or the Notes 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:
i.such Holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof, as herein provided;
ii.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;
iii.such Holders shall have offered to the Trustee such security or indemnity satisfactory to it against any loss, liability or expense to be incurred therein or thereby;
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iv.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
v.no direction that, in the opinion of the Trustee, is inconsistent with such written request shall have been given to the Trustee by the Holders of a majority of the aggregate principal amount of the Notes then outstanding within such 60-day period pursuant to Section 6.09,
it being understood and intended, and being expressly covenanted by the taker and Holder of every Note with every other taker and Holder and the Trustee that no one or more Holders shall have any right in any manner whatever by virtue of or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other Holder (it being understood that the Trustee shall not have an affirmative duty to ascertain whether or not any such direction is unduly prejudicial to 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 Redemption Price and the Fundamental Change Repurchase Price, if applicable) of, (y) accrued and unpaid interest, if any, on, and (z) the consideration due upon conversion of, such Note, on or after the respective due dates expressed or provided for in such Note or in this Indenture, or to institute suit for the enforcement of any such payment or delivery, as the case may be, on or after such respective dates against the Company shall not be impaired or affected without the consent of such Holder.
Section 1.0g.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 1.0h.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 1.0i.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)
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such direction shall not be in conflict with any rule of law or with this Indenture, and (b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. The Trustee may refuse to follow any direction that it determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability (it being understood that the Trustee shall not have an affirmative duty to ascertain whether or not any such direction is unduly prejudicial to any other Holder). The Holders of a majority in aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 8.04 may on behalf of the Holders of all of the Notes waive any past Default or Event of Default hereunder and its consequences except (i) a default in the payment of accrued and unpaid interest, if any, on, or the principal (including any Redemption Price, 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 1.0j.Notice of Defaults. The Trustee shall, within 90 days after the occurrence and continuance of a Default of which a Responsible Officer of the Trustee has been notified in writing or has actual knowledge, deliver to all Holders notice of all such Defaults, unless such Defaults shall have been cured or waived before the giving of such notice; provided that, except in the case of a Default in the payment of the principal of (including the Redemption Price and the Fundamental Change Repurchase Price, if applicable), or accrued and unpaid interest on, any of the Notes or a Default in the payment or delivery of the consideration due upon conversion, the Trustee shall be protected in withholding such notice if and so long as it in good faith determines that the withholding of such notice is in the interests of the Holders.
Section 1.0k.Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder of any Note by its acceptance thereof shall be deemed to have agreed, that any court may, in its discretion, require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section 6.11 (to the extent permitted by law) shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Notes at the time outstanding determined in accordance with Section 8.04, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or accrued and unpaid interest, if any, on any Note (including, but not limited to, the Redemption Price and the Fundamental Change Repurchase Price with respect to the Notes being repurchased as provided in this Indenture) 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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7.
Concerning the Trustee
Concerning the Trustee
Section 1.0a.Duties and Responsibilities of Trustee. The Trustee, prior to the occurrence of an Event of Default of which a Responsible Officer of the Trustee has written notice or actual knowledge and after the curing or waiver of all Events of Default that may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In the event an Event of Default has occurred and is continuing of which a Responsible Officer of the Trustee has written notice or actual knowledge, 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. The Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any of the Holders unless such Holders have offered (and, if requested, provided) to the Trustee indemnity or security satisfactory to it (in its sole and absolute discretion) against any cost, 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:
i.prior to the occurrence of an Event of Default of which a Responsible Officer of the Trustee has written notice or actual knowledge and after the curing or waiving of all Events of Default that may have occurred:
1.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
2.in the absence of gross negligence or 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);
ii.the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was grossly negligent in ascertaining the pertinent facts;
iii.the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the 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;
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iv.whether or not therein provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this Section and Section 7.02;
v.the Trustee shall not be liable in respect of any payment (as to the correctness of amount, entitlement to receive or any other matters relating to payment) or notice effected by the Company or any Paying Agent or any records maintained by any co-Note Registrar with respect to the Notes;
vi.if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred;
vii.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, indemnities, immunities and protections afforded to the Trustee pursuant to this Article 7 shall also be afforded to such Custodian, Note Registrar, Paying Agent, Conversion Agent, Bid Solicitation Agent or transfer agent; and
viii.under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Notes.
None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers.
Section 1.0b.Reliance on Documents, Opinions, Etc. Except as otherwise provided in Section 7.01:
i.the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, coupon or other paper or document (whether in its original or facsimile form) believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties, not only as to due execution, validity and effectiveness, but also as to the truth and accuracy of any information contained therein;
ii.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;
iii.the Trustee may consult with counsel of its selection and require an Opinion of Counsel and any written or verbal advice of such counsel or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;
iv.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;
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v.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;
vi.the permissive rights of the Trustee enumerated herein shall not be construed as duties;
vii.the Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder;
viii.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;
ix.the Trustee shall not be liable for any action taken, suffered or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; and
x.the Trustee (and the Conversion Agent, if other than the Trustee) shall not be obligated to take possession of any Common Stock (or any Reference Property other than cash), whether upon conversion or in connection with any discharge of this Indenture pursuant to Article 3 hereof.
In no event shall the Trustee be liable for any consequential, punitive, special, incidental or indirect 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) a Notice of Default with respect to such Default or Event of Default shall have been given to a Responsible Officer of the Trustee by the Company or by any Holder of the Notes at the Corporate Trust Office.
Section 1.0c.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 or any money paid to the Company or upon the Company’s direction under any provision of this Indenture.
Section 1.0d.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 any Affiliate thereof) or Note Registrar, in its individual or any other capacity, may become the owner or pledgee of Notes with the same rights it would have if it were not the Trustee, Paying Agent, Conversion Agent, Bid Solicitation Agent or Note Registrar.
Section 1.0e.Monies and Shares of Common Stock to Be Held in Trust. All monies and any shares of Common Stock received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Money and shares of Common Stock held by the Trustee in trust hereunder need not be segregated from other funds or property except to the extent required by law. The Trustee shall be under no liability for interest
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or investment income 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 1.0f.Compensation and Expenses of Trustee. The Company covenants and agrees to pay to the Trustee, in any capacity under this Indenture, from time to time, and the Trustee shall be entitled to, compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as mutually agreed to in writing between the Trustee and the Company, and the Company will pay or reimburse the Trustee upon its request for all reasonable and documented 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 and documented fees and the expenses and disbursements of its agents and counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as shall have been caused by its gross negligence or willful misconduct as determined by a final, non-appealable decision of a court of competent jurisdiction. The Company also covenants to indemnify the Trustee in any capacity under this Indenture and any other document or transaction entered into in connection herewith and its officers, directors, attorneys, employees and agents and any authenticating agent for, and to hold them harmless against, any loss, claim (whether asserted by the Company, a Holder or any Person), suit or proceeding at law or in equity, action, damage, liability, fee, tax or expense (including reasonable and documented attorneys’ fees) incurred or with which it may be threatened by reason of acting as or on behalf of the Trustee under this Indenture without gross negligence or willful misconduct on the part of the Trustee, its officers, directors, attorneys, agents or employees, or such agent or authenticating agent, as the case may be, as determined by a final, non-appealable decision of a court of competent jurisdiction, 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 or enforcing this indemnity. 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, the payment of the Notes and the earlier resignation or removal of the Trustee. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The indemnification provided in this Section 7.06 shall extend to the officers, directors, attorneys, 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 1.0g.Officer’s Certificate as Evidence. Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of gross negligence and willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by an Officer’s Certificate delivered to the Trustee, and such Officer’s Certificate, in the absence of gross negligence or
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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 1.0h.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, for this purpose, the Trust Indenture Act were applicable hereto) to act as such and has a combined capital and surplus of at least $50,000,000. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.
Section 1.0i.Resignation or Removal of Trustee. (a) The Trustee may at any time resign by giving written notice of such resignation to the Company. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment within 60 days after the giving of such notice of resignation to the Company, the resigning Trustee may, upon ten Business Days’ notice to the Company and the Holders and at the expense of the Company, petition any court of competent jurisdiction 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.
i.In case at any time any of the following shall occur:
1.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
2.the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in either case, the Company may by a Board Resolution remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 6.11, any Holder who has been a bona fide holder of a Note or Notes for at least six months (or since the date of this Indenture) may, on behalf of himself or herself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.
ii.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, upon thirty days’ prior notice to the Trustee, 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
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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.
iii.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 1.0j.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 deliver or cause to be delivered notice of the succession of such trustee hereunder to the Holders. If the Company fails to deliver such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be delivered at the expense of the Company.
Section 1.0k.Succession by Merger, Etc. Any corporation or other entity into which the Trustee may be merged or converted or with which it may be sold or consolidated, or any corporation or other entity resulting from any merger, conversion, sale or consolidation to which the Trustee shall be a party, or any corporation or other entity succeeding to all or substantially all of the corporate trust business of the Trustee (including the administration of this Indenture), shall be the successor to the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided that in the case of any corporation or other entity succeeding to all or substantially all of the corporate trust business of the Trustee such corporation or other entity shall be eligible under the provisions of Section 7.08.
In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee or authenticating agent appointed by such predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee or an authenticating agent appointed by such successor trustee may authenticate such Notes either in the name of any predecessor trustee hereunder or in the name of the successor trustee; and in all such cases such certificates shall have the full force which it is
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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 1.0l.Trustee’s Application for Instructions from the Company. Any application by the Trustee for written instructions from the Company (other than with regard to any action proposed to be taken or omitted to be taken by the Trustee that affects the rights of the Holders of the Notes under this Indenture) may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after notice to the Company has been deemed to have been given pursuant to Section 17.03, unless any such officer shall have consented in writing to any earlier date), unless, prior to taking any such action (or the effective date in the case of any omission), the Trustee shall have received written instructions in accordance with this Indenture in response to such application specifying the action to be taken or omitted.
8.
Concerning the Holders
Concerning the Holders
Section 1.0a.Action by Holders. Whenever in this Indenture it is provided that the Holders of a specified percentage of the aggregate principal amount of the Notes may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action, the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in writing, or (b) by the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with the provisions of Article 9, or (c) by a combination of such instrument or instruments and any such record of such a meeting of Holders. Whenever the Company or the Trustee solicits the taking of any action by the Holders of the Notes, the Company or the Trustee may fix, but shall not be required to, 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 1.0b.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 1.0c.Who Are Deemed Absolute Owners. The Company, the Trustee, any authenticating agent, any Paying Agent, any Conversion Agent and any Note Registrar may deem the Person in whose name a Note shall be registered upon the Note Register to be, and may treat it as, the absolute owner of such Note (whether or not such Note shall be overdue and notwithstanding any notation of ownership or other writing thereon made by any Person other than the Company or any Note Registrar) for the purpose of receiving payment of or on account of the principal (including any Redemption Price and any Fundamental Change Repurchase Price) of and (subject to Section 2.03) accrued and unpaid interest on such Note, for conversion of such Note and for all other purposes under this Indenture; and neither the Company nor the Trustee nor any Paying Agent nor any Conversion Agent nor any Note Registrar shall be affected
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by any notice to the contrary. The sole registered holder of a Global Note shall be the Depositary or its nominee. All such payments or deliveries so made to any Holder for the time being, or upon its order, shall be valid, and, to the extent of the sums or shares of Common Stock so paid or delivered, effectual to satisfy and discharge the liability for monies payable or shares deliverable upon any such Note. The rights of beneficial owners in any Global Note may be exercised only through the Depositary subject to its applicable procedures. Notwithstanding anything to the contrary in this Indenture or the Notes following an Event of Default, any owner 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 1.0d.Company-Owned Notes Disregarded. In determining whether the Holders of the requisite aggregate principal amount of Notes have concurred in any direction, consent, waiver or other action under this Indenture, Notes that are owned by the Company, by any Subsidiary thereof or by any Affiliate of the Company or any Subsidiary thereof shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, consent, waiver or other action, only Notes with respect to which a Responsible Officer has received written notice that such Notes are so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as outstanding for the purposes of this Section 8.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to so act with respect to such Notes and that the pledgee is not the Company, a Subsidiary thereof or an Affiliate of the Company or a Subsidiary thereof. In the case of a dispute as to such right, any decision or indecision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the Company shall furnish to the Trustee promptly an 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 1.0e.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.
9.
Holders’ Meetings
Holders’ Meetings
Section 1.0a.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:
i.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
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take any other action authorized to be taken by Holders pursuant to any of the provisions of Article 6;
ii.to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article 7;
iii.to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Article 10; or
iv.to take any other action authorized to be taken by or on behalf of the Holders of any specified aggregate principal amount of the Notes under any other provision of this Indenture or under applicable law.
Section 1.0b.Call of Meetings by Trustee. The Trustee may at any time call a meeting of Holders to take any action specified in Section 9.01, to be held at such time and at such place as the Trustee shall determine. Notice of every meeting of the Holders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting and the establishment of any record date pursuant to Section 8.01, shall be delivered to Holders of such Notes. Such notice shall also be delivered to the Company. Such notices shall be delivered not less than 20 nor more than 90 days prior to the date fixed for the meeting.
Any meeting of Holders shall be valid without notice if the Holders of all Notes then outstanding are present in person or by proxy or if notice is waived before or after the meeting by the Holders of all Notes then outstanding, and if the Company and the Trustee are either present by duly authorized representatives or have, before or after the meeting, waived notice.
Section 1.0c.Call of Meetings by Company or Holders. In case at any time the Company, pursuant to a Board Resolution, or the Holders of at least 10% of the aggregate principal amount of the Notes then outstanding, shall have requested the Trustee to call a meeting of Holders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have delivered the notice of such meeting within 20 days after receipt of such request, then the Company or such Holders may determine the time and the place for such meeting and may call such meeting to take any action authorized in Section 9.01, by delivering notice thereof as provided in Section 9.02.
Section 1.0d.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 1.0e.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
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secretary of the meeting shall be elected by vote of the Holders of a majority in aggregate principal amount of the outstanding Notes represented at the meeting and entitled to vote at the meeting.
Subject to the provisions of Section 8.04, at any meeting of Holders each Holder or proxyholder shall be entitled to one vote for each $1,000 principal amount of Notes held or represented by him or her; provided, however, that no vote shall be cast or counted at any meeting in respect of any Note challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Notes held by it or instruments in writing as aforesaid duly designating it as the proxy to vote on behalf of other Holders. Any meeting of Holders duly called pursuant to the provisions of Section 9.02 or Section 9.03 may be adjourned from time to time by the Holders of a majority of the aggregate principal amount of Notes represented at the meeting, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice.
Section 1.0f.Voting. The vote upon any resolution submitted to any meeting of Holders shall be by written ballot on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the outstanding aggregate principal amount of the Notes held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was delivered as provided in Section 9.02. The record shall show the aggregate principal amount of the Notes voting in favor of or against any resolution. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the matters therein stated.
Section 1.0g.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. Nothing contained in this Article 9 shall be deemed or construed to limit any Holder’s actions pursuant to the applicable procedures of the Depositary so long as the Notes are Global Notes.
10.
Supplemental Indentures
Supplemental Indentures
Section 1.0a.Supplemental Indentures Without Consent of Holders. Without the consent of any Holder, the Company 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:
i.to cure any ambiguity, omission, defect or inconsistency;
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ii.to provide for the assumption by a Successor Company of the obligations of the Company under this Indenture pursuant to Article 11;
iii.to add guarantees with respect to the Notes;
iv.to secure the Notes;
v.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 or the Notes;
vi.to make any change that does not adversely affect the rights of any Holder under this Indenture or the Notes;
vii.in connection with any Merger Event, to provide that the Notes are convertible into Reference Property, subject to the provisions of Section 14.02, and make such related changes to the terms of the Notes to the extent expressly required by this Indenture in accordance with Section 14.07;
viii.to increase the Conversion Rate as provided in this Indenture;
ix.to provide for the acceptance of appointment by a successor Trustee pursuant to Section 7.09 or to facilitate the administration of the trusts under this Indenture by more than one Trustee;
x.to irrevocably elect a Specified Dollar Amount, minimum Specified Dollar Amount or range of Specified Dollar Amounts to apply (provided that, the Specified Dollar Amount prior to the Shareholder Approval shall always be the Capped Combination Settlement Specified Dollar Amount), or eliminate the Company’s right to elect a Settlement Method (other than Capped Combination Settlement);
xi.to comply with the rules of the Depositary so long as such amendment does not adversely affect the rights of any Holder; or
xii.to comply with any requirement of the Commission in connection with the qualification of this Indenture under the Trust Indenture Act.
Upon the written request of the Company, the Trustee is hereby authorized to, and shall 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, except that the Trustee shall not be obligated to, but may in its discretion, enter into any supplemental indenture that affects the Trustee’s own rights, duties, liabilities, indemnities 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 1.0b.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 and the Trustee, at the Company’s expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for the
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purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture, the Notes or any supplemental indenture or of modifying in any manner the rights of the Holders; provided, however, that, without the consent of each Holder of an outstanding Note affected, no such supplemental indenture shall:
i.reduce the principal amount of Notes whose Holders must consent to an amendment;
ii.reduce the rate of or extend the stated time for payment of interest on any Note;
iii.reduce the principal of or extend the Maturity Date of any Note;
iv.make any change that adversely affects the conversion rights of any Notes other than as expressly required by this Indenture;
v.reduce the Redemption Price or the Fundamental Change Repurchase Price of any Note or amend or modify in any manner adverse to the Holders the Company’s obligation to make such payments, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;
vi.make any Note payable in money, or at a place of payment, other than that stated in the Note;
vii.change the ranking of the Notes;
viii.impair the right of any Holder to receive payment of principal and interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Note; or
ix.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 of the consent of the requisite 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, liabilities, indemnities or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.
Holders do not need under this Section 10.02 to approve the particular form of any proposed supplemental indenture. It shall be sufficient if such Holders approve the substance thereof. After any such supplemental indenture becomes effective, the Company shall deliver to the Holders (with a copy to the Trustee) a notice briefly describing such supplemental indenture. However, the failure to give such notice to all the Holders, or any defect in the notice, will not impair or affect the validity of the supplemental indenture.
Section 1.0c.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.
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Section 1.0d.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 request and expense, bear a notation 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 Company, 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, upon receipt of a Company Order, 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 1.0e.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 and is permitted or authorized by this Indenture and that the supplemental indenture constitutes the legal, valid and binding obligation of the Company enforceable in accordance with its terms.
11.
Consolidation, Merger, Sale, Conveyance and Lease
Consolidation, Merger, Sale, Conveyance and Lease
Section 1.0a.Company May Consolidate, Etc. on Certain Terms. Subject to the provisions of Section 11.02, the Company shall not consolidate with, merge with or into, or sell, convey, transfer or lease all or substantially all of its properties and assets to another Person, unless:
i.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
ii.immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing under this Indenture.
For purposes of this Section 11.01, the sale, conveyance, transfer or lease of all or substantially all of the properties and assets of one or more Subsidiaries of the Company to another Person, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a consolidated basis, shall be deemed to be the sale, conveyance, transfer or lease of all or substantially all of the properties and assets of the Company to another Person.
Section 1.0b.Successor Corporation to Be Substituted. In case of any such consolidation, merger, sale, conveyance, transfer or lease and upon the assumption by the Successor Company, by supplemental indenture, executed and delivered to the Trustee, of all of the obligations of the Company under the Notes and this Indenture, such Successor Company (if not the Company) shall succeed to and, except in the case of a lease of all or substantially all of the Company’s properties and assets, shall be substituted for the Company, with the same effect as if it had been named herein as the party of the first part, and may thereafter exercise every right and power of, the Company under this Indenture. 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
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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 1.0c.Opinion of Counsel to Be Given to Trustee. No such consolidation, merger, sale, conveyance, transfer or lease shall be effective unless the Trustee shall receive an Officer’s Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance, transfer or lease and any such assumption and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, complies with the provisions of this Article 11.
12.
Immunity of Incorporators, Stockholders, Officers and Directors
Immunity of Incorporators, Stockholders, Officers and Directors
Section 1.0a.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.
13.
Intentionally Omitted
Intentionally Omitted
14.
Conversion of Notes
Conversion of Notes
Section 1.0a.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 a 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 November 15, 2027 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 November 15, 2027 and prior to the close of business on the second Scheduled Trading Day
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immediately preceding the Maturity Date, in each case, at an initial conversion rate of 139.8064 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”).
i.(i) Prior to the close of business on the Business Day immediately preceding November 15, 2027, 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 five consecutive Trading Day period (the “Measurement Period”) in which the Trading Price per $1,000 principal amount of Notes, as determined following a request by a Holder of Notes in accordance with this Section 14.01(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 Bid Solicitation Agent pursuant to this Section 14.01(b)(i) and the definition of Trading Price set forth in this Indenture. The Bid Solicitation Agent (if other than the Company) shall have no obligation to determine the Trading Price per $1,000 principal amount of Notes unless the Company has requested such determination, 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 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 on any Trading Day would be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate on such Trading Day, at which time the Company shall instruct the Bid Solicitation Agent (if other than the Company) to determine, or if the Company is acting as Bid Solicitation Agent, the Company shall determine, the Trading Price per $1,000 principal amount of Notes beginning on the next Trading Day and on each successive Trading Day until the Trading Price per $1,000 principal amount of Notes is greater than or equal to 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate. If (x) the Company is not acting as Bid Solicitation Agent, and the Company does not, when the Company is required to, instruct the Bid Solicitation Agent in writing to obtain bids, or if the Company so instructs the Bid Solicitation Agent to obtain bids and the Bid Solicitation Agent fails to make such determination, or (y) the Company is acting as Bid Solicitation Agent and the Company fails to make such determination when obligated as provided in the immediately preceding sentence, then, in either case, the Trading Price per $1,000 principal amount of Notes shall be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate on each Trading Day of such failure. If the Trading Price condition set forth above has been met, the Company shall so notify the Holders, the Trustee and the Conversion Agent (if other than the Trustee) in writing on or within one Business Day of such determination. If the Company provides the relevant notice after such date of determination as provided in the immediately preceding sentence, Holders may convert their Notes during the five Business Day period beginning on, and including, the Business Day immediately following such date of determination. Any such determination will be conclusive absent manifest error. 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, the Trustee and the Conversion Agent (if other than the Trustee) in writing that the Trading Price condition set forth above is no longer met, and thereafter neither the Company nor the Bid Solicitation Agent (if other than the Company) shall be required to solicit bids (or determine the Trading Price of the Notes as set forth in this Indenture) again until another qualifying request is made pursuant to this Section 14.01(b)(i).
1.If, prior to the close of business on the Business Day immediately preceding November 15, 2027, the Company elects to:
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a.issue to all or substantially all holders of the Common Stock any rights, options or warrants (other than a distribution of rights pursuant to a stockholder rights plan where such rights have not separated from the Common Stock) entitling them, for a period of not more than 45 calendar days after the announcement date of such issuance, to subscribe for or purchase shares of the Common Stock at a price per share that is less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such distribution; or
b.distribute to all or substantially all holders of the Common Stock the Company’s assets, securities or rights to purchase securities of the Company (other than a distribution of rights pursuant to a stockholder rights plan where such rights have not separated from the Common Stock), which distribution has a per share value, as reasonably determined by the Company in good faith, exceeding 10% of the Last Reported Sale Price of the Common Stock on the Trading Day preceding the date of announcement for such distribution,
then, in either case, the Company shall notify the Holders of the Notes in writing (with a copy to the Trustee and the Conversion Agent (if other than the Trustee)) at least 45 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, even if the Notes are not otherwise convertible at such time.
2.If (i) a transaction or event that constitutes (x) a Fundamental Change or (y) a Make-Whole Fundamental Change occurs prior to the close of business on the Business Day immediately preceding November 15, 2027, regardless of whether a Holder has the right to require the Company to repurchase the Notes pursuant to Section 15.02, or (ii) if the Company is a party to a consolidation, merger, binding share exchange, or transfer or lease of all or substantially all of its assets that occurs prior to the close of business on the Business Day immediately preceding November 15, 2027, in each case pursuant to which the Common Stock would be converted into cash, securities or other assets (other than a merger effected solely to change the Company’s jurisdiction of incorporation that does not otherwise constitute a Make-Whole Fundamental Change or a Fundamental Change), then, in each case, all or any portion of a Holder’s Notes may be surrendered for conversion at any time from or after the effective date of the transaction 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 immediately 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) as promptly as practicable following the date the Company publicly announces such transaction or event, or otherwise becomes aware of such transaction or event, but, in each case, in no event later than one Business Day after the effective date of such transaction or event.
3.Prior to the close of business on the Business Day immediately preceding November 15, 2027, 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 December 31, 2022 (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
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the period of 30 consecutive Trading Days ending on, and including, 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 as determined by the Company.
4.If the Company calls any or all of the Notes for redemption pursuant to Article 16 prior to the close of business on the Business Day immediately preceding November 15, 2027, then a Holder may surrender all or any portion of its Notes for conversion at any time prior to the close of business on the second Scheduled Trading Day immediately preceding the Redemption Date, even if the Notes are not otherwise convertible at such time. After that time, the right to convert such Notes on account of such redemption shall expire, unless the Company defaults in the payment of the Redemption Price, in which case a Holder of Notes may convert all or a portion of its Notes until the Redemption Price has been paid or duly provided for.
Section 1.0b.Conversion Procedures; Settlement Upon Conversion.
i.Subject to this Section 14.02, Section 14.03(b) and Section 14.07(a), upon conversion of any Note, the Company shall satisfy its Conversion Obligation by paying or delivering, 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.
1.All conversions for which the relevant Conversion Date occurs (x) on or after November 15, 2027 or (y) during a Redemption Period shall be settled using the same Settlement Method.
2.Except for any conversions for which the relevant Conversion Date occurs during a Redemption Period and any conversions for which the relevant Conversion Date occurs on or after November 15, 2027, 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.
3.If, in respect of any Conversion Date (or any conversions occurring (x) during a Redemption Period or (y) on or after November 15, 2027, as the case may be), the Company elects a Settlement Method, the Company shall deliver a written notice (the “Settlement Notice”) of the Settlement Method so elected in respect of such Conversion Date (or such period, as the case may be) to converting Holders, the Trustee and the Conversion Agent (if other than the Trustee) no later than the close of business on the Trading Day immediately following the relevant Conversion Date (or, in the case of any conversions occurring (x) during a Redemption Period, in such Redemption Notice, or (y) on or after November 15, 2027, no later than the close of business on the Business Day immediately preceding November 15, 2027). If the Company does not timely elect a Settlement Method prior to the deadline set forth in the immediately preceding sentence, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement for such Conversion Date or during such period and the Company shall be deemed to have elected (x) if the Conversion Date for such conversion is before the date the Stockholder Approval is obtained, Cash Settlement or (y) otherwise, 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 (the “Default Settlement
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Method”). Such Settlement Notice shall specify the relevant Settlement Method and in the case of an election of (x) Combination Settlement, the relevant Settlement Notice shall indicate the Specified Dollar Amount per $1,000 principal amount of Notes or (y) Capped Combination Settlement, the relevant Daily Share Cap and Capped Combination Floor Amount. If the Company timely delivers a Settlement Notice (x) 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 (or, in respect of Conversion with a Conversion Date that occurs prior to the Company obtaining Shareholder Approval, the Capped Combination Settlement Specified Dollar Amount) or (y) electing Capped Combination Settlement in respect of its Conversion Obligation but does not indicate (i) the Daily Share Cap in such Settlement Notice, the Daily Share Cap shall be deemed to be 0 or (ii) the Capped Combination Floor Amount, the Capped Combination Floor Amount shall be deemed to be $1,000. The Company may, from time to time, change the Default Settlement Method for conversions after the Company obtains Shareholder Approval (and, if applicable, the Specified Dollar Amount) by sending notice of the new Default Settlement Method and, if applicable, Specified Dollar Amount to the Holders, the Trustee and the Conversion Agent. In addition, the Company may, by notice to the Holders (with a copy to the Trustee and the Conversion Agent), elect to irrevocably fix the Settlement Method or to irrevocably elect any Settlement Method to apply and, if applicable, for a Specified Dollar Amount, minimum Specified Dollar Amount or range of Specified Dollar Amounts to apply, for conversions with a Conversion Date occurring after the Company obtains Shareholder Approval. If the Company makes such an irrevocable election, then such election shall apply to all conversions with a Conversion Date that is on or after the date the Company sends such notice. For the avoidance of doubt, such irrevocable election, if made, will be effective without the need to amend the Indenture or the Notes, including without the need to enter into a supplemental indenture pursuant to Section 10.01(j).
4.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;
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 40 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 40 consecutive Trading Days during the related Observation Period.
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5.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.
6.Unless and until the Company obtains stockholder approval to issue shares of Common Stock in excess of the Conversion Share Cap upon conversion of the Notes in accordance with the listing standards of the New York Stock Exchange, (the “Shareholder Approval”), the Company may not elect Physical Settlement or Combination Settlement other than Capped Combination Settlement, unless the aggregate number of Shares of common stock deliverable to the Holders of such Notes (together with the Holders of any Notes converted as of the same Conversion Date (assuming Physical Settlement and the Conversion Rate then in effect) would not exceed the Remaining Share Cap.
ii.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 applicable procedures of the Depositary in effect at that time for converting a beneficial interest in a Global Note 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, if required, pay all transfer or similar taxes, if any, as set forth in Section 14.02(d) and Section 14.02(e)) 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, PDF or other electronic transmission thereof) (a “Notice of Conversion”) at the office of the Conversion Agent and state in writing therein the principal amount of Notes to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of Common Stock to be delivered upon settlement of the Conversion Obligation to be registered, (2) surrender such Notes, duly endorsed to the Company or in blank (and accompanied by appropriate endorsement and transfer documents), at the office of the Conversion Agent, (3) if required, furnish appropriate endorsements and transfer documents and (4) if required, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled as set forth in Section 14.02(h). The Trustee (and, if different, the Conversion Agent) shall notify the Company of any conversion pursuant to this Article 14 on the Conversion Date for such conversion. No Notes may be surrendered for conversion 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.
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.
iii.A Note shall be deemed to have been converted immediately prior to the close of business on the date (the “Conversion Date”) that the Holder has complied with the requirements set forth in subsection (b) above. Except as set forth in Section 14.03(b) and Section 14.07(a), the Company shall pay or deliver, as the case may be, the consideration due in respect of the Conversion Obligation on the second Business Day immediately following the
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relevant Conversion Date, if the Company elects Physical Settlement, or on the second Business Day immediately following the last Trading Day of the relevant 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 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.
iv.In case any Physical Note shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of the Note so surrendered a new Note or Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Note, without payment of any service charge by the converting Holder but, if required by the Company or 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.
v.If a Holder submits a Note for conversion, the Company shall pay any documentary, stamp or similar issue or transfer tax due on any issuance of any shares of Common Stock upon conversion, unless the tax is due because the Holder requests any 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.
vi.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.
vii.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.
viii.Upon conversion, a Holder shall not receive any separate cash payment for accrued and unpaid interest, if any, except as set forth below, and the Conversion Rate shall not be adjusted for any accrued and unpaid interest on any converted Notes. 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 excluding, the relevant Conversion Date. As a result, accrued and unpaid interest, if any, to, but excluding, 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 and prior to the open of business on the corresponding Interest Payment 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 (to, but excluding, such Interest Payment Date) on the corresponding Interest Payment Date notwithstanding the conversion. However, Notes surrendered for conversion during the period from the close of business on any Regular Record Date to the open of business on the corresponding Interest Payment Date must be accompanied by funds equal to the amount of interest payable on such Interest Payment Date on the Notes so converted; provided that no such payment shall be required (1) for conversions following the close of business on 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
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Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date; (3) if the Company has specified a Redemption Date that is after a Regular Record Date and on or prior to the second Scheduled Trading Day immediately following the corresponding Interest Payment Date; or (4) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such Note. Therefore, for the avoidance of doubt, all Holders of record on the Regular Record Date immediately preceding the Maturity Date, any Redemption Date and any Fundamental Change Repurchase Date described in clauses (1)-(3) above shall receive the full interest payment due on the Maturity Date or other applicable Interest Payment Date in cash regardless of whether their Notes have been converted following such Regular Record Date.
ix.The Person in whose name the certificate for any shares of Common Stock delivered upon conversion is registered shall be treated as a stockholder of record as of the close of business on the relevant Conversion Date (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.
x.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 (or is deemed to have 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.
Section 1.0c.Increased Conversion Rate Applicable to Certain Notes Surrendered in Connection with Make-Whole Fundamental Changes or During a Redemption Period. (a) If (x) the Effective Date of a Make-Whole Fundamental Change occurs prior to the Maturity Date and a Holder elects to convert its Notes in connection with such Make-Whole Fundamental Change or the Company issues a Redemption Notice pursuant to Section 16.02 and a Holder elects to convert its Notes during the related Redemption Period, the Company shall, under the circumstances described below, increase the Conversion Rate for the Notes so surrendered for conversion by a number of additional shares of Common Stock (the “Additional Shares”), as described below. A conversion of Notes shall be deemed for these purposes to be “in connection with” such Make-Whole Fundamental Change if the relevant Notice of Conversion is received by the Conversion Agent from, and including, the open of business on the Effective Date of the Make-Whole Fundamental Change up to, and including, the close of business on the Business Day immediately prior to the related Fundamental Change Repurchase Date (or, 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 close of business on the 35th Trading Day immediately following the Effective Date of such Make-Whole Fundamental Change) (such period, the “Make-Whole Fundamental Change Period”).
i.Upon surrender of Notes for conversion in connection with a Make-Whole Fundamental Change pursuant to Section 14.01(b)(iii) or during a Redemption Period pursuant to Section 14.01(b)(v), the Company shall, at its option, satisfy the related Conversion Obligation by Physical Settlement, Cash Settlement or Combination Settlement in accordance with Section 14.02 based on the Conversion Rate as increased to reflect the Additional Shares pursuant to the table below; provided, however, that if, the Reference Property in any Make-Whole Fundamental Change described in clause (b) of the definition of Fundamental Change is
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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 increase to reflect the Additional Shares), multiplied by such Stock Price. In such event, the Conversion Obligation shall be determined and paid to Holders in cash on the second Business Day following the Conversion Date. The Company shall notify the Holders, the Trustee and the Conversion Agent (if other than the Trustee) of the Effective Date of any Make-Whole Fundamental Change no later than five Business Days after such Effective Date.
ii.The number of Additional Shares, if any, by which the Conversion Rate shall be increased for conversions during the Make-Whole Fundamental Change Period or during the Redemption Period 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”) or the Redemption Notice Date, as applicable and the price (the “Stock Price”) paid (or deemed to be paid) per share of Common Stock in the Make-Whole Fundamental Change or on the Redemption Notice Date, as applicable, as set forth in this Section 14.03. 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. In the case of any other Make-Whole Fundamental Change or in the case of any Optional Redemption, the Stock Price shall be the average of the Last Reported Sale Prices of the Common Stock over the five consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Effective Date of the Make-Whole Fundamental Change or the Redemption Notice Date, as the case may be. In the event that a Conversion Date during a Redemption Period would also be deemed to be in connection with a Make-Whole Fundamental Change Period, a Holder of any such Notes to be converted will be entitled to a single increase to the Conversion Rate with respect to the first to occur of the applicable Redemption Notice Date or Effective Date, and the later event shall be deemed not to have occurred for purposes of this Section 14.03.
iii.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.
iv.The following table sets forth the number of Additional Shares 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 or Redemption Notice Date, as applicable, set forth below:
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| Stock Price | ||||||||||||||||||||||||||||||||
Effective Date/Redemption Notice Date | $5.61 | $6.00 | $7.15 | $7.50 | $9.30 | $12.00 | $14.00 | $20.00 | $30.00 | $40.00 | ||||||||||||||||||||||
August 11, 2022 | 38.4467 | 38.4467 | 27.6020 | 25.1680 | 16.3240 | 9.3917 | 6.5264 | 2.3965 | 0.3417 | 0.0000 | ||||||||||||||||||||||
August 1, 2023 | 38.4467 | 38.4283 | 26.9687 | 24.4480 | 15.4422 | 8.6333 | 5.9093 | 2.0995 | 0.2660 | 0.0000 | ||||||||||||||||||||||
August 1, 2024 | 38.4467 | 37.8567 | 25.7440 | 23.1320 | 14.0333 | 7.5175 | 5.0386 | 1.7215 | 0.1817 | 0.0000 | ||||||||||||||||||||||
August 1, 2025 | 38.4467 | 36.2650 | 23.4162 | 20.7267 | 11.7394 | 5.8658 | 3.8164 | 1.2470 | 0.1023 | 0.0000 | ||||||||||||||||||||||
August 1, 2026 | 38.4467 | 33.4733 | 19.5505 | 16.7893 | 8.2733 | 3.6558 | 2.2971 | 0.7350 | 0.0400 | 0.0000 | ||||||||||||||||||||||
August 1, 2027 | 38.4467 | 28.7250 | 12.1226 | 9.3373 | 2.9252 | 1.0742 | 0.7000 | 0.2445 | 0.0003 | 0.0000 | ||||||||||||||||||||||
February 1, 2028 | 38.4467 | 26.8600 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | ||||||||||||||||||||||
The exact Stock Prices and Effective Dates or Redemption Notice Dates, may not be set forth in the table above, in which case:
1.if the Stock Price is between two Stock Prices in the table above or the Effective Date or the Redemption Notice Date, as the case may be, is between two Effective Dates or Redemption Notice Dates, as applicable, in the table above, the number of Additional Shares by which the Conversion Rate shall be increased shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Prices and the earlier and later Effective Dates or Redemption Notice Dates, as applicable, based on a 365-day year;
2.if the Stock Price is greater than $40.00 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
3.if the Stock Price is less than $5.61 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table above pursuant to subsection (d) above), no Additional Shares shall be added to the Conversion Rate.
Notwithstanding the foregoing, in no event shall the Conversion Rate per $1,000 principal amount of Notes exceed 178.2531 shares of Common Stock, subject to adjustment in the same manner as the Conversion Rate pursuant to Section 14.04.
v.Nothing in this Section 14.03 shall prevent an adjustment to the Conversion Rate that would otherwise be required pursuant to Section 14.04.
Section 1.0d.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.
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i.If the Company exclusively issues shares of Common Stock as a dividend or distribution on shares of the Common Stock, or if the Company effects a share split or share combination, the Conversion Rate shall be adjusted based on the following formula:
where,
CR0 | = | the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date of such dividend or distribution, or immediately prior to the open of business on the Effective Date of such share split or share combination, as applicable; | ||||||
CR1 | = | the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date or Effective Date, as applicable; | ||||||
OS0 | = | the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date or Effective Date, as applicable (before giving effect to any such dividend, distribution, share split or share combination), as applicable; and | ||||||
0S1 | = | the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination, as applicable. | ||||||
Any adjustment made under this Section 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.
ii.If the Company issues to all or substantially all holders of Common Stock any rights, options or warrants (other than a distribution of rights pursuant to a stockholder rights plan) entitling them, for a period of not more than 45 calendar days after the announcement date of such issuance, to subscribe for or purchase shares of Common Stock at a price per share that is less than the average of the Last Reported Sale Prices of Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, the Conversion Rate shall be increased based on the following formula:
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where,
CR0 | = | the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such issuance; | ||||||
CR1 | = | the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date; | ||||||
OS0 | = | the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date; | ||||||
| X | = | the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and | ||||||
| Y | = | the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants, divided by the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants. | ||||||
Any increase made under this Section 14.04(b) shall be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the open of business on the Ex-Dividend Date for such issuance. To the extent that shares of the Common Stock are not delivered after the expiration of such rights, options or warrants, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights, options or warrants are not so issued, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such Ex-Dividend Date for such issuance had not occurred.
For purposes of this Section 14.04(b) and Section 14.01(b)(ii)(A), in determining whether any rights, options or warrants entitle the holders of Common Stock to subscribe for or purchase shares of the Common Stock at a price per share that is less than such average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of 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 Company in good faith.
iii.If the Company distributes shares of its Capital Stock, evidences of its indebtedness,
other assets or property of the Company or rights, options or warrants to acquire its Capital Stock or other securities of the Company, 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) distributions of rights pursuant
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to a stockholder rights plan of the Company except as set forth in Section 14.11, (iii) dividends or distributions paid exclusively in cash as to which the provisions of Section 14.04(d) shall apply, (iv) distributions of Reference Property in a transaction described in Section 14.07 and (v) Spin-Offs as to which the provisions set forth below in this Section 14.04(c) shall apply (any of such shares of Capital Stock, evidences of indebtedness, other assets or property or rights, options or warrants to acquire Capital Stock or other securities, the “Distributed Property”), then the Conversion Rate shall be increased based on the following formula:
where,
CR0 | = | the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution; | ||||||
CR1 | = | the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date; | ||||||
SP0 | = | the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and | ||||||
| FMV | = | the fair market value (as determined by the Company in good faith) of the Distributed Property with respect to each outstanding share of the Common Stock on the Ex-Dividend Date for such distribution. | ||||||
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 paid or made, the Conversion Rate shall be decreased to the Conversion Rate that would then be in effect if such distribution had not been declared. Notwithstanding the foregoing, if “FMV” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of the Common Stock receive the Distributed Property, the amount and kind of Distributed Property such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Conversion Rate in effect on the Ex-Dividend Date for the distribution.
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 any 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:
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where,
CR0 | = | the Conversion Rate in effect immediately prior to the end of the Valuation Period; | ||||||
CR1 | = | the Conversion Rate in effect immediately after the end of the Valuation Period; | ||||||
FMV0 | = | the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of the Common Stock applicable to one share of the Common Stock (determined by reference to the definition of Last Reported Sale Price as set forth in Section 1.01 as if references therein to Common Stock were to such Capital Stock or similar equity interest) over the first 10 consecutive Trading Day period after, and including, the Ex-Dividend Date of the Spin-Off (the “Valuation Period”); provided that, if there is no Last Reported Sale Price of the Capital Stock or similar equity interest distributed to holders of the Common Stock on such Ex-Dividend Date, the “Valuation Period” shall be the 10 consecutive Trading Day period after, and including the first Trading Day such Last Reported Sale Price is available; and | ||||||
MP0 | = | the average of the Last Reported Sale Prices of the Common Stock over the Valuation Period. | ||||||
The increase to the Conversion Rate under the preceding paragraph shall occur at the close of business on the last Trading Day of the Valuation Period; provided that (x) in respect of any conversion of Notes for which Physical Settlement is applicable, if the relevant Conversion Date occurs during the Valuation Period, references to “10” in the portion of this Section 14.04(c) related to Spin-Offs shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date of such Spin-Off to, and including, the Conversion Date in determining the Conversion Rate and (y) in respect of any conversion of Notes for which Cash Settlement or Combination Settlement is applicable, for any Trading Day that falls within the relevant Observation Period for such conversion and within the Valuation Period, references to “10” in the portion of this Section 14.04(c) related to Spin-Offs shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date of such Spin-Off to, and including, such Trading Day in determining the Conversion Rate as of such Trading Day. If any dividend or distribution that constitutes a Spin-Off is declared but not so paid or made, the Conversion Rate shall be immediately decreased, effective as of the date the Company determines not to pay or make such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared or announced.
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
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adjustment (if any is required) to the Conversion Rate shall be made under this Section 14.04(c). If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Ex-Dividend Date with respect to new rights, options or warrants with such rights (in which case the existing rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders thereof). In addition, in the event of any distribution (or deemed distribution) of rights, options or warrants, or any Trigger Event or other event (of the type described in the immediately preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 14.04(c) was made, (1) in the case of any such rights, options or warrants that shall all have been redeemed or purchased without exercise by any holders thereof, upon such final redemption or purchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and (y) the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by a holder or holders of Common Stock with respect to such rights, options or warrants (assuming such holder had retained such rights, options or warrants), made to all holders of Common Stock as of the date of such redemption or purchase, and (2) in the case of such rights, options or warrants that shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights, options and warrants had not been issued.
For purposes of Section 14.04(a), Section 14.04(b) and this Section 14.04(c), if any dividend or distribution to which this Section 14.04(c) is applicable also includes one or both of:
a.a dividend or distribution of shares of Common Stock to which Section 14.04(a) is applicable (the “Clause A Distribution”); or
b.a dividend or distribution of rights, options or warrants to which Section 14.04(b) is applicable (the “Clause B Distribution”),
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).
iv.If any cash dividend or distribution is made to all or substantially all holders of the Common Stock, the Conversion Rate shall be adjusted based on the following formula:
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where,
CR0 | = | the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution; | ||||||
CR1 | = | the Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution; | ||||||
SP0 | = | the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and | ||||||
| C | = | the amount in cash per share the Company distributes to all or substantially all holders of the Common Stock. | ||||||
Any increase pursuant to this Section 14.04(d) shall become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Rate shall be decreased, effective as of the date the Board of Directors determines not to make or pay such dividend or distribution, to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared. Notwithstanding the foregoing, if “C” (as defined above) is equal to or greater than “SP0” (as defined above), in lieu of the foregoing increase, each Holder of a Note shall receive, for each $1,000 principal amount thereof, at the same time and upon the same terms as holders of shares of the Common Stock, the amount of cash that such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Conversion Rate in effect on the Ex-Dividend Date for such cash dividend or distribution.
v.If the Company or any of its Subsidiaries makes a payment in respect of a tender or exchange offer for the Common Stock (other than an odd-lot tender offer), 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:
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where,
CR0 | = | the Conversion Rate in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; | ||||||
CR1 | = | the Conversion Rate in effect immediately after the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; | ||||||
| AC | = | the aggregate value of all cash and any other consideration (as determined by the Company in good faith) paid or payable for shares of Common Stock purchased in such tender or exchange offer; | ||||||
OS0 | the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); | |||||||
OS1 | the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and | |||||||
SP1 | = | the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires. | ||||||
The increase to the Conversion Rate under this Section 14.04(e) shall occur at the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; provided that (x) in respect of any conversion of Notes for which Physical Settlement is applicable, if the relevant Conversion Date occurs during the 10 Trading Days immediately following, and including, the Trading Day next succeeding the expiration date of any tender or exchange offer, references to “10” or “10th” in this Section 14.04(e) shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the date that such tender or exchange offer expires to, and including, the Conversion Date in determining the Conversion Rate and (y) in respect of any conversion of Notes for which Cash Settlement or Combination Settlement is applicable, for any Trading Day that falls within the relevant Observation Period for such conversion and within the 10 Trading Days immediately following, and including, the Trading Day next succeeding the expiration date of any tender or exchange offer, references to “10” or “10th” in this Section 14.04(e) shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the expiration date of such tender or exchange offer to, and including, such Trading Day in determining the Conversion Rate as of such Trading Day.
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vi.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.
vii.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.
viii.In addition to those adjustments required by clauses (a), (b), (c), (d) and (e) of this Section 14.04, and subject to the applicable listing standards of The New York Stock Exchange, 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, subject to the applicable listing standards of The New York Stock Exchange, the Company may (but is not required to) increase the applicable Conversion Rate to avoid or diminish income tax to holders of Common Stock or rights to purchase shares of Common Stock in connection with a dividend or distribution of shares of Common Stock (or rights to acquire shares of Common Stock) or similar event.
ix.Notwithstanding anything to the contrary in this Article 14, the Conversion Rate shall not be adjusted:
1.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;
2.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 or incentive plan or program of or assumed by the Company or any of the Company’s Subsidiaries;
3.upon the issuance of any shares of 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;
4.upon the repurchase of shares of Common Stock pursuant to an open-market share repurchase program or other buy-back transaction (including, without limitation, structured or derivative transactions such as an accelerated share repurchase transaction) that is not a tender offer or exchange offer of the nature described in Section 14.04(e);
5.solely for a change in the par value of the Common Stock; or
6.for accrued and unpaid interest, if any.
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x.The Company shall not be required to make an adjustment pursuant to clauses (a), (b), (c), (d) or (e) of this Section 14.04 unless such adjustment would result in a change of at least 1% of the then effective Conversion Rate. However, the Company shall carry forward any adjustment that the Company would otherwise have to make and take that adjustment into account in any subsequent adjustment. Notwithstanding the foregoing, all such carried-forward adjustments shall be made with respect to the Notes must be given effect upon the earliest to occur of the following: (i) where the aggregate of all such carried-forward adjustments equals or exceeds 1% of the Conversion Rate, (ii) on the Conversion Date for any Notes (in the case of Physical Settlement), (iii) on each Trading Day of any Observation Period with respect to any Notes (in the case of Cash Settlement or Combination Settlement), (iv) on the effective date of any Fundamental Change or the Effective Date of any Make-Whole Fundamental Change or (v) November 15, 2027, in each case, unless such adjustment has already been made. 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.
xi.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 (i) the Conversion Rate after such adjustment, (ii), the date and/or time as of which such adjustment is effective, (iii) the subsection(s) of this Section 14.04 pursuant to which such adjustment has been made and (iv) 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 deliver such notice of such adjustment of the Conversion Rate to each Holder. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.
xii.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 1.0e.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, without limitation, an Observation Period and the period, if any, for determining the Stock Price for purposes of a Make-Whole Fundamental Change), the Company 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 of the event occurs, at any time during the period when the Last Reported Sale Prices, the Daily VWAPs, the Daily Conversion Values or the Daily Settlement Amounts are to be calculated.
Section 1.0f.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 is applicable).
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Section 1.0g.Effect of Recapitalizations, Reclassifications and Changes of the Common Stock.
i.In the case of:
1.any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination or solely from changes in par value to the Common Stock),
2.any consolidation, merger or combination involving the Company,
3.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
4.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(f) providing for such change in the right to convert each $1,000 principal amount of Notes; provided, however, that at and after the effective time of the Merger Event (A) the Company or the successor or purchasing corporation, as the case may be, shall continue to have the right to determine, subject to the Conversion Share Cap, 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 received in such Merger Event and (III) the Daily VWAP shall be calculated based on the value of a unit of Reference Property.
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 the weighted average of 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 second Business Day immediately following the relevant Conversion
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Date. The Company shall notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) in writing of such weighted average as soon as reasonably practicable after such determination is made.
Such supplemental indenture described in the second immediately preceding paragraph shall provide for anti-dilution and other adjustments that are as nearly equivalent as 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 (excluding cash) of a Person other than the Company or the successor or purchasing corporation, as the case may be, in such Merger Event, then such supplemental indenture shall also be executed by such other Person (if such other Person is an Affiliate of the Company or the successor or purchasing corporation, as the case may be) and shall contain such additional provisions to protect the interests of the Holders as the Company reasonably considers necessary by reason of the foregoing, including the provisions providing for the purchase rights set forth in Article 15.
ii.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 deliver or cause to be delivered notice thereof to all Holders. The Company shall cause notice of the execution of such supplemental indenture to be delivered to each Holder within 20 days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.
iii.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.
iv.The above provisions of this Section shall similarly apply to successive Merger Events.
v.Upon the consummation of any Merger Event, references to “Common Stock” shall be deemed to refer to any Reference Property that constitutes Common Equity after giving effect to such Merger Event.
Section 1.0h.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.
i.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.
ii.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 1.0i.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
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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 conclusively 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). Neither the Trustee nor any other agent acting under this Indenture (other than the Company, if acting in such capacity) shall have any obligation to make any calculation or to determine whether the Notes may be surrendered for conversion pursuant to this Indenture, or to notify the Company or the Depositary or any of the Holders if the Notes have become convertible pursuant to the terms of this Indenture.
Section 1.0j.Notice to Holders Prior to Certain Actions. In case of any:
i.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; or
ii.voluntary or involuntary dissolution, liquidation or winding-up of the Company;
then, in each case (unless notice of such event is otherwise required pursuant to another provision of this Indenture), the Company shall cause to be filed with the Trustee and the Conversion Agent (if other than the Trustee) and to be delivered to each Holder, 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 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 dissolution, liquidation or winding-up. Failure
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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, dissolution, liquidation or winding-up.
Section 1.0k.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 so that the Holders would not be entitled to receive any rights in respect of Common Stock, if any, issuable upon conversion of the Notes, the Conversion Rate shall be adjusted at the time of separation as if the Company distributed to all or substantially all holders of the Common Stock Distributed Property as provided in Section 14.04(c), subject to readjustment in the event of the expiration, termination or redemption of such rights.
15.
Repurchase of Notes at Option of Holders
Repurchase of Notes at Option of Holders
Section 1.0a.Intentionally Omitted.
Section 1.0b.Repurchase at Option of Holders Upon a Fundamental Change. (a) If a Fundamental Change occurs at any time prior to the Maturity Date, each Holder shall have the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Notes, or any portion of the principal amount thereof properly surrendered and not validly withdrawn pursuant to Section 15.03 that is equal to $1,000 or a multiple of $1,000, on the date (the “Fundamental Change Repurchase Date”) specified by the Company that is not less than 20 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, on such Interest Payment Date, the full amount of accrued and unpaid interest to the Holder of record as of the close of business on 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. Any Notes so repurchased by the Company shall be paid for in cash.
i.Repurchases of Notes under this Section 15.02 shall be made, at the option of the Holder thereof, upon:
1.delivery to the Paying Agent by a Holder of a duly completed written 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 applicable 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
2.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
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with the applicable 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:
3.in the case of Physical Notes, the certificate numbers of the Notes to be delivered for repurchase;
4.the portion of the principal amount of Notes to be repurchased, which must be $1,000 or a multiple thereof; and
5.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.
ii.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, the Trustee, the Conversion Agent (if other than 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 resulting 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:
1.the events causing the Fundamental Change;
2.the effective date of the Fundamental Change;
3.the last date on which a Holder may exercise the repurchase right pursuant to this Article 15;
4.the Fundamental Change Repurchase Price;
5.the Fundamental Change Repurchase Date;
6.the name and address of the Paying Agent and the Conversion Agent, if applicable;
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7.if applicable, the Conversion Rate and any adjustments to the Conversion Rate as a result of such Fundamental Change (or related Make-Whole Fundamental Change);
8.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 validly withdraws the Fundamental Change Repurchase Notice in accordance with the terms of this Indenture; and
9.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, given at least five days prior to the date the Fundamental Change Company Notice is to be sent, the Trustee (or other Paying Agent appointed in respect of any offer to repurchase Notes pursuant to this Article 15, if not 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.
iii.Notwithstanding the foregoing, no Notes may be repurchased by the Company on any date at the option of the Holders upon a Fundamental Change if the principal amount of the Notes has been accelerated, and such acceleration has not been rescinded, on or prior to such date (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Repurchase Price with respect to such Notes). The Paying Agent will promptly return to the respective Holders thereof any Physical Notes held by it during the acceleration of the Notes (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Repurchase Price with respect to such Notes), or any instructions for book-entry transfer of the Notes in compliance with the applicable 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.
iv.The Company shall not be required to repurchase or make an offer to repurchase Notes upon the occurrence of a Fundamental Change otherwise required under this Section 15.02 if a third party makes such an offer to purchase Notes in the same manner, at the same time and otherwise in compliance with the requirements for an offer made by the Company as set forth in this Indenture and such third party purchases all Notes properly surrendered and not validly withdrawn under such offer to purchase.
v.Notwithstanding anything to the contrary, the Company shall not be required to send a Fundamental Change Repurchase Notice, or offer to repurchase or repurchase any Notes pursuant to this Article 15 in connection with a Fundamental Change occurring pursuant to clause (b)(A) or (B) (or pursuant to clause (a) that also constitutes a Fundamental Change occurring pursuant to clause (b)(A) or (B)) of the definition thereof, if: (A) such Fundamental Change constitutes a Merger Event whose Reference Property consists entirely of cash in U.S. dollars; (B) immediately after such Fundamental Change, the Notes become convertible (pursuant to the provisions of Section 14.07 and, if applicable, Section 14.03) into consideration that consists solely of U.S. dollars in an amount per $1,000 principal amount of Notes that equals or exceeds the Fundamental Change Repurchase Price per $1,000 principal amount of Notes (calculated assuming that the same includes accrued interest to, but excluding, the latest possible Fundamental Change Repurchase Date for such Fundamental Change); and (C) the Company
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timely sends the notice relating to such Fundamental Change required pursuant to the provisions of Section 14.01(b)(iii).
Section 1.0c.Withdrawal of Fundamental Change Repurchase Notice. (a) A Fundamental Change Repurchase Notice with respect to Notes represented by Physical Notes may be withdrawn (in whole or in part) by means of a written notice of withdrawal delivered to the Paying Agent in accordance with this Section 15.03 at any time prior to the close of business on the Business Day immediately preceding the relevant Fundamental Change Repurchase Date, specifying:
1.the principal amount of the Notes with respect to which such notice of withdrawal is being submitted, which must be $1,000 or a multiple thereof,
2.if Physical Notes have been issued, the certificate numbers of the Notes in respect of which such notice of withdrawal is being submitted, and
3.the principal amount, if any, of such Notes that remains subject to the original Fundamental Change Repurchase Notice, which portion must be in principal amounts of $1,000 or a multiple of $1,000;
If, however, the Notes are Global Notes, withdrawal of any such Notes tendered for repurchase must comply with appropriate procedures of the Depositary.
Section 1.0d.Deposit of Fundamental Change Repurchase Price. (a) The Company will deposit with the Trustee (or other Paying Agent appointed by the Company, or if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in Section 4.04) on or prior to 11:00 a.m., New York City time, on the Fundamental Change Repurchase Date an amount of money sufficient to repurchase all of the Notes to be repurchased at the appropriate Fundamental Change Repurchase Price. Subject to receipt of funds and/or Notes by the Trustee (or other Paying Agent appointed by the Company), payment for Notes surrendered for repurchase (and not withdrawn prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date) will be made on the later of (i) the Fundamental Change Repurchase Date (provided the Holder has satisfied the conditions in Section 15.02) and (ii) the time of book-entry transfer or the delivery of such Note to the Trustee (or other Paying Agent appointed by the Company) by the Holder thereof in the manner required by Section 15.02 by mailing checks for the amount payable to the Holders of such Notes entitled thereto as they shall appear in the Note Register; provided, however, that payments to the Depositary shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee. The Trustee (or other Paying Agent) shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Fundamental Change Repurchase Price.
i.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 pay the Fundamental Change Repurchase Price of the Notes to be repurchased on the Fundamental Change Repurchase Date, then, with respect to the Notes that have been properly surrendered for repurchase and have not been validly withdrawn in accordance with the provisions of this Indenture, (i) such Notes will cease to be outstanding, (ii) interest will cease to accrue on such Notes (whether or not book-entry transfer of the Notes has been made or the Notes have been delivered to the Trustee or Paying Agent) and (iii) all other rights of the Holders of such Notes will terminate (other than the right to receive the Fundamental Change Repurchase Price).
ii.Upon surrender of a Physical Note that is to be repurchased in part pursuant to Section 15.02, the Company shall execute and the Trustee shall authenticate and deliver to the
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Holder a new Physical Note in an authorized denomination equal in principal amount to the unrepurchased portion of the Note so surrendered.
For purposes of this Article 15 only, “Paying Agent” shall include any depositary, tender agent, paying agent or other agent appointed by the Company or other party conducting an offer to repurchase Notes pursuant to and in compliance with this Article 15 for the purposes of conducting such offer in the time and the manner specified in this Article 15.
Section 1.0e.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:
i.comply with the provisions of any tender offer rules under the Exchange Act that may then be applicable;
ii.file a Schedule TO or any other required schedule under the Exchange Act; and
iii.otherwise comply with all 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.
16.
OPTIONAL REDEMPTION
OPTIONAL REDEMPTION
Section 1.0a.Optional Redemption. The Notes shall not be redeemable by the Company prior to August 6, 2025. On or after August 6, 2025, the Company may, at its option, redeem (an “Optional Redemption”) for cash all or any portion of the Notes, at the Redemption Price, if the Last Reported Sale Price of the Common Stock has been at least 130% of the Conversion Price then in effect for at least 20 Trading Days (whether or not consecutive) during any 30 consecutive Trading Day period (including the last Trading Day of such period) ending on, and including, the Trading Day immediately preceding the date on which the Company provides the Redemption Notice in accordance with Section 16.02.
Section 1.0b.Notice of Optional Redemption; Selection of Notes. (a) In case the Company exercises its Optional Redemption right to redeem all or, as the case may be, any part of the Notes pursuant to Section 16.01, it shall fix a date for redemption (each, a “Redemption Date”) and it or, at its written request received by the Trustee not less than 5 Business Days prior to the date such Redemption Notice is to be sent (or such shorter period of time as may be acceptable to the Trustee), the Trustee, in the name of and at the expense of the Company, shall deliver or cause to be delivered a written notice of such Optional Redemption (a “Redemption Notice”) not less than 60 nor more than 75 calendar days prior to the Redemption Date to the Trustee, the Conversion Agent (if other than the Trustee), the Paying Agent (if other than the Trustee) and each Holder of Notes so to be redeemed as a whole or in part; provided that if the Company elects Physical Settlement pursuant to Section 14.02(a), the Company may provide not less than 15 nor more than 45 calendar days’ written notice prior to the relevant Redemption Date; and provided further, that if the Company does not so elect Physical Settlement in respect of any such Optional Redemption, any Redemption Notice Date must be at least one calendar day prior to the first Scheduled Trading Day of any related Observation Period. The Redemption Date must be a Business Day.
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i.The Redemption Notice, if delivered in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice. In any case, failure to give such Redemption Notice or any defect in the Redemption Notice to the Holder of any Note designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Note.
ii.Each Redemption Notice shall specify:
1.the Redemption Date;
2.the Redemption Price;
3.that on the Redemption Date, the Redemption Price will become due and payable upon each Note to be redeemed, and that interest thereon, if any, shall cease to accrue on and after the Redemption Date;
4.the place or places where such Notes are to be surrendered for payment of the Redemption Price;
5.that Holders may surrender their Notes for conversion at any time prior to the close of business on the second Scheduled Trading Day immediately preceding the Redemption Date;
6.the procedures a converting Holder must follow to convert its Notes and the Settlement Method and Specified Dollar Amount, if applicable;
7.the Conversion Rate and, if applicable, the number of Additional Shares added to the Conversion Rate in accordance with Section 14.03;
8.the CUSIP, ISIN or other similar numbers, if any, assigned to such Notes; and
9.in case any Note is to be redeemed in part only, the portion of the principal amount thereof to be redeemed and on and after the Redemption Date, upon surrender of such Note, a new Note in principal amount equal to the unredeemed portion thereof shall be issued, which principal amount must be $1,000 or a multiple thereof.
A Redemption Notice shall be irrevocable.
iii.If fewer than all of the outstanding Notes are to be redeemed, the Notes to be redeemed will be selected according to the Depositary’s applicable procedures, in the case of Notes represented by a Global Note, or, in the case of Notes represented by Physical Notes, the Trustee shall select, in such manner as it shall deem appropriate and fair, Notes to be redeemed in whole or in part (in minimum denominations of $1,000 and multiples of $1,000 in excess thereof). If any Note selected for partial redemption is submitted for conversion in part after such selection, the portion of the Note submitted for conversion shall be deemed (so far as may be possible) to be the portion selected for redemption, subject, in the case of Notes represented by a Global Note, to the Depositary’s applicable procedures.
Section 1.0c.Payment of Notes Called for Redemption. (a) If any Redemption Notice has been given in respect of the Notes in accordance with Section 16.02, the Notes shall become due and payable on the Redemption Date at the place or places stated in the Redemption Notice and at the applicable Redemption Price. On presentation and surrender of the Notes at the place
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or places stated in the Redemption Notice, the Notes shall be paid and redeemed by the Company at the applicable Redemption Price.
i.Prior to 11:00 a.m. New York City time on the Redemption Date, the Company shall deposit with the Paying Agent or, if the Company or a Subsidiary of the Company is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 7.05 an amount of cash (in immediately available funds if deposited on the Redemption Date), sufficient to pay the Redemption Price of all of the Notes to be redeemed on such Redemption Date. Subject to receipt of funds by the Paying Agent, payment for the Notes to be redeemed shall be made on the Redemption Date for such Notes. The Paying Agent shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Redemption Price.
Section 1.0d.Restrictions on Redemption. The Company may not redeem any Notes on any date if the principal amount of the Notes has been accelerated in accordance with the terms of this Indenture, and such acceleration has not been rescinded, on or prior to the Redemption Date (except in the case of an acceleration resulting from a Default by the Company in the payment of the Redemption Price with respect to such Notes).
17.
Miscellaneous Provisions
Miscellaneous Provisions
Section 1.0a.Provisions Binding on Company’s Successors. All the covenants, stipulations, promises and agreements of the Company contained in this Indenture shall bind its successors and assigns whether so expressed or not.
Section 1.0b.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 1.0c.Addresses for Notices, Etc. Any notice that by any provision of this Indenture is required or permitted to be given by the Trustee or by the Holders to the Company shall be deemed to have been sufficiently given or made, for all purposes if given by overnight courier or 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 8x8, Inc., 675 Creekside Way, Campbell, CA 95008, 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 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 delivered or to be delivered to a Holder of Physical Notes shall be mailed to it by first class mail, postage prepaid, at its address as it appears on the Note Register and shall be sufficiently given to it if so mailed within the time prescribed. Any notice or communication delivered or to be delivered to a Holder of Global Notes shall be delivered in accordance with the applicable procedures of the Depositary and shall be sufficiently given to it if so delivered within the time prescribed. Notwithstanding any other provision of this Indenture or any Note, where this Indenture or any Note provides for notice of any event (including any Fundamental Change Company Notice) to a Holder of a Global Note (whether by mail or
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otherwise), such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the standing instructions from the Depositary or its designee, including by electronic mail in accordance with the Depositary’s applicable procedures.
Failure to mail or deliver a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed or delivered, as the case may be, 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 1.0d.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.
The Company irrevocably consents and agrees, for the benefit of the Holders from time to time of the Notes and the Trustee, that any legal action, suit or proceeding against it with respect to obligations, liabilities or any other matter arising out of or in connection with this Indenture or the Notes may be brought in the courts of the State of New York or the courts of the United States located in the Borough of Manhattan, New York City, New York and, until amounts due and to become due in respect of the Notes have been paid, hereby irrevocably consents and submits to the non-exclusive jurisdiction of each such court in personam, generally and unconditionally with respect to any action, suit or proceeding for itself in respect of its properties, assets and revenues.
The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this Indenture brought in the courts of the State of New York or the courts of the United States located in the Borough of Manhattan, New York City, New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
Section 1.0e.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, if requested by the Trustee, an Opinion of Counsel stating that such action is permitted by the terms of this Indenture and, in the opinion of the signors, all conditions precedent and covenants, if any, provided for in this Indenture relating to such action have been complied with; 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, (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 (unless a new Note is to be issued and authenticated (in which case the Opinion of Counsel required by Section 2.04 shall be delivered)) or (z) a request by the Company that the Trustee deliver a notice to Holders under this Indenture where the Trustee receives an Officer’s Certificate with respect to such notice. With respect to matters of fact, an Opinion of Counsel may rely on an Officer’s Certificate or certificates of public officials.
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Each Officer’s Certificate and Opinion of Counsel provided for, by or on behalf of the Company in this Indenture and delivered to the Trustee with respect to compliance with this Indenture (other than the 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 whether all conditions precedent to such action have been complied with; and (d) a statement as to whether or not, in the judgment of such person, such action is permitted by this Indenture and that all conditions precedent thereto have been complied with.
Section 1.0f.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 1.0g.No Security Interest Created. Nothing in this Indenture or in the Notes, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.
Section 1.0h.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 1.0i.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 1.0j.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.
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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.
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.
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.
as Authenticating Agent, certifies that this is one of the Notes described
in the within-named Indenture.
By:
Authorized Signatory
Authorized Signatory
Section 1.0k.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, PDF or other electronic 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, PDF or other electronic transmission shall constitute effective execution and delivery of this Indenture as to the other parties hereto shall be deemed to be their original signatures for all purposes.
Section 1.0l.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 1.0m.Waiver of Jury Trial. EACH OF THE COMPANY, THE TRUSTEE AND THE HOLDERS BY THEIR ACCEPTANCE OF THE NOTES 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 1.0n.Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, epidemics, pandemics, quarantines, national emergency, ransomware or malware attacks and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the
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Trustee shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
Section 1.0o.Calculations. The Company shall be responsible for making all calculations called for under the Notes and this Indenture. These calculations include, but are not limited to, determinations of the Stock Price, the Last Reported Sale Prices of the Common Stock, the Trading Prices of the Notes (for purposes of determining whether the Notes are convertible pursuant to Section 14.01(b)(i)), the Daily VWAPs, the Daily Conversion Values, the Conversion Share Cap, the Daily Settlement Amounts, accrued interest payable on the Notes (including, for the avoidance of doubt, any Additional Interest payable under this Indenture), the Conversion Rate and the Conversion Price of the Notes. The Company shall make all these calculations in good faith and, absent manifest error, the Company’s calculations shall be final and binding on Holders. The Company shall provide a schedule of its calculations to each of the Trustee and the Conversion Agent (if other than the Trustee), and each of the Trustee and Conversion Agent (if other than the Trustee) is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The Trustee will forward the Company’s calculations to any Holder upon the written request of that Holder.
Section 1.0p.U.S.A. PATRIOT Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. PATRIOT Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.
Section 1.0q.Tax Withholding. The Company or the Trustee, as the case may be, shall be entitled to make a deduction or withholding from any payment which it makes under this Indenture for or on account of any present or future taxes, duties or charges if and to the extent so required by any applicable law and any current or future regulations or agreements thereunder or official interpretations thereof or any law implementing an intergovernmental approach thereto or by virtue of the relevant Holder failing to satisfy any certification or other requirements in respect of the Notes, in which event the Company or the Trustee, as the case may be, shall make such payment after such withholding or deduction has been made and shall account to the relevant authorities for the amount so withheld or deducted and shall have no obligation to gross up any payment hereunder or pay any additional amount as a result of such withholding tax.
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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.
8X8, INC.
By:
Name: Steven Gatoff
Title: Chief Financial Officer
Name: Steven Gatoff
Title: Chief Financial Officer
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee
By:
Name:
Title:
Name:
Title:
[Signature Page to Indenture]
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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.
8X8, INC.
By:
Name:
Title:
Name:
Title:
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee
By:
Name
Title: Vice President
Name
Title: Vice President
[Signature Page to Indenture]
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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 8X8, 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) DECEMBER 14, 2022 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.
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PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER FOR THE COMPANY TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
PRIOR TO REMOVAL OF THIS LEGEND, NO AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF 8X8, INC. OR PERSON THAT HAS BEEN AN AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF 8X8, INC. DURING THE IMMEDIATELY PRECEDING THREE MONTHS MAY PURCHASE, OTHERWISE ACQUIRE OR HOLD THIS SECURITY OR A BENEFICIAL INTEREST HEREIN.]
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8x8, Inc.
4.00% Convertible Senior Note due 2028
No. RA-[●] Initially $201,914,000
CUSIP No. 282914 AD22
8x8, 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., or registered assigns, the principal sum as set forth in the “Schedule of Exchanges of Notes” attached hereto, which amount, taken together with the principal amounts of all other outstanding Notes, shall not, unless permitted by the Indenture, exceed $201,914,000 in aggregate at any time, in accordance with the rules and applicable procedures of the Depositary, on February 1, 2028, and interest thereon as set forth below.
This Note shall bear interest at the rate of 4.00% per year from and including August 11, 2022, or from and including the most recent date to which interest has been paid or provided for to, but excluding, the next scheduled Interest Payment Date until February 1, 2028. Accrued interest on this Note shall be computed on the basis of a 360-day year composed of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month. Interest is payable semi-annually in arrears on each February 1 and August 1, commencing on February 1, 2023, to Holders of record at the close of business on the preceding February 1 and August 1 (whether or not such day is a Business Day), respectively. Additional Interest will be payable as set forth in Section 4.06(d), Section 4.06(e) and Section 6.03 of the within-mentioned Indenture, and any reference to interest on, or in respect of, any Note therein shall be deemed to include Additional Interest if, in such context, Additional Interest is, was or would be payable pursuant to any of such Section 4.06(d), Section 4.06(e) or Section 6.03, and any express mention of the payment of Additional Interest in any provision therein shall not be construed as excluding Additional Interest in those provisions thereof where such express mention is not made.
Any Defaulted Amounts shall accrue interest per annum at the rate borne by the Notes, from, and including, the relevant payment date to, but excluding, the date on which such Defaulted Amounts shall have been paid by the Company, at its election, in accordance with Section 2.03(c) of the Indenture.
The Company shall pay the principal of and interest on this Note, if and so long as such Note is a Global Note, in immediately available funds in lawful money of the United States at the time to the Depositary or its nominee, as the case may be, as the registered Holder of such Note. As provided in and subject to the provisions of the Indenture, the Company shall pay the principal of any Notes (other than Notes that are Global Notes) at the office or agency designated by the Company for that purpose. The Company has initially designated the Trustee as its Paying Agent and Note Registrar in respect of the Notes and its Corporate Trust Office in the continental United States of America, as a place where Notes may be presented for payment or for registration of transfer and exchange.
2 This Note will be deemed to be identified by CUSIP No. 282914 AE0 from and after such time when the Company delivers, pursuant to Section 2.05(c) of the within-mentioned Indenture, written notice to the Trustee of the occurrence of the Resale Restriction Termination Date and the removal (or deemed removal) of the restrictive legend affixed to this Note in accordance with the applicable procedures of the Depositary (including, but not limited to, with respect to a mandatory exchange of restricted securities for unrestricted securities pursuant to Rule 144A) and such Section 2.05(c).
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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.
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]
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
8X8, INC.
By:
Name:
Title:
Name:
Title:
Dated:
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
WILMINGTON TRUST, NATIONAL ASSOCIATION
as Trustee, certifies that this is one of the Notes described
in the within-named Indenture.
as Trustee, certifies that this is one of the Notes described
in the within-named Indenture.
By:
Authorized Signatory
Authorized Signatory
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[FORM OF REVERSE OF NOTE]
8x8, Inc.
4.00% Convertible Senior Note due 2028
4.00% Convertible Senior Note due 2028
This Note is one of a duly authorized issue of Notes of the Company, designated as its 4.00% Convertible Senior Notes due 2028 (the “Notes”), initially limited to the aggregate principal amount of $201,914,000 all issued or to be issued under and pursuant to an Indenture dated as of August 11, 2022 (the “Indenture”), between the Company and Wilmington Trust, National Association (the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Notes. 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, as defined in the Indenture, 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 Redemption Price and 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 herein prescribed.
The Notes are issuable in registered form without coupons in minimum denominations of $1,000 principal amount and 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
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upon such exchange of Notes being different from the name of the Holder of the old Notes surrendered for such exchange.
The Notes shall be redeemable at the Company’s option on or after August 6, 2025, in accordance with the terms and subject to the conditions specified in the Indenture. No sinking fund is provided for the Notes
Upon the occurrence of a Fundamental Change, the Holder has the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Notes or any portion thereof (in principal amounts of $1,000 or multiples thereof) on the Fundamental Change Repurchase Date at a price equal to the Fundamental Change Repurchase Price.
Subject to the provisions of the Indenture, the Holder hereof has the right, at its option, during certain periods and upon the occurrence of certain conditions specified in the Indenture, prior to the close of business on the second Scheduled Trading Day immediately preceding the Maturity Date, to convert any Notes or portion thereof that is $1,000 or a 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.
Terms used in this Note and defined in the Indenture are used herein as therein defined.
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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.
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SCHEDULE A
SCHEDULE OF EXCHANGES OF NOTES
8x8, Inc.
4.00% Convertible Senior Notes due 2028
4.00% Convertible Senior Notes due 2028
The initial principal amount of this Global Note is TWO HUNDRED AND ONE MILLION, NINE HUNDRED AND FOURTEEN THOUSAND DOLLARS ($201,914,000). The following increases or decreases in this Global Note have been made:
| Date of exchange | Amount of decrease in principal amount of this Global Note | Amount of increase in principal amount of this Global Note | Principal amount of this Global Note following such decrease or increase | Signature of authorized signatory of Trustee or Custodian | ||||||||||
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ATTACHMENT 1
[FORM OF NOTICE OF CONVERSION]
To: 8x8, Inc.
To: Wilmington Trust, National Association
50 South Sixth Street, Suite 1290
Minneapolis, MN 55402
Attention: 8x8 Inc., Account Manager
50 South Sixth Street, Suite 1290
Minneapolis, MN 55402
Attention: 8x8 Inc., Account Manager
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 a 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.
| Dated: | |||||||||||
| Signature(s) | |||||||||||
Signature Guarantee
Signature(s) must be guaranteed
by an eligible Guarantor Institution
(banks, stock brokers, savings and
loan associations and credit unions)
with membership in an approved
signature guarantee medallion program
pursuant to Securities and Exchange
Commission Rule 17Ad-15 if shares
of Common Stock are to be issued, or
Notes are to be delivered, other than
to and in the name of the registered holder.
by an eligible Guarantor Institution
(banks, stock brokers, savings and
loan associations and credit unions)
with membership in an approved
signature guarantee medallion program
pursuant to Securities and Exchange
Commission Rule 17Ad-15 if shares
of Common Stock are to be issued, or
Notes are to be delivered, other than
to and in the name of the registered holder.
Fill in for registration of shares if
to be issued, and Notes if to
to be issued, and Notes if to
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be delivered, other than to and in the
name of the registered holder:
| (Name) | |||||
| (Street Address) | |||||
| (City, State and Zip Code) | |||||
| Please print name and address | |||||
| Principal amount to be converted (if less than all): | |||||
| $______,000 | |||||
| NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever. | |||||
| Social Security or Other Taxpayer Identification Number | |||||
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ATTACHMENT 2
[FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]
To: 8x8, Inc.
To: [Address of Trustee of other Paying Agent appointed pursuant to Article 15 of the Indenture]
The undersigned registered owner of this Note hereby acknowledges receipt of a notice from 8x8, 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 a 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:
| Dated: | |||||||||||
| Signature(s) | |||||||||||
| Social Security or Other Taxpayer Identification Number | |||||||||||
Principal amount to be repurchased (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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ATTACHMENT 3
[FORM OF ASSIGNMENT AND TRANSFER]
Wilmington Trust, National Association
50 South Sixth Street, Suite 1290
Minneapolis, MN 55402
Attention: 8x8 Inc., Account Manager
50 South Sixth Street, Suite 1290
Minneapolis, MN 55402
Attention: 8x8 Inc., Account Manager
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 8x8, Inc. or a subsidiary thereof; or
☐ Pursuant to a registration statement that has become or been declared effective under the Securities Act of 1933, as amended; or
☐ Pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or
☐ Pursuant to and in compliance with Rule 144 under the Securities Act of 1933, as amended, or any other available exemption from the registration requirements of the Securities Act of 1933, as amended.
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Dated:
Signature(s)
Signature Guarantee
Signature(s) must be guaranteed by an
eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and
credit unions) with membership in an approved
signature guarantee medallion program pursuant
to Securities and Exchange Commission
Rule 17Ad-15 if Notes are to be delivered, other
than to and in the name of the registered holder.
eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and
credit unions) with membership in an approved
signature guarantee medallion program pursuant
to Securities and Exchange Commission
Rule 17Ad-15 if Notes are to be delivered, other
than to and in the name of the registered holder.
NOTICE: The signature on the assignment must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.
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Annex A
Term Sheet
PRICING TERM SHEET
DATED August 03, 2022
8X8, INC.
4.00% Convertible Senior Notes due 2028
The information in this pricing term sheet supplements the exchange agreement related to the New Notes between you and 8x8, Inc. in connection with the proposed transaction (the “Exchange Agreement”), and supersedes the information in the Exchange Agreement to the extent inconsistent with the information in the Exchange Agreement. This term sheet is qualified in its entirety by reference to the New Indenture (as defined below). References to “8x8,” “we,” “our” and “us” refer to 8x8, Inc. and not to its subsidiaries. Terms used herein but not defined herein shall have the respective meanings as set forth in the Exchange Agreement or New Indenture, as applicable. In the event of any inconsistency between defined terms in each of the Exchange Agreement and the New Indenture, terms used but not defined herein shall have the meaning as set forth in the New Indenture. All references to dollar amounts are references to U.S. dollars.
| Issuer: | 8x8, Inc. (“8x8”) | |||||||
| Ticker/Exchange for Common Stock: | EGHT / The New York Stock Exchange (“NYSE”) | |||||||
| New Notes: | 4.00% Convertible Senior Notes due 2028 (the “New Notes”) | |||||||
| New Indenture: | The indenture will be in substantially the form of Exhibit D of the Exchange Agreement. | |||||||
| Existing Notes: | On February 19, 2019, we issued our 0.50% Convertible Senior Notes due 2024, in an aggregate principal amount of $287.5 million (the “Initial Notes”) under the indenture, dated as of February 19, 2019, between us and Wilmington Trust, National Association (the "2019 Indenture"). On November 21, 2019, we issued additional 0.50% Convertible Senior Notes due 2024, in an aggregate principal amount of $75 million (the “First Reopening Notes”) under the 2019 Indenture. On December 14, 2021, we issued additional 0.50% Convertible Senior Notes due 2024, in an aggregate principal of $137.5 million (the “Second Reopening Notes,” and together with the Initial Notes and First Reopening Notes, the “Existing Notes”) under the 2019 Indenture. | |||||||
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| Exchange Consideration: | The Exchange Consideration will be: (i) a principal amount of New Notes equal to the product of the Exchange Ratio and the Exchanged Principal Amount (rounded down to the nearest integral multiple of $1,000 principal amount, if applicable (the difference being referred to as the “Rounded Amount”)); and (ii) cash in an amount equal to the sum of (x) $450 multiplied by the Exchanged Principal Amount divided by $1,000, (y) an amount equal to the accrued and unpaid interest, if any, on the Exchanged Existing Notes from, and including, August 1, 2022, to, but excluding, the Closing Date, and (z) the Rounded Amount. | |||||||
| Exchange Ratio: | 0.5000 New Notes (each having a denomination of $1,000 principal amount) for each $1,000 principal amount of Exchanged Existing Notes. | |||||||
| NYSE Last Reported Sale Price of the Common Stock on the Pricing Date: | $5.61 per share of our common stock, par value $0.001 (the "Common Stock") | |||||||
| Conversion Premium for New Notes: | Approximately 27.5% above the NYSE Last Reported Sale Price of the Common Stock on the Pricing date | |||||||
| Conversion Price for New Notes: | Approximately $7.15 | |||||||
| Conversion Rate for New Notes: | 139.8064 shares of Common Stock per $1,000 principal amount of New Notes | |||||||
| Settlement Upon Conversion: | We will settle any conversions of the New Notes by paying or delivering cash, shares of our Common Stock or a combination thereof, at our election. | |||||||
| Coupon for New Notes: | 4.00% per annum | |||||||
| Placement Agent: | J. Wood Capital Advisors LLC | |||||||
| Pricing Date: | August 3, 2022. | |||||||
| Trade Date: | August 4, 2022. | |||||||
| Expected Settlement Date: | August 11, 2022. | |||||||
| Maturity Date for New Notes | February 1, 2028 | |||||||
| CUSIP Number (144A): | 282914 AD2 | |||||||
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| Transfer Restrictions: | We have not registered the New Notes or the shares of Common Stock issuable upon the conversion of the New Notes, if any, under the Securities Act, and we will not be required to do so. Notwithstanding that an Exchanging Holder may hold unrestricted Existing Notes, any New Notes issued in exchange for such unrestricted Existing Notes will initially be represented by a restricted CUSIP number and will bear legends substantially in the form set forth in Section 2.05 of the New Indenture. The New Notes and any shares of Common Stock issuable upon the conversion of the New Notes will be subject to the restrictions on transfer described in such legends. The Company will use commercially reasonable efforts to cause New Notes which satisfy the conditions to delegending set forth in Section 2.05(c) of the New Indenture to be Unrestricted New Notes (as defined below), which we expect to occur on or promptly following December 14, 2022. “Unrestricted New Notes” means New Notes that are (i) free of the 144A Legends and (ii) represented by (or deemed represented by) an unrestricted CUSIP number. | |||||||
| Listing: | None. | |||||||
| Share Repurchase: | In order to facilitate the Exchange, the Company expects to use up to approximately $60 million of cash on hand to repurchase approximately 10,695,187 of the outstanding shares of Common Stock in privately negotiated transactions at a price per share of the NYSE Last Reported Sale Price of the Common Stock on the Pricing Date, from certain purchasers of the New Notes. These repurchases could increase, or prevent a decrease in, the market price of the Common Stock or the New Notes and the Existing Notes. | |||||||
| Concurrent Senior Debt Transaction: | On or around the date of pricing of the New Notes, we expect to enter into a $250 million secured term loan facility. The New Notes will effectively rank junior in right of payment to such facility to the extent of the value of assets securing such facility and will be structurally subordinated to such facility to the extent of the subsidiary guarantees of such facility. On or around the date of pricing of the New Notes, we also expect to issue detachable warrants exercisable for 3.1 million of our Common Stock with a five year term and a strike price equal to the Conversion Price for New Notes. | |||||||
| Adjustment to Conversion Rate for New Notes upon Conversion upon a Make-Whole Fundamental Change Effective Date or Redemption Notice Date: | The table below sets forth the amount, if any, by which the Conversion Rate for New Notes will be increased per $1,000 principal amount of New Notes upon conversion upon a Make-Whole Fundamental Change Effective Date or Redemption Notice Date, subject to the terms of and as described in the New Indenture for each stock price and Effective Date or Redemption Notice Date set forth below, as applicable. | |||||||
| Aggregate Principal Amount of New Notes to be Issued in the Exchange: | $201,914,000 | |||||||
| Aggregate Principal of Old Notes Exchanged in Exchange: | $403,835,000 | |||||||
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| Cash Paid for Repurchased Old Notes: | $181,785,338.19 | |||||||
| Conversion Share Cap: | The New Indenture as executed will not include a cap on the number of shares of Common Stock deliverable upon conversion if the Company determines that such a cap is not required to comply with the listing standards of the NYSE. | |||||||
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| Make-Whole Fundamental Change Effective Date or Redemption Notice Date | ||||||||||||||||||||||||||||||||
| $5.61 | $6.00 | $7.15 | $7.50 | $9.30 | $12.00 | $14.00 | $20.00 | $30.00 | $40.00 | |||||||||||||||||||||||
| August 11, 2022 | 38.4467 | 38.4467 | 27.6020 | 25.1680 | 16.3240 | 9.3917 | 6.5264 | 2.3965 | 0.3417 | 0.0000 | ||||||||||||||||||||||
| August 01, 2023 | 38.4467 | 38.4283 | 26.9687 | 24.4480 | 15.4422 | 8.6333 | 5.9093 | 2.0995 | 0.2660 | 0.0000 | ||||||||||||||||||||||
| August 01, 2024 | 38.4467 | 37.8567 | 25.7440 | 23.1320 | 14.0333 | 7.5175 | 5.0386 | 1.7215 | 0.1817 | 0.0000 | ||||||||||||||||||||||
| August 01, 2025 | 38.4467 | 36.2650 | 23.4162 | 20.7267 | 11.7394 | 5.8658 | 3.8164 | 1.2470 | 0.1023 | 0.0000 | ||||||||||||||||||||||
| August 01, 2026 | 38.4467 | 33.4733 | 19.5505 | 16.7893 | 8.2733 | 3.6558 | 2.2971 | 0.7350 | 0.0400 | 0.0000 | ||||||||||||||||||||||
| August 01, 2027 | 38.4467 | 28.7250 | 12.1226 | 9.3373 | 2.9252 | 1.0742 | 0.7000 | 0.2445 | 0.0003 | 0.0000 | ||||||||||||||||||||||
| February 1, 2028 | 38.4467 | 26.8600 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | ||||||||||||||||||||||
The exact stock prices and effective dates or redemption notice dates may not be set forth in the table above, in which case:
•if the stock price is between two stock prices in the table above or the effective date or the redemption notice date, as the case may be, is between two effective dates or redemption notice dates, as applicable, in the table above, the number of additional shares by which the Conversion Rate for New Notes shall be increased and be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock prices and the earlier and later effective dates or redemption notice dates, as applicable, based on a 365-day year;
•if the stock price is greater than $40.00 per share (subject to adjustment as set forth in the New Indenture), no additional shares shall be added to the Conversion Rate for New Notes; and
•if the stock price is less than $5.61 per share (subject to adjustment as set forth in the New Indenture), no additional shares shall be added to the Conversion Rate for New Notes.
Notwithstanding the foregoing, in no event shall the Conversion Rate per $1,000 principal amount of New Notes exceed 178.2531 shares of Common Stock, subject to adjustment in the same manner as the Conversion Rate for New Notes pursuant to Section 14.04 of the New Indenture.
[Remainder of Page Intentionally Blank]
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This communication is intended for the sole use of the person to whom it is provided by the sender. This material is confidential and is for your information only and is not intended to be used by anyone other than you. This information does not purport to be a complete description of the New Notes or the offering of New Notes.
This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities nor shall there be any sale of these securities in any jurisdiction in which such solicitation or sale would be unlawful prior to registration or qualification of these securities under the laws of such jurisdiction.
The New Notes and any shares of Common Stock issuable upon conversion thereof have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws. Accordingly, the New Notes are being offered and sold only to persons who are “qualified institutional buyers” as defined in Rule 144A promulgated under the Securities Act. The New Notes and any shares of Common Stock issued upon conversion thereof are not transferable except in accordance with the restrictions described in the legends set forth in Section 2.05(c) of the New Indenture.
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
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Execution Version
Term Loan Credit Agreement | ||
Dated as of
August 3, 2022
among
8x8, Inc.,
as Borrower,
as Borrower,
Fuze, INC. and 8x8 International Holding Co.,
as Guarantors
WILMINGTON SAVINGS FUND SOCIETY, FSB,
as Administrative Agent,
as Administrative Agent,
and
| The Lenders Party Hereto | ||
876672.08-LACSR02A - MSW
TABLE OF CONTENTS
Page No.
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ANNEXES, EXHIBITS AND SCHEDULES
Annex I Maximum Credit Amount
Exhibit A Form of Note
Exhibit B Form of Borrowing Request
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Assumption
Exhibit E-1 Form of U.S. Tax Compliance Certificate (Foreign Lenders; not partnerships)
Exhibit E-2 Form of U.S. Tax Compliance Certificate (Foreign Participants; not partnerships)
Exhibit E-3 Form of U.S. Tax Compliance Certificate (Foreign Participants; partnerships)
Exhibit E-4 Form of U.S. Tax Compliance Certificate (Foreign Lenders; partnerships)
Exhibit F Form of Joinder Agreement
Schedule 7.20 Subsidiaries
Schedule 9.02 Existing Debt
Schedule 9.03 Existing Liens
Schedule 9.05 Existing Investments
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TERM LOAN CREDIT AGREEMENT
This Term Loan Credit Agreement, dated as of August 3, 2022, is among 8x8, Inc., a Delaware corporation (the “Borrower”), Fuze, Inc., a Delaware corporation (“Fuze”), 8x8 International Holding Co., a Delaware corporation (“International Holding”, and together with Fuze, the initial “Guarantors”) each of the Lenders from time to time party hereto, and Wilmington Savings Fund Society, FSB, as administrative agent for the Lenders (in such capacity, together with its successors, the “Administrative Agent”).
R E C I T A L S
A.Immediately prior to the Effective Date, $500.0 million aggregate principal amount of the Borrower’s 0.50% convertible senior notes due 2024 (the “2024 Notes”) are outstanding under that certain indenture dated as of February 19, 2019, between the Borrower, as issuer, and Wilmington Trust, National Association, as trustee.
B.The Borrower has requested the Lenders to provide a $250.0 million term loan facility (the “Term Loan Facility”) on the terms and conditions set forth herein, the proceeds of which shall be used to refinance the 2024 Notes in part and to fund the working capital needs and other general corporate purposes of the Borrower.
C.The Lenders have agreed to provide the Term Loan Facility on the terms and conditions set forth herein.
D.In consideration of the mutual covenants and agreements herein contained and of the loans, extensions of credit and commitments hereinafter referred to, the parties hereto agree as follows:
Article I
DEFINITIONS AND ACCOUNTING MATTERS
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01Certain Defined Terms. As used in this Agreement, the following terms have the meanings specified below:
“2024 Notes” has the meaning assigned to such term in the recitals to this Agreement.
“Account Control Agreement” means an agreement that grants the Administrative Agent “control” as defined in the UCC in effect in the applicable jurisdiction over the applicable Deposit Account, Commodity Account or Securities Account, in form and substance reasonably acceptable to the Majority Lenders and to the Administrative Agent, in respect of its rights and duties.
“Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations thereunder. Any reference to a specific provision in the Act shall include any successor provision thereto.
“Adjusted Cash EBITDA” means, with respect to the Borrower and the Consolidated Subsidiaries for any period, an amount equal to, without duplication:
(a) Income/Loss From Operations of the Borrower and the Consolidated Subsidiaries for such period; plus
(b) to the extent deducted in the calculation of Income/Loss From Operations for such period, the sum of (i) depreciation, (ii) amortization of intangible assets, and (iii) stock-based compensation expense; plus
(c) the sum of (i) amortization of capitalized internal-use software costs for such period and (ii) amortization of deferred sales commission costs for such period; plus
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(d) solely to the extent such amount appears as a reduction on the consolidated statement of cash flows of the Borrower and adding back such amounts would reduce the calculation of Adjusted Cash EBITDA for such period, the sum of (i) deferred sales commission costs for such period and (ii) capitalized internal-use software costs for such period; plus
(e) all unusual, infrequent and/or non-recurring losses for such period (calculated net of all unusual, infrequent and/or non-recurring gains for such period) (including, without limitation, any acquisition and integration costs, legal and regulatory costs and severance, transition and contract termination costs) in an aggregate amount not to exceed the greater of $15.0 million and 15% of Adjusted Cash EBITDA for such period (after giving effect to any add-back under this clause (e)); plus
(f) other expenses, losses and charges agreed to in writing (with e-email being sufficient) by the Majority Lenders.
“Adjusted Term SOFR” means, for purposes of any calculation, the rate per annum equal to (a) Term SOFR for such calculation plus (b) the Term SOFR Adjustment; provided that if Adjusted Term SOFR as so determined shall ever be less than the Floor, then Adjusted Term SOFR shall be deemed to be the Floor.
“Administrative Agent” has the meaning given in the introductory paragraph.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent or such other form as may be reasonably acceptable to the Administrative Agent.
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affected Loans” has the meaning assigned to such term in Section 5.05.
“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. “Affiliated” shall have a correlative meaning. Neither the Administrative Agent nor any Lender shall be, or deemed to be, an Affiliate of the Borrower.
“Agent Parties” has the meaning given to such term in Section 12.16.
“Agents” means, collectively, the Administrative Agent and any other agent appointed hereunder from time to time, and “Agent” shall mean any of them, as the context requires.
“Agreement” means this Term Loan Credit Agreement, as the same may from time to time be amended, restated, amended and restated, supplemented or otherwise modified.
“Anti-Corruption Laws” means the FCPA and the U.K. Bribery Act 2010 and all Governmental Requirements of any jurisdiction applicable to any Credit Party or any of their Affiliates from time to time concerning or relating to bribery or corruption.
“Anti-Terrorism Laws” means Executive Order No. 13224 (effective September 24, 2001), the Money Laundering Control Act of 1986 (18 U.S.C. §§ 1956-1957), the Patriot Act, the laws comprising or implementing the Bank Secrecy Act (31 U.S.C. §§5311-5332)), the laws administered by OFAC, the UK Proceeds of Crime Act 2002, the UK Terrorism Act 2000 and all Governmental Requirements related to terrorist financing or anti-money laundering, including know-your-customer and financial recordkeeping and reporting requirements.
“Applicable Margin” means a percentage per annum equal to 6.50%.
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“Applicable Premium” has the meaning assigned to such term in Section 3.03(c).
“Applicable Premium Triggering Event” means (A) any voluntary prepayment of Loans pursuant to Section 3.03 or otherwise, (B) any mandatory prepayment of Loans pursuant to Section 3.03(b)(i), (C) any mandatory assignment of Loans pursuant to Section 5.04(b), and/or (D) an acceleration of Loans (after an Event of Default, by operation of law or otherwise).
“Applicable Rate” means at all times other than during a Benchmark Unavailability Period, Adjusted Term SOFR, and during a Benchmark Unavailability Period, the Base Rate.
“Approved Fund” means with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit in the ordinary course of its business, any other fund that invests in bank loans and similar extensions of credit in the ordinary course of its business and is managed by or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.
“Asset Disposition” means the sale, conveyance, transfer, license, lease or other disposition of any Property (including any disposition of Equity Interests) by any Credit Party or any Subsidiary thereof to another Person that is not a Credit Party and/or any issuance of Equity Interests by any Subsidiary to any Person that is not a Credit Party; provided that an issuance of Equity Interests by the Borrower shall not be an Asset Disposition.
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 12.04(b)), and accepted by the Administrative Agent, in the form of Exhibit D or any other form approved by the Administrative Agent in its reasonable discretion.
“Available Liquidity” means, at any time, all Unrestricted cash and Unrestricted Cash Equivalents of the Borrower and its Subsidiaries at such time.
“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement or (y) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark pursuant to this Agreement, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 3.05.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Base Rate” means, for any day, a rate per annum equal to the highest of (a) the Prime Rate in effect on such day and (b) the Federal Funds Rate in effect on such day plus 0.50%. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Rate, respectively.
“Base Rate Loan” means any Loan which bears interest at or by reference to the Base Rate.
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“Benchmark” means, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 3.05.
“Benchmark Replacement” means with respect to any Benchmark Transition Event, the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and Borrower giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then-current Benchmark for Dollar-denominated syndicated credit facilities and (b) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and Borrower giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities.
“Benchmark Replacement Date” means the earlier to occur of the following events with respect to the then-current Benchmark:
(1) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event”, the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or
(2) in the case of clause (c) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by or on behalf of the administrator of such Benchmark (or such component thereof) or the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative or non-compliant with or non-aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks; provided that such non-representativeness, non-compliance or non-alignment will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
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“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:
(a)a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
(b)a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(c)a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) or the regulatory supervisor for the administrator of such Benchmark (or such component thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative or in compliance with or aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Start Date” means, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).
“Benchmark Unavailability Period” means, the period (if any) (a) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 3.05 and (b) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 3.05.
“Board” means the Board of Governors of the Federal Reserve System of the United States of America or any successor Governmental Authority.
“Bona Fide Debt Fund” means any debt fund, investment vehicle, regulated bank entity or unregulated lending entity that is engaged primarily in making, purchasing, holding or otherwise
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investing in loans, bonds and similar extensions of credit in the ordinary course of business for financial investment purposes and with respect to which no personnel involved with the investment in the relevant competitor of the Borrower or any Subsidiary, or the management, control or operation thereof, directly or indirectly, possesses the power to direct the investment policies of such fund, vehicle or entity.
“Borrower” has the meaning given in the introductory paragraph.
“Borrower Board” means the board of directors, board of managers or comparable authority of the Borrower.
“Borrowing” means any Loans.
“Borrowing Request” means a request by the Borrower for a Borrowing in accordance with Section 2.03.
“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City or Wilmington, Delaware are authorized or required by law to remain closed; provided, that for purposes of determining the rate of interest applicable to any Loan the reference rate for which utilizes Term SOFR and for any notice periods related to the borrowing or continuation of, or the conversion into, a SOFR Loan, “Business Day” shall exclude any day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“Capital Leases” means, in respect of any Person, subject to Section 1.03, all leases that shall have been, or should have been, in accordance with GAAP, recorded as finance leases on the balance sheet of the Person liable (whether contingent or otherwise) for the payment of rent thereunder.
“Cash Equivalents” means: (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of one year or less from the date of acquisition issued by any Lender or by any commercial bank organized under the laws of the United States or any state thereof, having combined capital and surplus of not less than $100,000,000; (c) commercial paper of an issuer rated at least “investment grade” by S&P or “investment grade” by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within one year or less from the date of acquisition; (d) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A-2 by Moody’s; (e) money market, mutual or similar funds that invest in assets that constitute at least ninety-five percent (95.0%) of the type of assets satisfying the requirements of clauses (a) through (d) of this definition; (f) money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $250,000,000; (g) fully collateralized repurchase agreements with a term of not more than 180 days for securities described in clauses (a) through (d) above and entered into with a financial institution satisfying the criteria described in clause (b) above; (h) instruments equivalent to those referred to in clauses (a) through (g) above denominated in any foreign currency comparable in credit quality and tenor to those referred to above and commonly used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business conducted by any Subsidiary of the Borrower organized in such jurisdiction; and (i) any other investments described in the Borrower Board approved investment policy as of October 1, 2020.
“Change in Control” means an event or series of events by which
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(a) (1) any Person or (2) Persons constituting a “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such Person and its subsidiaries and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), becomes the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under such Act), directly or indirectly, of Equity Interests representing more than thirty-five percent (35%) of the aggregate ordinary voting power or economic interests represented by the issued and outstanding Equity Interests of the Borrower, provided, that, notwithstanding the foregoing, a Person shall not be deemed to have “beneficial ownership” of Equity Interests subject to a stock purchase agreement merger agreement or similar agreement until the consummation of the transactions contemplated by such agreement; or
(b) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets (determined by reference to fair market value of such properties and assets at the time of such sale, lease, transfer, conveyance or other disposition) of the Borrower and its Subsidiaries taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act).
“Change in Law” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided, however, for the purposes of this Agreement, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, guidelines or directives in connection therewith or promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision or the United States or foreign leverage regulatory authorities, in each case, pursuant to Basel III, are deemed to have gone into effect and to have been adopted after the date of this Agreement.
“Claims” has the meaning assigned to such term in Section 12.23(a).
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute (in each case, except as otherwise provided herein).
“Collateral” means any Property owned by the Borrower or any Guarantor that is subject to the Liens existing and to exist under the terms of the Security Instruments; provided that, notwithstanding anything to the contrary in the Loan Documents, Collateral shall not include any Excluded Property.
“Commitment” means, with respect to each Lender, the commitment of such Lender to make Loans hereunder. The amount of each Lender’s Effective Date Commitment is set forth on Annex I.
“Commodity Account” shall have the meaning set forth in Article 9 of the UCC.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute and any regulations promulgated thereunder.
“Compliance Certificate” means a certificate of a Financial Officer of the Borrower substantially in the form attached as Exhibit C.
“Conforming Changes” means, with respect to either the use or administration of Adjusted Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “Interest Period” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, and other technical, administrative or operational matters)
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that the Administrative Agent decides (with the consent of Borrower, not to be unreasonably withheld or delayed) may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Administrative Agent decides (with the consent of Borrower, not to be unreasonably withheld or delayed) is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated Subsidiaries” means each Subsidiary of the Borrower (whether now existing or hereafter created or acquired) the financial statements of which shall be (or should have been) consolidated with the financial statements of the Borrower in accordance with GAAP.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. For purposes of this definition, and without limiting the generality of the foregoing, any Person that owns directly or indirectly 10% or more of the Equity Interests having ordinary voting power for the election of the directors or other governing body of a Person (other than as a limited partner of such other Person) will be deemed to Control such other Person if there is no other Person that owns directly or indirectly a greater percentage of such Equity Interests. “Controlling” and “Controlled” have meanings correlative thereto.
“Convertible Notes” means debt securities, the terms of which provide for conversion into, or exchange for, common stock (other than Disqualified Capital Stock) of the Borrower, cash in lieu thereof and/or a combination of common stock (other than Disqualified Capital Stock) of the Borrower and cash in lieu thereof.
“Copyrights” means all right, title and interest in and to all copyrights, whether registered or unregistered, held pursuant to the laws of the United States or of any other country, all continuations, renewals or extensions thereof, and all registrations and recordings thereof and all applications in connection therewith.
“Credit Parties” means, collectively, the Borrower and any Guarantor, and “Credit Party” means any one of the foregoing.
“Debt” means, for any Person, without duplication: (a) all obligations of such Person for borrowed money or evidenced by bonds, bankers’ acceptances, debentures, notes or other similar instruments; (b) all obligations of such Person (whether contingent or otherwise) in respect of letters of credit, surety or other bonds and similar instruments; (c) all obligations of such Person to pay the deferred purchase price of Property or services, except for (i) earn-out obligations until such obligation is reflected on the balance sheet of such Person in accordance with GAAP, (ii) accruals for employee compensation accrued in the ordinary course of business and (iii) trade accounts payable in the ordinary course of business, provided such accounts are no more than 75 days past due; (d) the principal component of all obligations under Capital Leases; (e) all Debt (as defined in the other clauses of this definition) of others secured by a Lien on any Property of such Person, whether or not such Debt is assumed by such Person to the extent of the lesser of the amount of such Debt and the orderly liquidation value of such Property; (f) all Guarantees by such Person of Debt (as defined in the other clauses of this definition) of others; (g) Disqualified Capital Stock; and (h) net obligations of such Person under any Swap Agreement. The Debt of any Person shall include all obligations of such Person of the character described above to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is not included as a liability of such Person under GAAP. For the avoidance of doubt, “Debt” shall not include the obligations of any Person to pay rent or other amounts under any lease (or other arrangement conveying the right to use) of real or personal property, or a combination thereof, which obligations
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would be required to be classified and accounted for as an operating lease under GAAP (subject to Section 1.03 hereof).
“Default” means any event or condition that constitutes an Event of Default or that upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, (i) to fund any portion of its Loans or (ii) to pay to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified in such writing, including, if applicable, by reference to a specific Default) has not been satisfied, (b) has notified the Borrower or the Administrative Agent in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good-faith determination that a condition precedent (specifically identified in such writing, including, if applicable, by reference to a specific Default) to funding a Loan cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower made in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund prospective Loans, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon the Administrative Agent’s or the Borrower’s, as applicable, receipt of such certification in form and substance satisfactory to it, or (d) has become, or is a subsidiary of a Person that has become, the subject of a bankruptcy or insolvency proceeding or a Bail-In Action.
“Deposit Account” shall have the meaning set forth in Article 9 of the UCC.
“Disqualified Capital Stock” means any Equity Interest that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event, (a) matures (excluding any maturity as a result of an optional redemption by the issuer thereof) or is mandatorily redeemable for any consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock) and cash in lieu of fractional shares of such Equity Interests, pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Secured Obligations that are accrued and payable and the termination of the Commitments), (b) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for Debt or (c) is redeemable for any consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock) and cash in lieu of fractional shares of such Equity Interests at the option of the holder thereof (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Secured Obligations that are accrued and payable and the termination of the Commitments), in whole or in part, or (d) provides for the scheduled payment of dividends in cash, in each case of the foregoing clauses (a) through (d), on or prior to the date that is ninety-one (91) days after the earlier of (i) the Maturity Date and (ii) the date on which there are no Loans or other Secured Obligations hereunder outstanding and all of the Commitments are terminated; provided that if such Equity Interests are issued to any employee or pursuant to a plan for the benefit of the Borrower or its Subsidiaries or by any such plan to such officers or employees, such Equity Interests shall not constitute Disqualified Capital Stock solely because they may be required to be repurchased by the Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, resignation, death or disability and if any class of Equity Interests of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Equity Interests that is not Disqualified Capital Stock, such Equity Interests shall not be deemed to be Disqualified Capital Stock.
“Disqualified Institution” means (a) any Person that is (directly or through a controlled subsidiary) a competitor of the Borrower or the Subsidiaries and that was separately identified in writing by the Borrower to the Administrative Agent, or (b) any Affiliate of any Person identified in clause (a)
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(other than any Affiliate that is a Bona Fide Debt Fund) that (i) was identified in writing by the Borrower to the Administrative Agent or (ii) is clearly identifiable as an Affiliate on the basis of the similarity of its name to the name of such Person identified in clause (a); provided that (x) no designation of any Person as a Disqualified Institution shall apply retroactively to disqualify any Persons that have previously acquired an interest in Loans or Commitments and (y) any such designation shall only become effective three Business Days after delivery thereof to the Administrative Agent.
“dollars” or “$” refers to lawful money of the United States of America.
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of the United States of America or any state thereof or the District of Columbia; provided that no Subsidiary of a Foreign Subsidiary shall be a Domestic Subsidiary.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Effective Date” means the date on which the conditions specified in Section 6.01 are satisfied (or waived in accordance with Section 12.02).
“Effective Date Commitment” means, as of the Effective Date, an aggregate principal amount of two hundred fifty million dollars ($250,000,000). The amount of each Lender’s Effective Date Commitment is set forth on Annex I.
“Environmental Claim” means any claim, action, cause of action, investigation or notice (written or oral) by any Person alleging potential liability (including, without limitation, an obligation to conduct a cleanup or potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, or penalties) arising out of, based on or resulting from (a) the presence or release of any Hazardous Materials at any location, whether or not owned, leased or operated by Borrower or any of its Subsidiaries, or (b) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law.
“Environmental Laws” means any and all Governmental Requirements pertaining in any way to health, safety, the environment or the preservation or reclamation of natural resources, in effect in any and all jurisdictions in which any Credit Party is conducting or at any time has conducted business, or where any Property of any Credit Party is located, including the Clean Air Act, as amended, the Comprehensive Environmental, Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution Control Act, as amended, the Resource Conservation and Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, and other environmental conservation or protection Governmental Requirements. The terms “hazardous substance” and “release” (or “threatened release”) shall have the meanings specified in CERCLA, and the terms “solid waste” and “disposal” (or “disposed”) shall have the meanings specified in RCRA); provided, however, that (a) in the event either CERCLA, or RCRA is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply subsequent to the effective date of such amendment and (b) to the extent the laws of the state or other jurisdiction in which any Property of any Credit Party is located establish a meaning for
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“hazardous substance,” “release,” “solid waste,” or “disposal” which is broader than that specified in either CERCLA or RCRA, such broader meaning shall apply.
“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such Equity Interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statutes, and all regulations and guidance promulgated thereunder.
“ERISA Affiliate” means each trade or business (whether or not incorporated) that, together with the Borrower or any Subsidiary is treated as a “single employer” within the meaning of or under section 4001 of ERISA or subsections (b), (c), (m) or (o) of section 414 of the Code or is under “common control” with the Borrower or any Subsidiary within the meaning of or under Section 4001 of ERISA or Section 414 of the Code.
“ERISA Event” means (a) a “Reportable Event” with respect to a Plan other than a Multiemployer Plan as described in section 4043 of ERISA, other than an event as to which the provision of thirty (30) days’ notice to the PBGC is expressly waived under applicable regulations, (b) the withdrawal of the Borrower, any Subsidiary or any ERISA Affiliate from a Plan during a plan year in which it was a “substantial employer” as defined in section 4001(a)(2) of ERISA for which such entity has, or could reasonably be expected to have, liability, (c) the filing of a notice of intent to terminate a Plan or the treatment of a Plan amendment as a termination under section 4041 or 4041A of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, (e) receipt of a notice of withdrawal liability pursuant to section 4202 of ERISA with respect to a Multiemployer Plan or (f) any other event or condition which constitutes grounds under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
“Event of Default” has the meaning assigned to such term in Section 10.01.
“Exchange Transaction” means (i) the exchange of 2024 Notes in consideration for Permitted Convertible Notes and cash and (ii) the repurchase of up to $61,000,000 of the Borrower’s Equity Interests from purchasers of any Permitted Convertible Notes in connection with the establishing of a hedge position by such purchaser or a financial intermediary with respect to such Permitted Convertible Notes.
“Exchanged Notes” means any Convertible Notes that are issued by the Borrower, in one or more transactions, in exchange for any 2024 Notes; provided that (a) such Convertible Notes shall not have a final stated maturity earlier than ninety-one (91) days after the Maturity Date and shall not require any scheduled payment of principal earlier than the date that is ninety-one (91) days after the Maturity Date (it being understood that a repayment of principal in connection with a customary “fundamental change” holder put right shall not constitute a “scheduled payment of principal” for the purposes of this clause (a)), (b) such Convertible Notes are unsecured, (c) such Convertible Notes shall not be guaranteed by or otherwise recourse to any Person other than the Credit Parties, (d) such Convertible Notes do not include cross-defaults to the Loans (but may include cross-acceleration) and (e) the covenants and events of default applicable to such Convertible Notes shall not be more restrictive, taken as a whole, to the Borrower than the covenants and events of default contained in this Agreement (it being understood that customary provisions with respect to a “fundamental change” or any other provision that is customary with respect to convertible notes shall not be considered, for the purposes of this clause (e), to be more restrictive to the Borrower than the covenants and events of default contained in this Agreement).
“Excluded Account” means (a) any Deposit Account, Commodity Account or Securities Account so long as the balance in such Account does not exceed $1,000,000 at any time and the aggregate balance
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of all such Deposit Accounts, Commodity Accounts and Securities Accounts that constitute “Excluded Accounts” does not at any time exceed $2,000,000 and (b) any Deposit Account or Securities Account that is solely used for (i) payroll, payroll taxes and other employee wage and benefit accounts, (ii) sales tax accounts, (iii) bona fide escrow accounts for the benefit of Persons that are not Affiliates of the Borrower in connection with transactions not otherwise prohibited under any Loan Document and (iv) fiduciary or trust accounts for the benefit of Persons that are not Affiliates of the Borrower, and, in the case of clauses (a) through (b), the funds or other property held in or maintained in any such Deposit Account, Commodity Account or Securities Account.
“Excluded Equity Interests” means Equity Interests entitled to vote in any Foreign Subsidiary or FSHCO in excess of 65% of the issued and outstanding Equity Interests entitled to vote in such Foreign Subsidiary or FSHCO.
“Excluded Property” means (i) (a) any leasehold interest in real property, (b) any fee owned real property with a fair market value of $5,000,000 or less (estimated in good faith by the Borrower); provided that the aggregate fair market value of any such fee owned real property constituting “Excluded Property” shall not exceed $10,000,000, and (c) any fee owned real property located outside of the United States, (ii) motor vehicles, aircrafts and other assets subject to certificates of title, except to the extent a security interest therein can be perfected by the filing of a UCC financing statement, (iii) (a) letter of credit rights, except the extent perfection can be accomplished by filing of a UCC financing statement and (b) commercial tort claims in an amount reasonably estimated by the Borrower to be less than $500,000, (iv) pledges and security interests prohibited by any applicable law, rule or regulation (including the requirement to obtain consent of any Governmental Authority) after giving effect to the applicable anti-assignment provisions of the UCC or other applicable law, other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC or other applicable law notwithstanding such prohibition, (v) Equity Interests in any Person other than Wholly-Owned Subsidiaries to the extent not permitted by the terms of such Person’s organizational or joint venture documents without the consent of a third-party equity holder that is not an Affiliate of the Borrower after giving effect to the applicable anti-assignment provisions of the UCC or other applicable law, other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC or other applicable law notwithstanding such prohibition, (vi) any lease, permit, license or other agreement or any property subject to (a) a purchase money security interest or (b) Capital Lease obligations, in each case, to the extent the grant of a security interest therein would violate or invalidate such lease, permit, license or agreement, purchase money, Capital Lease obligations, or other arrangement or create a right of termination in favor of, or require the consent of, any other party thereto (other than the Borrower or any of its Subsidiaries) after giving effect to the applicable anti-assignment provisions of the UCC or other applicable law, other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the UCC or other applicable law notwithstanding such prohibition, (vii) those assets as to which the Majority Lenders and the Borrower reasonably agree that the cost of obtaining such security interest or perfection thereof are excessive in relation to the benefit to the Lenders of the security afforded thereby, (viii) Excluded Equity Interests, (ix) any governmental licenses or state or local franchises, charters and authorizations, to the extent security interests in such licenses, franchises, charters or authorizations are prohibited or restricted by the terms thereof after giving effect to the applicable anti-assignment provisions of the UCC or other applicable law, (x) any U.S. trademark application filed on the basis of an intent-to-use such trademark prior to the filing with and acceptance by the United States Patent and Trademark Office of a “Statement of Use” or “Amendment to Allege Use” with respect thereto pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15 U.S.C. §1051, et seq.), to the extent, if any, that, and solely during the period, if any, in which the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application under applicable federal law, (xi) Excluded Accounts, (xii) margin stock and (xiii) any property or interests in property blocked pursuant to any Sanctions; provided, however, “Excluded Property” shall not include any proceeds, products, substitutions or replacements of Excluded Property (unless such proceeds, products, substitutions or replacements would otherwise constitute Excluded Property).
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“Excluded Subsidiary” means any of the following:
(a)any Domestic Subsidiary with respect to which the Majority Lenders and the Borrower reasonably agree that the cost (or material adverse Tax consequences) of providing a guarantee of or granting Liens to secure the Secured Obligations would be excessive in relation to the benefit to be afforded thereby (each such Subsidiary, an “Immaterial Subsidiary”);
(a)each non-Wholly-Owned Subsidiary that is a bona fide joint venture with one or more third parties that are not Affiliates of the Borrower to the extent such Subsidiary is not permitted to provide a guarantee of the Secured Obligations by the terms of such Person’s organizational or joint venture documents without the consent of a third-party equity holder that is not an Affiliate of the Borrower; and
(b)any Foreign Subsidiary.
As of the Effective Date, LeChat, Inc., Optoriot Asia Holdings, Inc. and 8x8 Romania Holdings LLC are Immaterial Subsidiaries.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Agent, any Lender or any other recipient or required to be withheld or deducted from payment to any of the foregoing, (a) Taxes imposed on (or measured by) net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Agent, Lender or other recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, any United States federal withholding Tax that is imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to any law that was in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by Borrower under Section 5.04), or (ii) such Lender designates a new lending office, except in each case to the extent that amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office pursuant to Section 5.03, (c) Taxes attributable to such recipient’s failure to comply with Section 5.03(f) and 5.03(g) and (d) any United States federal withholding Taxes imposed by FATCA.
“Export-Import Control Laws” means (a) the U.S. Export Administration Regulations administered by the U.S. Department of Commerce, the International Traffic in Arms Regulations administered by the U.S. Department of State, and all other applicable Governmental Requirements concerning or relating to export controls; and (b) import controls and customs laws, rules and regulations administered by U.S. Customs and Border Protection and any other applicable Governmental Requirements concerning or relating to import controls or customs laws.
“FATCA” means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities entered into in connection with the implementation of such Sections of the Code.
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
“Federal Funds Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as the NYFRB shall set forth on its public website from time to time, and published on the next succeeding business day by the NYFRB as the federal funds effective rate, provided that if the Federal Funds Rate shall be less than zero, such rate shall be deemed to zero for the purposes of calculating such rate.
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“Fee Letter” means the fee letter, dated as of August 3, 2022, between the Borrower and the Administrative Agent.
“Financial Officer” means, for any Person, the chief financial officer, principal accounting officer, treasurer or controller of such Person. Unless otherwise specified, all references herein to a Financial Officer means a Financial Officer of the Borrower.
“Flood Insurance Regulations” means (a) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (b) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statute thereto, (c) the National Flood Insurance Reform Act of 1994 (amending 42 USC § 4001, et seq.), as the same may be amended or recodified from time to time, and (d) the Flood Insurance Reform Act of 2004 and any regulations promulgated thereunder.
“Floor” means a rate of interest equal to 1.00%.
“Foreign Lender” means any Lender that is not a U.S. Person.
“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.
“Francisco” means FP Credit Partners, L.P. and its Affiliates.
“FSHCO” means any Subsidiary substantially all the assets of which consist of Equity Interests in (or Equity Interests in and debt obligations owed or treated as owed by) one or more Foreign Subsidiaries and/or one or more Subsidiaries otherwise described in this definition.
“Future Convertible Notes” means any Convertible Notes that are issued by the Borrower, in one or more transactions, in exchange for any Exchanged Notes; provided that (a) such Convertible Notes shall not have a final stated maturity earlier than ninety-one (91) days after the Maturity Date and shall not require any scheduled payment of principal earlier than the date that is ninety-one (91) days after the Maturity Date (it being understood that a repayment of principal in connection with a customary “fundamental change” holder put right shall not constitute a “scheduled payment of principal” for the purposes of this clause (a)), (b) such Convertible Notes are unsecured, (c) such Convertible Notes shall not be guaranteed by or otherwise recourse to any Person other than the Credit Parties, (d) such Convertible Notes do not include cross-defaults to the Loans (but may include cross-acceleration), and (e) the covenants and events of default applicable to such Convertible Notes shall not be more restrictive, taken as a whole, to the Borrower than the covenants and events of default contained in this Agreement (it being understood that customary provisions with respect to a “fundamental change” or any other provision that is customary with respect to convertible notes shall not be considered, for the purposes of this clause (e), to be more restrictive to the Borrower than the covenants and events of default contained in this Agreement).
“GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time subject to the terms and conditions set forth in Section 1.03.
“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government over any Credit Party, any of their Properties, any Agent or any Lender.
“Governmental Requirement” means any applicable law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization or other directive or requirement, whether now or hereinafter in effect, including Environmental Laws, energy regulations and occupational, safety and health standards or controls, of any Governmental Authority.
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“Guarantee” means, as to any Person, without duplication, any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Debt or other monetary obligation of another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other monetary obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Debt or other monetary obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Debt or other monetary obligation of the payment or performance of such Debt or other monetary obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Debt or other monetary obligation or (iv) as an account party in respect of any letter of credit or letter of guaranty issued to support such Debt or other monetary obligation; provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business or customary and reasonable indemnity obligations or product warranties, including to the extent entered into in connection with any acquisition or disposition of assets not otherwise prohibited under this Agreement. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.
“Guarantors” means each Domestic Subsidiary that guarantees the Secured Obligations pursuant to Section 8.12.
“Hazardous Materials” means any material, substance or waste which is regulated by, or for which liability or standards of conduct may be imposed under, Environmental Law, including any material, substance or waste which is defined as a "hazardous material," "hazardous substance," "hazardous waste," "solid waste," "pollutant or contaminant," "toxic substance," or "toxic waste" under any provision of Environmental Law, and including petroleum or any fraction thereof, petroleum products, natural gas, natural gas liquids, radon, toxic mold, asbestos or asbestos-containing material, urea formaldehyde, per- or polyfluoroalkyl substances, and polychlorinated biphenyls.
“Highest Lawful Rate” means, with respect to each Lender, the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the Loans or on other Secured Obligations under laws applicable to such Lender which are presently in effect or, to the extent allowed by law, under such applicable laws, which may hereafter be in effect and which allow a higher maximum nonusurious interest rate than applicable laws allow as of the date hereof.
“IFRS” means international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements delivered under or referred to herein.
“Immaterial Subsidiary” has the meaning set forth in the definition of "Excluded Subsidiary".
“Income/Loss From Operations” means with respect to the Borrower and the Consolidated Subsidiaries, for any period, the aggregate of the income (or loss) from operations of the Borrower and the Consolidated Subsidiaries; provided that there shall be excluded from such income (or loss) from operations (to the extent otherwise included therein) the following: (a) the income (or loss) from operations of any Person in which the Borrower or any Consolidated Subsidiary has an interest (which interest does not cause the income (or loss) from operations of such other Person to be consolidated with the income (or loss) from operations of the Borrower and the Consolidated Subsidiaries in accordance with GAAP), except to the extent of the amount of dividends or distributions actually paid in cash during such period by such other Person to the Borrower or to a Consolidated Subsidiary, as the case may be; and (b) the income (but not loss) from operations during such period of any Consolidated Subsidiary to the extent that the declaration or payment of dividends or similar distributions or transfers or loans by that Consolidated Subsidiary is not at the time permitted by operation of the terms of its charter or any
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agreement, instrument or Governmental Requirement applicable to such Consolidated Subsidiary or is otherwise restricted or prohibited, in each case determined in accordance with GAAP.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligations of the Borrower or any Guarantor under any Loan Document, other than Excluded Taxes. and (b) to the extent not otherwise described in (a), Other Taxes.
“Information” has the meaning assigned such term in Section 12.11.
“Insurance and Condemnation Event” means the receipt by any Credit Party or any of its Subsidiaries of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of their respective Property.
“Intellectual Property” means all rights, title and interest in intellectual property, including all Copyrights, Trademarks, Patents, and Trade Secrets and any registrations related thereto or applications in connection therewith and all reissues, extensions, or renewals thereof; and goodwill associated with any of the foregoing, together with rights to sue for past, present and future infringement, of such intellectual property and any goodwill associated therewith, whether arising under the laws of United States or any other country.
“Intellectual Property Security Agreement” means an intellectual property security agreement entered into between a Credit Party and the Administrative Agent pursuant to the terms of the Security Agreement in form and substance agreed to by the Majority Lenders, in each case as amended, restated, supplemented or otherwise modified from time to time.
“Interest Payment Date” means with respect to any Loan, April 1, July 1, October 1 and January 1 of each fiscal year, commencing on October 1, 2022, provided that, if any Interest Payment Date is not a Business Day, the Interest Payment Date shall be the next Business Day following such original Interest Payment Date.
“Interest Period” means, with respect to any Loan (a) initially, the period commencing on the funding date of such Loan and ending one month thereafter, and (b) thereafter, each period commencing on the day following the last day of the preceding Interest Period applicable to such Loan and ending one month thereafter.
“Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement, each of which is (a) for the purpose of hedging the interest rate exposure associated with the Borrower and its Subsidiaries’ operations and (b) not for speculative purposes.
“Investment” has the meaning assigned thereto in Section 9.05.
“Lenders” means the Persons listed on Annex I and any Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
“Lien” means (i) any mortgage, deed of trust, pledge, hypothecation, assignment as collateral, encumbrance, lien (statutory or otherwise) or other security interest of any kind or nature whatsoever (including those created by, arising under or evidenced by any conditional sale or other title retention agreement, the interest of a lessor under a Capital Lease, or any financing lease having substantially the same economic effect as any of the foregoing), but not including the interest of a lessor under a lease which is not a Capital Lease, and (ii) in the case of Equity Interests or other securities, any purchase option, call or similar right of a third party with respect to such Equity Interests or other securities.
“Limited Condition Transaction” means any acquisition or any Investment that, in each case, is permitted under this Agreement and is not conditioned on the availability of, or on obtaining, third party
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financing; provided that if such transaction is not consummated within one hundred and eighty (180) days after the execution of the definitive agreement with respect thereto, such transaction shall no longer constitute a Limited Condition Transaction.
“Loan Documents” means this Agreement, the Notes, the Fee Letter, each Account Control Agreement now or hereafter executed, the Security Instruments, the Warrant Agreement and all other certificates, agreements or instruments delivered in connection with this Agreement, as the foregoing may be amended, restated, amended and restated, supplemented or modified from time to time.
“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.
“Majority Lenders” means Lenders holding more than fifty percent (50.0%) of the outstanding aggregate principal amount of the Loans (without regard to any sale by a Lender of a participation in any Loan under Section 12.04(c)).
“Make-Whole Amount” means, with respect to any Applicable Premium Triggering Event, at the time of computation thereof (the “Specified Date”), an amount equal to the excess, if any, of (i) the present value at such time of (x) the amount of interest that would have been payable on the principal amount of such Loans subject to such Applicable Premium Triggering Event at the applicable non-default rate (capitalizing outstanding interest therein on each Interest Payment Date for such Loans) if such principal amount had been outstanding from the date of such Applicable Premium Triggering Event to the first anniversary of the Effective Date plus (y) the prepayment price set forth in Section 3.03(c) applicable to the principal amount of such Loans subject to such Applicable Premium Triggering Event immediately following the first anniversary of the Effective Date, in each case, computed using a discount rate equal to the applicable Treasury Rate as of such Specified Date plus 0.50%, over (ii) the principal amount of such Loans subject to such Applicable Premium Triggering Event; provided that the Make-Whole Amount shall not be less than zero.
“Material Adverse Effect” means a material adverse effect on (a) the business, operations, Property or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower and its Subsidiaries, taken as a whole, to perform any of their material obligations under the Loan Documents, (c) the validity or enforceability of any material Loan Document or (d) the ability of Administrative Agent, any other Agent or any Lender to enforce its rights and remedies under any Loan Document.
“Material Debt” means Debt (other than the Secured Obligations and intercompany Debt) of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $12,500,000.
“Maturity Date” means August 3, 2027.
“Maximum Credit Amount” means, as to each Lender, its Effective Date Commitment, as set forth opposite its name on Annex I, as the same may be modified from time to time pursuant to any assignment permitted by Section 12.04(b).
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that is a nationally recognized rating agency.
“Mortgages” means all mortgages, deeds of trust and similar documents, instruments and agreements (and all amendments, modifications and supplements thereof) creating, evidencing, perfecting or otherwise establishing the Liens on Collateral to secure payment of the Secured Obligations. All Mortgages shall be in form and substance reasonably satisfactory to the Majority Lenders.
“Multiemployer Plan” means a Plan which is a multiemployer plan as defined in section 3(37) or 4001 (a)(3) of ERISA.
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“Net Cash Proceeds” means, as applicable, (a) with respect to any Asset Disposition or Insurance and Condemnation Event, the gross proceeds in cash received by, or on behalf of, any Credit Party or any of its Subsidiaries therefrom (including any cash, Cash Equivalents, deferred cash payment pursuant to, or by cash monetization of, a note receivable, cash payments received from time to time in respect of installment obligations, or otherwise, as and when received) less the sum of (in each case, excluding amounts paid or payable to Affiliates of the Borrower) (i) all income taxes, sales taxes, use taxes, transaction taxes and other taxes (including in respect of repatriation of funds) assessed by, or reasonably estimated to be payable to, a Governmental Authority as a result of such transaction (provided that if such estimated taxes exceed the amount of actual taxes required to be paid in cash in respect of such Asset Disposition or Insurance and Condemnation Event, the amount of such excess shall constitute Net Cash Proceeds), (ii) the direct costs, fees and expenses incurred in connection with such transaction or event, (iii) the principal amount of, premium, if any, and interest on any Debt that is incurred and outstanding pursuant to Section 9.02(e) that is secured by a Lien on the asset (or a portion thereof) that is the subject of such transaction or event, which Debt is required to be repaid in connection with such transaction or event, (iv) the amount of any reasonable reserve established in accordance with GAAP against any liability retained by the Borrower or any Subsidiary associated with the assets sold in connection with such Asset Disposition or subject to the Insurance and Condemnation Event (provided, that, to the extent and at the time any such amounts are released from such reserves, such amounts shall constitute Net Cash Proceeds), and (v) in the case of any Asset Disposition or Insurance and Condemnation Event by a non-Wholly Owned Subsidiary, the ratable portion of the Net Cash Proceeds thereof (calculated without regard to this clause (a)(iv)) attributable to non-controlling interests and not available for distribution to, or for the account of, the Borrower or a Wholly-Owned Subsidiary and (v) with respect to an Insurance and Condemnation Event, (x) all money actually applied or reasonably expected to be applied within the time periods permitted by Section 3.03(b)(ii) to repair or reconstruct the damaged Property or Properties and (y) proceeds required to restore any portion of a real property asset under the terms of a lease or otherwise required to be paid over to a landlord under a lease and (b) with respect to any incurrence of Debt, the gross cash proceeds received by any Credit Party or any of its Subsidiaries therefrom less (in each case, excluding amounts paid or payable to Affiliates of the Borrower) all taxes and customary fees, commissions, costs, underwriting discounts and other fees and expenses incurred in connection therewith (including, where the proceeds are realized by a Subsidiary of the Borrower, any incremental taxes imposed as a result of distributing (or a deemed distribution of) the relevant proceeds from any Subsidiary to the Borrower, as applicable).
“Notes” means the promissory notes of the Borrower described in Section 2.02(b) and being substantially in the form of Exhibit A, together with all amendments, restatements, amendments and restatements, modifications, supplements, replacements, extensions and rearrangements thereof.
“Notice of Prepayment Rejection” has the meaning set forth in Section 3.03(b)(iv) hereof.
“NYFRB” means the Federal Reserve Bank of New York.
“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“Other Connection Taxes” means, with respect to any Agent, any Lender or any other recipient, Taxes imposed as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” means any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes arising from any payment made hereunder or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement and any other Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 5.04(b)).
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“Participant” has the meaning set forth in Section 12.04(c).
“Participant Register” has the meaning set forth in Section 12.04(c).
“Patents” means all rights, title and interests in and to, pursuant to the laws of the United States or any other country all letters patent and all registrations, recordings and applications corresponding thereto, including all reissues, continuations, re-examinations, continuations-in-part or extensions thereof and all petty patents, divisionals, and patents of addition.
“Patriot Act” has the meaning set forth in Section 12.15.
“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.
“Perfection Certificate” means that certain Perfection Certificate, dated as of the Effective Date, delivered by Borrower to the Administrative Agent and the Lenders.
“Periodic Term SOFR Determination Day” has the meaning set forth in the definition of “Term SOFR”.
“Permitted Acquisition” means the acquisition of all or substantially all of the capital stock or property of another Person so long as (which in the case of an acquisition that is a Limited Condition Transaction shall be subject to Section 1.05): (i) the Credit Parties comply with Section 8.12 with respect to such Person and/or such property to the extent applicable; (ii) no Default or Event of Default has occurred and is continuing or would immediately exist after giving effect to such transaction; and (iii) to the extent that any such transaction involves a merger of any Credit Party, the Credit Party shall be the surviving entity following the closing of such transaction.
“Permitted Convertible Notes” means the 2024 Notes, any Exchanged Notes and any Future Convertible Notes.
“Permitted Convertible Note Hedging Arrangements” means (a) any agreements or arrangements pursuant to which the Borrower acquires a bond hedge, call option, capped call option or any similar derivative arrangement requiring the counterparty thereto to deliver to the Borrower common stock of the Borrower, the cash value of such common stock or cash representing the termination value of such option or combination thereof from time to time upon the settlement, exercise or early termination of such option and (b) an agreement or arrangement pursuant to which, among other things, the Borrower issues to the counterparty thereto warrants to acquire common stock of the Borrower, cash in lieu of delivering such common stock or cash representing the termination value of such option, or a combination thereof upon settlement, exercise or early termination thereof, in each case, under clauses (a) and (b), entered into by the Borrower in connection with any Permitted Convertible Notes (including, without limitation, in connection with the exercise of any over-allotment or initial purchaser’s (or initial purchasers’) or underwriter’s (or underwriters’) option).
“Permitted Liens” has the meaning assigned to such term in Section 9.03.
“Permitted Refinancing” means any Debt (the “Refinancing Debt”), the proceeds of which are used to refinance, modify, refund, renew, extend or replace outstanding Debt (such outstanding Debt, the “Refinanced Debt”); provided that (a) the principal amount (or accreted value, if applicable) of such Refinancing Debt (including any unused commitments thereunder) is not greater than the principal amount (or accreted value, if applicable) of the Refinanced Debt at the time of such refinancing, modification, refunding, renewal, extension or replacement, except by an amount equal to any original issue discount thereon and the amount of unpaid accrued interest and premium thereon plus other reasonable amounts paid, and fees and expenses reasonably incurred, in connection with such refinancing, refunding, renewal, extension or replacement, and by an amount equal to any existing commitments thereunder that have not been utilized at the time of such refinancing, modification, refunding, renewal, extension or replacement; (b) other than with respect to a Permitted Refinancing in respect of Debt
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permitted pursuant to Section 9.02(e) or in respect of Convertible Notes, the final stated maturity and Weighted Average Life to Maturity of such Refinancing Debt shall not be prior to or shorter than that applicable to the Refinanced Debt and such Refinancing Debt does not require any scheduled payment of principal, mandatory repayment, redemption or repurchase that is more favorable to the holders of the Refinancing Debt than the corresponding terms (if any) of the Refinanced Debt (including by virtue of such Refinancing Debt participating on a greater basis in any mandatory repayment, redemption or repurchase as compared to the Refinanced Debt, but excluding any scheduled payment of principal, mandatory repayment, redemption or repurchase occurring on or after the date that is 91 days after the Maturity Date in effect at the time of the issuance or incurrence of such Refinancing Date); (c) such Refinancing Debt shall not be secured by (i) Liens on assets other than assets securing the Refinanced Debt at the time of such refinancing, refunding, renewal, extension or replacement or (ii) Liens having a higher priority than the Liens, if any, securing the Refinanced Debt; (d) such Refinancing Debt shall not be guaranteed by or otherwise recourse to any Person other than the Person(s) to whom the Refinanced Debt is recourse or by whom it is guaranteed, in each case as of the time of such refinancing, refunding, renewal, extension or replacement; (e) to the extent such Refinanced Debt is subordinated in right of payment to the Secured Obligations (or the Liens securing such Debt were originally contractually subordinated to the Liens securing the Collateral pursuant to the Security Instruments), such refinancing, refunding, renewal, extension or replacement is subordinated in right of payment to the Secured Obligations (or the Liens securing such Debt shall be subordinated to the Liens securing the Collateral pursuant to the Security Instruments) on terms at least as favorable to the Lenders as those contained in the documentation governing such Refinanced Debt or otherwise reasonably acceptable to the Majority Lenders; (f) in the event that the Refinancing Debt is unsecured Debt such Refinancing Debt does not include cross-defaults (but may include cross-payment defaults and cross-defaults at the final stated maturity thereof and cross-acceleration); (g) the covenants and events of default applicable to such Permitted Refinancing shall not be more restrictive, taken as a whole, to the Borrower than the covenants and events of default contained in this Agreement (it being understood that, with respect to any Permitted Refinancing in respect of Convertible Notes, customary provisions with respect to a “fundamental change” or any other provision that is customary with respect to convertible notes shall not be considered, for the purposes of this clause (g), to be more restrictive to the Borrower than the covenants and events of default contained in this Agreement); (h) no Default shall have occurred and be continuing at the time of, or would immediately result from, such refinancing, modification, refunding, renewal, extension or replacement; (i) the Refinancing Debt shall have pricing (including interest rates, fees and premiums), optional prepayments and redemption terms as may be agreed to by the Borrower and the lenders or holders of such Refinancing Debt and (j) other than with respect to a Permitted Refinancing in respect of Convertible Notes, such Refinancing Debt is otherwise on terms not materially less favorable to the Credit Parties and their Subsidiaries, taken as a whole, than those of the Debt being refinanced or extended (except (i) to the extent such terms apply solely to any period after the Maturity Date in effect at the time such Refinancing Debt is incurred or are otherwise reasonably acceptable to the Majority Lenders and (ii) to the extent the Lenders also receive the benefit of such more favorable terms).
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any employee pension benefit plan subject to Title IV of ERISA, Section 412 of the Code or Section 302 of ERISA, (a) which is currently or hereafter sponsored, maintained or contributed to (or required to be contributed to) by the Borrower, any Subsidiary or any ERISA Affiliate, (b) which was at any time during the past six calendar years, sponsored, maintained or contributed to (or required to be contributed to) by the Borrower, any Subsidiary or any ERISA Affiliate or (c) under or with respect to which the Borrower or any Subsidiary had or has any liability (contingent or otherwise).
“Prime Rate” means the rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Any change in the Prime Rate shall
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take effect at the opening of business on the day such change is publicly announced or quoted as being effective.
“Pro Forma Balance Sheet” means the unaudited pro forma consolidated balance sheet of the Borrower as of June 30, 2022 after giving effect to the Transactions as if they had occurred on such date.
“Pro Forma Basis” means, as to any Person, for all Specified Transactions that occur subsequent to the commencement of an applicable Test Period, all calculations of the Secured Leverage Ratio and Adjusted Cash EBITDA will give pro forma effect to such Specified Transactions as if such Specified Transactions occurred on the first day of such Test Period. Interest on a Capital Lease obligation shall be deemed to accrue at an interest rate reasonably determined by a Responsible Officer of the Borrower to be the rate of interest implicit in such Capital Lease obligation in accordance with GAAP. Interest on Debt that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. Whenever any calculation is made on a Pro Forma Basis hereunder, such calculation shall be made reasonably and in good faith by a Responsible Officer.
“Projections” means the forecasts of financial performance of the Borrower and its Subsidiaries for the fiscal year ended March 31, 2023.
“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including cash, securities, accounts and contract rights.
“Register” has the meaning assigned such term in Section 12.04(b)(iv).
“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors (including attorneys, accountants and experts) of such Person and such Person’s Affiliates.
“Relevant Governmental Body” means the Board of Governors of the Federal Reserve System or the NYFRB, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the NYFRB, or any successor thereto.
“Remedial Work” has the meaning assigned such term in Section 8.10(a).
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer” means, as to any Person, the Chief Executive Officer, the President, the Chief Financial Officer, the Chief Business Officer, the Chief Operating Officer or any Vice President of such Person. Unless otherwise specified, all references to a Responsible Officer herein shall mean a Responsible Officer of the Borrower.
“Restricted Payment” means any dividend on, or the making of any payment or other distribution on account of, or the purchase, redemption, retirement or other acquisition (directly or indirectly) of, or the setting apart assets for a sinking or other analogous fund for the purchase, redemption, retirement or other acquisition of, any class of Equity Interests of any Credit Party or any Subsidiary thereof, or the making of any distribution of cash, property or assets to the holders of any Equity Interests of any Credit Party or any Subsidiary thereof on account of such Equity Interests. It is understood that the withholding of shares, and the payment of cash to the Internal Revenue Service in an amount not to exceed the value of the withheld shares, by the Borrower in connection with any of its stock incentive plans shall not constitute Restricted Payments.
“S&P” means S&P Global Ratings, and any successor thereto that is a nationally recognized rating agency.
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“Sale Leaseback Transaction” means any arrangement with any Person or Persons, whereby in contemporaneous or substantially contemporaneous transactions a Credit Party or any Subsidiary of a Credit Party sells substantially all of its right, title and interest in any property and, in connection therewith, acquires, leases or licenses back the right to use all or a material portion of such property.
“Sale Transaction” means a transaction in which (1) any Person or (2) Persons constituting a “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such Person and its subsidiaries) becomes the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under such Act), directly or indirectly, of Equity Interests representing one-hundred percent (100%) of the outstanding common stock of the Borrower.
“Sanctioned Country” means, at any time, a country or territory which is itself the subject or target of country-wide or territory-wide comprehensive Sanctions (as of the execution date of this Agreement, the so-called Donetsk People’s Republic, the so-called Luhansk people’s Republic, the Crimea region of Ukraine, Cuba, Iran, Syria and North Korea) or any country or territory whose government is the subject of Sanctions (as of the execution date of this Agreement, Venezuela) or that is otherwise the subject of broad Sanctions restrictions (as of the execution date of this Agreement, Afghanistan, Russia and Belarus).
“Sanctioned Person” means, at any time, (a) any Person who is the target of Sanctions, including any person listed in any Sanctions-related list maintained by OFAC, U.S. Department of State or the U.S. Department of Commerce, the United Nations Security Council, the European Union, or Her Majesty’s Treasury of the United Kingdom, (b) any Person operating, organized, located or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).
“Sanctions” means economic, financial or trade sanctions imposed, administered or enforced from time to time by (a) the U.S. government, including those through OFAC, the U.S. Department of State or the U.S. Department of Commerce, (b) the United Nations Security Council, (c) the European Union and each relevant Member State hereof, and (d) the United Kingdom, including those through Her Majesty’s Treasury.
“SEC” means the U.S. Securities and Exchange Commission or any successor Governmental Authority.
“Secured Leverage Ratio” means, with respect to any Test Period, the ratio of (a) the aggregate principal amount of Debt of the type described in clause (a) of the definition thereof of the Borrower and/or its Subsidiaries that is secured by a Lien on any asset of the Borrower or such Subsidiary and is outstanding on the last day of such Test Period to (b) Adjusted Cash EBITDA for such Test Period.
“Secured Obligations” means any and all amounts owing or to be owing by the Borrower or any Guarantor (whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising): (a) to any Agent or any Lender under any Loan Document, including the Applicable Premium (if any) and all interest on any of the Loans (including any interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of any Credit Party (or could accrue but for the operation of applicable bankruptcy or insolvency laws), whether or not such interest is allowed or allowable as a claim in any such case, proceeding or other action), fees, expenses, indemnification or otherwise; and (b) all renewals, extensions and/or rearrangements of any of the above whether or not such Person (or in the case of its Affiliate, the Person affiliated therewith) remains a Lender hereunder.
“Secured Parties” means, collectively, the Administrative Agent and the Lenders.
“Securities Account” shall have the meaning set forth in Article 8 of the UCC.
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“Security Agreement” means that certain Pledge and Security Agreement, dated as of the date hereof, made by the Credit Parties in favor of the Administrative Agent, for the benefit of the Secured Parties, as the same may be amended, restated, amended and restated, supplemented and/or modified from time to time.
“Security Instruments” means the Security Agreement, any Account Control Agreement, any Mortgage, any Intellectual Property Security Agreement and any and all other agreements, instruments or certificates now or hereafter executed and delivered by any Credit Party pledging or granting a lien on Collateral or guarantying the payment and performance of the Secured Obligations, in each case as such agreements may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Signature Laws” has the meaning assigned such term in Section 12.06(d).
“Specified Transaction” means (i) any Asset Disposition and any asset acquisition, Investment (or series of related Investments) (including any Permitted Acquisition), in each case, in excess of $1,000,000 (or any similar transaction or transactions), and (ii) any incurrence, repayment, repurchase or redemption of Debt.
“SOFR” means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator” means the NYFRB (or a successor administrator of the secured overnight financing rate).
“SOFR Loan” means any Loan which bears interest at a rate based on Adjusted Term SOFR, other than pursuant to clause (iii) of the definition of “Base Rate”.
“Subsidiary” means, for any Person, (a) any corporation, limited liability company, partnership or other entity of which at least a majority of the outstanding Equity Interests having by the terms thereof ordinary voting power to elect a majority of the board of directors, managers or other governing body of such Person (irrespective of whether or not at the time Equity Interests of any other class or classes of such Person shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more of the Subsidiaries of such Person and (b) any partnership of which such Person or any of the Subsidiaries of such Person is a general partner. Unless otherwise indicated herein, each reference to the term “Subsidiary” shall mean a Subsidiary of the Borrower.
“Swap Agreement” means any agreement with respect to any swap, hedge, forward, future or derivative transaction or option or similar agreement (including without limitation, any Interest Rate Agreement) involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower and its Subsidiaries shall be deemed to be a “Swap Agreement.” For the avoidance of doubt, the following shall not constitute a “Swap Agreement”: (i) any incentive stock, stock options, phantom stock or similar agreements entered into with current or former directors, officers, employees or consultants of the Borrower, (ii) any stock option or warrant agreement for the purchase of Equity Interests of the Borrower, (iii) any agreement for the purchase of Equity Interests or Debt (including convertible Debt) of the Borrower pursuant to delayed delivery contracts, accelerated stock repurchase contracts, forward contracts (including prepaid forward contracts) or other similar derivatives, contracts or agreements, (iv) any Permitted Convertible Note Hedging Arrangement, and (v) any of the foregoing to the extent it constitutes a derivative embedded in a convertible security issued by the Borrower.
“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings (including backup withholding), assessments, fees or other charges and all liabilities with
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respect thereto, imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term SOFR” means, the Term SOFR Reference Rate for a tenor of one month on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for a tenor of one month has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day.
“Term SOFR Adjustment” means a percentage per annum equal to 0.10%.
“Term SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion.
“Term SOFR Reference Rate” means the forward-looking term rate based on SOFR.
“Test Period” means, as of any date of determination, the most recently completed four consecutive fiscal quarters of the Borrower ending on or prior to such date for which financial statements have been or are required to be delivered pursuant to Section 8.01.
“Trademarks” means all rights, title and interests in and to, pursuant to the laws of the United States or any other country, all trademarks, tradenames, corporate names, business names, trade styles, service marks, logos, and other source or business identifiers, and all registrations and recordings thereof, and any applications in connection therewith, including all reissues, extensions or renewals thereof, and all rights in domain names.
“Trade Secrets” means all proprietary and confidential information that derives independent economic value from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, including know-how, trade secrets, database rights, processes, schematics, inventions (whether or not patentable), invention disclosures, discoveries, improvements, methods, tools, processes, techniques, formulas, drawings, prototypes, models, designs, customer lists, supplier lists, business and marketing plans, and pricing and cost information.
“Transactions” means, (a) with respect to the Borrower, the execution, delivery and performance by the Borrower of this Agreement, each other Loan Document to which it is a party, the borrowing of Loans, the use of the proceeds thereof, and the granting of Liens by the Borrower on the Collateral pursuant to the Security Instruments and (b) with respect to each Guarantor, the execution, delivery and performance by such Guarantor of each Loan Document to which it is a party, the guaranteeing of the Secured Obligations by such Guarantor and the granting of Liens by such Guarantor on the Collateral pursuant to the Security Instruments.
“Treasury Rate” means as of the date of determination, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year (as reasonably determined by the Majority Lenders pursuant to a publicly available source of such market data).
“UCC” means the Uniform Commercial Code in effect in the applicable jurisdiction.
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“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“Unrestricted” means when referring to cash and Cash Equivalents of the Borrower and its Subsidiaries, that such cash and Cash Equivalents do not appear or would not be required to appear as “restricted” on the financial statements of the Borrower or any such Subsidiary (unless related to the Loan Documents or the Liens created hereunder or thereunder).
“U.S. Government Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate” has the meaning set forth in Section 5.03(f).
“Warrant” shall have the meaning assigned to such term in the Warrant Agreement.
“Warrant Agreements” shall mean, collectively, each Warrant to Purchase Common Stock, effective as of the date hereof, by and between the Borrower and each of (i) FP Credit Partners II, L.P., (ii) FP Credit Partners Phoenix II, L.P., (iii) FP Credit Partners, L.P. and (iv) FP Credit Partners Phoenix, L.P., respectively.
“Warrant FMV” shall mean an amount (which shall not be less than zero) equal to the fair market value of the Warrant, as reasonably determined by the board of directors of the Borrower using a customary valuation methodology.
“Weighted Average Life to Maturity” means, when applied to any Debt at any date, the number of years obtained by dividing: (i) the sum of the products obtained by multiplying (a) the amount of each then remaining scheduled installment, sinking fund, serial maturity or other required scheduled payments of principal, including payment at final scheduled maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (ii) the then outstanding principal amount of such Debt; provided that the effects of any prepayments made on such Debt shall be disregarded in making such calculation.
“Wholly-Owned Subsidiary” means any Subsidiary of which all of the outstanding Equity Interests (other than any directors’ qualifying shares mandated by applicable law), on a fully-diluted basis, are owned by the Borrower or one or more of the Wholly-Owned Subsidiaries or by the Borrower and one or more of the Wholly-Owned Subsidiaries.
“Withholding Agent” means the Borrower, any Guarantor or the Administrative Agent.
“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the
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Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
Section 1.02Terms Generally; Rules of Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) except as otherwise provided herein, any reference herein to any law shall be construed as referring to such law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time, (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to the restrictions contained herein), (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) with respect to the determination of any time period, the word “from” means “from and including” and the word “to” means “to and including,” (f) the word “or” has the inclusive meaning represented by the phrase “and/or,” and (g) any reference herein to Articles, Sections, Annexes, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Annexes, Exhibits and Schedules to, this Agreement. No provision of this Agreement or any other Loan Document shall be interpreted or construed against any Person solely because such Person or its legal representative drafted such provision.
Section 1.03Accounting Terms and Determinations; GAAP. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be furnished to the Agents or the Lenders hereunder shall be prepared, in accordance with GAAP, applied on a consistent basis, except for changes in which Borrower’s independent certified public accountants concur and which are disclosed to the Administrative Agent on the next date on which financial statements are required to be delivered to the Lenders pursuant to Section 8.01(a); provided that, unless the Borrower and the Majority Lenders shall otherwise agree in writing, no such change shall modify or affect the manner in which compliance with the covenants contained herein is computed such that all such computations shall be conducted utilizing financial information presented consistently with prior periods. For the avoidance of doubt, if there occurs after the date hereof any change in GAAP that affects in any respect the calculation of any covenant contained in this Agreement or the definition of any term defined under GAAP used in such calculations and for delivery of financial statements and projections, the Majority Lenders and Borrower shall negotiate in good faith to amend the provisions of this Agreement that relate to the calculation of such covenants with the intent of having the respective positions of Lenders and Credit Parties on a consolidated basis after such change in GAAP conform as nearly as possible to their respective positions as of the date hereof; provided, that, until any such amendments have been agreed upon, the covenants in this Agreement shall be calculated as if no such change in GAAP had occurred. Notwithstanding the foregoing or anything to the contrary set forth in this Agreement, all obligations of any Person that are or would have been treated as operating leases for purposes of GAAP prior to the issuance by the Financial Accounting Standards Board on February 25, 2016 of an Accounting Standards Update (the “ASU”) shall continue to be accounted for as operating leases for purposes of all financial definitions, calculations and covenants for purpose of this Agreement (whether or not such operating lease obligations were in effect on such date) notwithstanding the fact that such obligations are required in accordance with the ASU (on a prospective or retroactive basis or otherwise) to be treated as capitalized lease obligations in accordance with GAAP.
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Section 1.04Divisions. For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event under a different jurisdiction’s laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized on the first date of its existence by the holders of its Equity Interests at such time.
Section 1.05Limited Condition Transactions. In the event that the Borrower notifies the Administrative Agent in writing that any proposed acquisition or Investment is a Limited Condition Transaction and that the Borrower wishes to test the conditions to such Limited Condition Transaction and any Debt being incurred substantially concurrently with such Limited Condition Transaction that is to be used to finance such Limited Condition Transaction and any related transaction costs and expenses incurred in connection with such Limited Condition Transaction in accordance with this Section 1.05 (such notification, a “LCT Election”), then, so long as agreed to by the lenders providing such Debt (if any), the following provisions shall apply for 180 days after the date of such notification:
(a)any condition to such Limited Condition Transaction or such Debt that requires that no Default or Event of Default shall have occurred and be continuing at the time of such Limited Condition Transaction or the incurrence of such Debt, shall be satisfied if (i) no Default or Event of Default shall have occurred and be continuing at the time of the execution of the definitive agreements governing such Limited Condition Transaction (such date, the “LCT Test Date”) and (ii) no Event of Default under Sections 10.01(a) or 10.01(e) shall have occurred and be continuing both immediately before and immediately after giving effect to such Limited Condition Transaction and any Debt incurred in connection therewith (including such additional Debt);
(b)any financial ratio test (including any such test calculated in determining amounts under baskets) or financial condition to such Limited Condition Transaction or such Debt shall be tested on the LCT Test Date;
(c)except as provided in the next sentence, if the Borrower has made an LCT Election, then in connection with any subsequent calculation of any ratio or basket on or following the relevant date of execution of the definitive agreement with respect to such Limited Condition Transaction and prior to the earlier of (i) the date on which such Limited Condition Transaction is consummated or (ii) the date that the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction, any such ratio or basket shall be required to be satisfied on a pro forma basis assuming such Limited Condition Transaction and other transactions in connection therewith (including the incurrence or assumption of Debt and the use of proceeds thereof) have been consummated; provided that, notwithstanding the foregoing, any calculation of a ratio in connection with determining whether or not the Borrower is in compliance with the financial covenants set forth in Section 9.20 or Section 9.21 shall, in each case be calculated assuming such Limited Condition Transaction and other transactions in connection therewith (including the incurrence or assumption of Debt) have not been consummated and (y) determining whether the Borrower or any Subsidiary thereof may make a Restricted Payment or a payment of Debt under Section 9.01 hereof shall be calculated both (1) on a pro forma basis assuming such Limited Condition Transaction and other transactions in connection therewith (including the incurrence or assumption of Debt and the use of proceeds thereof) have been consummated and (2) assuming such Limited Condition Transaction and other transactions in connection therewith (including the incurrence or assumption of Debt and the use of proceeds thereof) have not been consummated. For the avoidance of doubt, if the Borrower has made an LCT Election and any of the ratios or baskets for which compliance was determined or tested as of the LCT Test Date are exceeded as a result of fluctuations in any such ratio or basket (including due to fluctuations of the target of any Limited Condition Transaction) after the LCT Test Date, but at or prior to the consummation of the Limited Condition Transaction, such basket or ratio will not be deemed to have been exceeded as a result of such fluctuations; and
(d)with respect to any incurrence of Debt, the proceeds of which are being used to finance a substantially concurrent acquisition (and the related transaction costs) that is a Limited Condition Transaction subject to customary “funds certain provisions”, any requirement
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under this Agreement or any other Loan Document that the representations and warranties be true and correct as a condition precedent to such acquisition or the incurrence and the availability of such Debt may, if agreed to by the applicable lenders providing such Debt, be limited to those representations and warranties, the accuracy of which is customarily included as a condition precedent to the incurrence or availability of third party acquisition financings that are subject to customary “funds certain provisions” (including, without limitation, certain specified representations and warranties under this Agreement and the representations and warranties under the relevant agreement governing such acquisition that are material to the lenders providing such Debt to the extent that the Borrower or its applicable Subsidiary has the right to terminate its obligations under such agreement or otherwise decline to close such acquisition as a result of the failure of such representations and warranties to be true and correct), so long as all representations and warranties in this Agreement and the other Loan Documents are true and correct in all material respects at the time of execution of the relevant agreement governing such acquisition. For the avoidance of doubt, the Administrative Agent shall have no duty to calculate, or verify the calculation, of any ratio, basket, amount or test in connection with a Limited Condition Transaction.
The foregoing provisions shall apply with similar effect during the pendency of multiple Limited Condition Transactions such that each of the possible scenarios is separately tested.
Section 1.06Pro Forma Calculations. For purposes of any calculation of the Secured Leverage Ratio or Adjusted Cash EBITDA, in the event that any Specified Transaction has occurred during the Test Period for which the Secured Leverage Ratio or Adjusted Cash EBITDA is being calculated or following the end of such Test Period and on or prior to the date of determination, such calculation shall be made on a Pro Forma Basis; provided that notwithstanding anything to the contrary, when calculating the Secured Leverage Ratio for purposes of actual compliance (and not pro forma compliance) with Section 9.21, any Specified Transaction that occurred subsequent to the end of the applicable Test Period shall not be given such pro forma effect.
Section 1.07Determination of Compliance with Certain Covenants; Amounts. For purposes of determining compliance with any negative covenant set forth in Article IX, (a) in the event that any Debt, Lien, Restricted Payment, Debt prepayment or Investment meets the criteria of more than one of the categories of permitted Debt, Lien, Restricted Payment, Debt prepayments or Investment described in Section 9.02, Section 9.03, Section 9.04, Section 9.01 or Section 9.05, respectively, the Borrower, in its sole discretion, may classify or reclassify such Debt, Lien, Restricted Payment, Debt prepayment or Investment, as the case may be (or any portion thereof), and will only be required to include the amount and type of such Debt, Lien, Restricted Payment, Debt prepayment, or Investment, as the case may be, being so reclassified in the permitted category of Debt, Lien, Restricted Payment, Debt prepayment, or Investment, as the case may be, to which such Debt, Lien, Restricted Payment, Debt prepayment, or Investment is being reclassified; and (b) at the time of incurrence or permitted reclassification, the Borrower will be entitled to divide and classify Debt, Lien, Restricted Payment, Debt prepayment, or Investment, as the case may be, among the relevant categories of permitted Debt, Lien, Restricted Payment, Debt prepayment, or Investment, as the case may be. Notwithstanding anything to the contrary in this Section 1.07, no re-classification between covenants (i.e. Debt to Liens or Investments to Restricted Payments) shall be permitted.
Article II
THE CREDITS
THE CREDITS
Section 1.08Loans and Commitments. Subject to the terms and conditions set forth herein, each Lender having an Effective Date Commitment agrees to make Loans to the Borrower in a single draw of an aggregate principal amount of two hundred fifty million dollars ($250,000,000) for all such Lenders, net of original issue discount equal in the aggregate to seven million five hundred thousand dollars ($7,500,000), that will not result in (i) such Lender’s Loans exceeding such Lender’s Effective Date Commitment or (ii) the total Loans exceeding the total Effective Date Commitments. The Effective
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Date Commitments shall terminate in full upon the earlier of (a) August 15, 2022 and (b) the making of the Loans. Loans may be repaid or prepaid in accordance with the provisions hereof, but once repaid or prepaid, may not be reborrowed.
Section 1.09Borrowings.
(e)Borrowings; Several Obligations. Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.
(f)Notes. Any Lender may request that Loans made by it be evidenced by a single promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or its registered assigns) in substantially the form of Exhibit A, dated, in the case of (i) any Lender party hereto as of the date of this Agreement, as of the date of this Agreement, or (ii) any Lender that becomes a party hereto pursuant to an Assignment and Assumption, as of the effective date of the Assignment and Assumption, payable to such Lender (or its registered assigns) in a principal amount equal to its Loans as in effect on such date, and otherwise duly completed. If any Lender’s Loans increases for any reason (whether pursuant to Section 12.04(b) or otherwise), the Borrower shall deliver or cause to be delivered on the effective date of such increase, a new Note payable to any Lender who requested a Note hereunder (or its registered assigns) in a principal amount equal to its Loans after giving effect to such increase, and otherwise duly completed, and such Lender agrees to promptly thereafter return the previously issued Note held by such Lender marked canceled or otherwise similarly defaced. The date, amount, maturity and interest rate of each Loan made by each Lender that receives a Note, and all payments made on account of the principal thereof, shall be recorded by such Lender on its books for its Note, and, prior to any transfer, may be recorded by such Lender on a schedule attached to such Note or any continuation thereof or on any separate record maintained by such Lender. Failure to make any such notation or to attach a schedule shall not affect any Lender’s or the Borrower’s rights or obligations in respect of such Loans or affect the validity of such transfer by any Lender of its Note.
Section 1.010Requests for Borrowings. The Borrower shall notify the Administrative Agent of such request by a written Borrowing Request in substantially the form of Exhibit B and signed by the Borrower (a “written Borrowing Request”) not later than 2:00 p.m., New York time, one (1) Business Day before the date of the Effective Date. Such written Borrowing Request shall specify the following information in compliance with Section 2.02:
(i)the aggregate amount of the requested Borrowing;
(ii)the date of such Borrowing, which shall be the Effective Date; and
(iii)the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.04.
The Borrowing Request shall constitute a representation by the Borrower that the amount of the requested Borrowing shall not cause the total Loans to exceed the total Effective Date Commitments. Promptly following receipt of a Borrowing Request in accordance with this Section 2.03, the Administrative Agent shall advise each Lender of the details thereof (including by providing a copy of the Borrowing Request to the Lenders) and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.
Section 1.011Funding of Loans.
(g)Funding by Lenders. Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 1:00 p.m., New York time, to the account of the Administrative Agent designated by it for such purpose by notice to the Lenders or as separately agreed to by the Lenders and Borrower and set forth in a funds flow
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memorandum dated as of the Effective Date. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower designated by the Borrower in the applicable Borrowing Request.
(h)Presumption of Funding by the Lenders. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s Loan, the Administrative Agent may assume that such Lender has made such Loan available on such date in accordance with Section 2.04(a) and may (but without obligation), in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its Loan available to the Administrative Agent, then such Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to the Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan.
Article III
PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES
PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES
Section 1.012Repayment of Loans. The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of the Loans on the Maturity Date.
Section 1.013Interest.
(i)Non-Default Rate. Borrower promises to pay interest on the unpaid principal amount of each Loan for the period commencing on the date of such Loan until such Loan is paid in full at a rate per annum equal to the sum of the Applicable Rate for such Loan plus the Applicable Margin. The Loans comprising each Borrowing shall in no event to exceed the Highest Lawful Rate.
(j)Post-Default Rate. Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise (or if an Event of Default under clause (e) of Section 10.01 has occurred and is continuing), such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in Section 3.02(a) or (ii) in the case of any other amount, 2% plus the rate applicable to Loans that are Base Rate Loans; provided that in no event shall such aggregate rate exceed the Highest Lawful Rate. For the avoidance of doubt, the outstanding obligations under any Loan Document shall continue to accrue interest after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency or reorganization of any Credit Party, whether or not such interest is allowed or allowable as a claim in any such case, proceeding or other action.
(k)Interest Payment Dates. Accrued interest on each Loan shall be payable on each Interest Payment Date, upon a prepayment of such Loan in accordance with Section 3.03 and at maturity in cash; provided that (i) interest accrued pursuant to Section 3.02(b) shall be payable on demand, and (ii) in the event of any repayment or prepayment of any Loan, accrued but unpaid interest (for the avoidance of doubt, excluding any interest previously paid in kind and added to the principal amount hereunder pursuant to this Section 3.02(c)) on the principal amount repaid or prepaid shall be payable in cash on the date of such repayment or prepayment. With respect to interest accruing on or before the first anniversary of the Effective Date, the Borrower may, if (i) it provides the Administrative Agent written notice of an election to pay such interest in-kind at least five (5) Business Days prior to the applicable Interest Payment Date, and (ii) no Event of Default has occurred and continues immediately prior to such payment, elect to have such interest on the applicable Interest Payment Date automatically and through no further action of the Borrower, the Administrative Agent or the Lenders, paid in-kind by increasing the
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principal balance of the Loans by the amount of such interest; provided that, any portion of such interest may be paid in cash at the option of the Borrower.
(l)Setting and Notice of Adjusted Term SOFR. The applicable Adjusted Term SOFR for each Interest Period shall be determined by the Administrative Agent, and notice thereof shall be given by the Administrative Agent promptly to Borrower and each Lender. Each determination of the applicable Adjusted Term SOFR by the Administrative Agent shall be conclusive and binding upon the parties hereto, in the absence of demonstrable error. The Administrative Agent shall, upon written request of Borrower or any Lender, deliver to Borrower or such Lender a statement showing the computations used by the Administrative Agent in determining any applicable Adjusted Term SOFR hereunder. In connection with the use or administration of Adjusted Term SOFR, the Administrative Agent (with the consent of Borrower, not to be unreasonably withheld or delayed) will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document. The Administrative Agent will promptly notify Borrower and the Lenders of the effectiveness of any Conforming Changes in connection with the use or administration of Adjusted Term SOFR.
(m)Interest Rate Computations. Interest shall be computed for the actual number of days elapsed on the basis of a year of (a) 360 days for interest calculated at the Adjusted Term SOFR and (b) 365/366 days for interest calculated at the Base Rate. The applicable interest rate for each Base Rate Loan shall change simultaneously with each change in the Base Rate unless such computation would exceed the Highest Lawful Rate, in which case such interest rate shall be automatically reduced to the Highest Lawful Rate.
(n)Rates. The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to (a) the continuation of, administration of, submission of, calculation of or any other matter related to Base Rate, the Term SOFR Reference Rate, Adjusted Term SOFR or Term SOFR, or any component definition thereof or rates referred to in the definition thereof, or any alternative, successor or replacement rate thereto (including any Benchmark Replacement), including whether the composition or characteristics of any such alternative, successor or replacement rate (including any Benchmark Replacement) will be similar to, or produce the same value or economic equivalence of, or have the same volume or liquidity as, Base Rate, the Term SOFR Reference Rate, Adjusted Term SOFR, Term SOFR or any other Benchmark prior to its discontinuance or unavailability, or (b) the effect, implementation or composition of any Conforming Changes. The Administrative Agent and its affiliates or other related entities may engage in transactions that affect the calculation of Base Rate, the Term SOFR Reference Rate, Term SOFR, Adjusted Term SOFR, any alternative, successor or replacement rate (including any Benchmark Replacement) or any relevant adjustments thereto, in each case, in a manner adverse to Borrower. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain the Base Rate, the Term SOFR Reference Rate, Term SOFR, Adjusted Term SOFR or any other Benchmark, in each case pursuant to the terms of this Agreement, and shall have no liability to Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.
Section 1.014Prepayments.
(a)Optional Prepayments. The Borrower may prepay any Loan at its option, in whole at any time or in part from time to time, plus the Applicable Premium (if any) and all accrued and unpaid interest, if any, to, but excluding, the prepayment date. The Borrower shall notify the Administrative Agent in accordance with the notice provisions of Section 12.01 of any prepayment hereunder not later than 2:00 p.m., New York time, at least three (3) Business Days prior to the date of such prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that such notice may be conditioned upon the effectiveness of other transactions, in which case such notice may be revoked or delayed by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date)
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if such condition is not satisfied. Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof or provide a copy of such notice to the Lenders. Prepayments shall be accompanied by accrued interest to the extent required by Section 3.02. Any prepayment made pursuant to this Section 3.03 shall be applied pro rata to the outstanding Loans.
(b)Mandatory Prepayments.
(i)Debt Incurrence. The Borrower shall make mandatory principal prepayments of the Loans in the manner set forth in clause (iii) below in an amount equal to one hundred percent (100%) of the aggregate Net Cash Proceeds from any incurrence of Debt not otherwise permitted pursuant to Section 9.02. Such prepayment shall be made within one (1) Business Day after the date of receipt of the Net Cash Proceeds of any such incurrence of Debt.
(ii)Asset Dispositions and Insurance and Condemnation Events. The Borrower shall make mandatory principal prepayments of the Loans in the manner set forth in clause (iii) below in an amount equal to one hundred percent (100%) of the aggregate Net Cash Proceeds from (A) any Asset Disposition (other than any Asset Disposition consummated pursuant to Section 9.11(a), (b), (c), (d), (f), (i), (j), (k), (l), (n), (p) or (q)) or (B) any Insurance and Condemnation Event, to the extent that the aggregate amount of such Net Cash Proceeds, in the case of each of clauses (A) and (B), respectively, exceed $10.0 million in the aggregate during any fiscal year (and, in each case, only to the extent of such excess). Such prepayments shall be made within five (5) Business Days after the date of receipt of the Net Cash Proceeds. Notwithstanding the foregoing, and provided no Event of Default has occurred and is continuing, the Borrower shall be permitted to reinvest up to $20.0 million of additional Net Cash Proceeds of such Asset Disposition or Insurance and Condemnation Events in any fiscal year in productive assets of a kind then used or usable in the business of such Credit Party or such Subsidiary, within twelve (12) months after the date of such Asset Disposition or Insurance and Condemnation Event, or enters into a binding commitment therefor within said twelve (12) month period and subsequently makes such reinvestment within six (6) months after expiration of such twelve (12) month period; provided that the Borrower notifies the Administrative Agent of such Credit Party’s or such Subsidiary’s intent to reinvest and of the completion of such reinvestment at the time such proceeds are received and when such reinvestment occurs, respectively.
(iii)Manner of Payment. Subject to Section 3.03(b)(iv), each prepayment of the Loans under this Section 3.03(b) shall be applied to repay Loans on a pro rata basis.
(iv) Notice; Rejection Right. The Borrower shall notify the Administrative Agent in writing of any mandatory prepayment of the Term Loans required to be made pursuant to this Section 3.02(b) at least three (3) Business Days prior to the required date of such prepayment. Each such notice shall specify the date of such prepayment and provide a reasonably detailed calculation of the amount to be prepaid in connection with such prepayment, including any Applicable Premium. The Administrative Agent will promptly notify each Lender holding Loans entitled to such prepayment of the contents of such prepayment notice (or provide a copy thereof to each Lender) and of such Lender’s pro rata share of such prepayment. Each Lender may, by written notice (each a “Notice of Prepayment Rejection”) received by the Administrative Agent no later than 3:00 p.m. (Eastern) one (1) Business Day prior to the date of such prepayment, reject all or a portion, of its pro rata share of such prepayment (in which case the aggregate amount of the payment that would have been applied to prepay Loans but was so declined may be retained by the Borrower). If a Lender fails to deliver a Notice of Prepayment Rejection within the time frame specified above, any such failure will be deemed to be an acceptance of the total amount of such Lender’s pro rata share of such prepayment.
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(o)Applicable Premium. In the event of the occurrence of any Applicable Premium Triggering Event, the Borrower shall pay to the Administrative Agent, for the ratable account of each Lender, a premium equal to (i) if such Applicable Premium Triggering Event occurs prior to the date that is twelve (12) months after the Effective Date, the Make-Whole Amount with respect to the aggregate principal amount of Loans subject to such Applicable Premium Triggering Event (or, if such Applicable Premium Triggering Event occurs prior to the date that is twelve (12) months after the Effective Date and substantially concurrently with the consummation of a Sale Transaction, an amount equal to the positive difference between 5.00% of the aggregate principal amount of the Loans subject to such Applicable Premium Triggering Event and the Warrant FMV), (ii) if such Applicable Premium Triggering Event occurs on or after the date that is twelve (12) months after the Effective Date and prior to the date this is twenty-four (24) months after the Effective Date, 2.00% of the aggregate principal amount of the Loans subject to such Applicable Premium Triggering Event; provided that, in the case of this sub-clause (ii), at the Borrower’s option, the Borrower may voluntarily prepay, at any time during such period, not more than 10% of the aggregate principal amount of the Loans outstanding on the first day of such period without the payment of any premium thereon, and (iii) if such Applicable Premium Triggering Event occurs on or after the date that is twenty-four (24) months after the Effective Date, 0.00% of the aggregate principal amount of Loans subject to such Applicable Premium Triggering Event (such amounts referred to in this Section 3.03(c), the “Applicable Premium”).
The Applicable Premium shall be due and payable on the date of each such Applicable Premium Triggering Event. It is understood and agreed that if the Secured Obligations are accelerated (including pursuant to Article X as a result of any Event of Default, by operation of law or otherwise), the Applicable Premium shall also be due and payable on such date (to the extent applicable) and such Applicable Premium shall constitute part of the Secured Obligations. In view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of each Lender’s lost profits as a result thereof, the Applicable Premium payable above shall be presumed to be the liquidated damages sustained by each Lender as the result of the early termination of the Term Loan Facility hereunder and the Borrower agrees that it is reasonable under the circumstances currently existing. The Applicable Premium shall also be payable in the event the Secured Obligations (and/or this Agreement) are satisfied or released by foreclosure (whether by power of judicial proceeding, deed in lieu of foreclosure or by any other means). THE BORROWER HEREBY EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE APPLICABLE PREMIUM IN CONNECTION WITH ANY SUCH ACCELERATION OR OTHERWISE. The Borrower expressly agrees (to the fullest extent that it may lawfully do so) that: (A) the Applicable Premium is reasonable and is the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (B) the Applicable Premium shall be payable notwithstanding the then-prevailing market rates at the time payment is made; (C) there has been a course of conduct between the Lenders and the Borrower giving specific consideration in this transaction for such agreement to pay the Applicable Premium; and (D) the Borrower shall be estopped hereafter from claiming differently than as agreed to in this Section 3.03(c). The Borrower expressly acknowledges that its agreement to pay the Applicable Premium to the Lenders as herein described is a material inducement to the Lenders to provide the Term Loans.
Any provision of this Section 3.03(c) that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Section 3.03(c), and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 1.015Fees. The Borrower agrees to pay to the Administrative Agent, for its own account, the fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent in the Fee Letter.
Section 1.016Benchmark Replacement Setting.
(a)Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Loan Document, upon the occurrence of a Benchmark Transition Event, the Administrative
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Agent and Borrower may amend this Agreement to replace the then-current Benchmark with a Benchmark Replacement. Any such amendment with respect to a Benchmark Transition Event will become effective at 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the Administrative Agent has posted such proposed amendment to all affected Lenders and Borrower so long as the Administrative Agent has not received, by such time, written notice of objection to such amendment from Lenders comprising the Majority Lenders. No replacement of a Benchmark with a Benchmark Replacement pursuant to this Section 3.05(a) will occur prior to the applicable Benchmark Transition Start Date.
(b)Benchmark Replacement Conforming Changes. In connection with the use, administration, adoption or implementation of a Benchmark Replacement, the Administrative Agent (with the consent of Borrower, not to be unreasonably withheld or delayed) will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.
(c) Notices; Standards for Decisions and Determinations. The Administrative Agent will promptly notify Borrower and the Lenders of (i) the implementation of any Benchmark Replacement and (ii) the effectiveness of any Conforming Changes in connection with the use, administration, adoption or implementation of a Benchmark Replacement. The Administrative Agent will promptly notify Borrower of the removal or reinstatement of any tenor of a Benchmark pursuant to Section 3.05(d) or the commencement of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 3.05, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 3.05.
(d)Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR Reference Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the administrator of such Benchmark or the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is not or will not be representative or in compliance with or aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks, then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for any Benchmark settings at or after such time to remove such unavailable, non-representative, non-compliant or non-aligned tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is not or will not be representative or in compliance with or aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” (or any similar or analogous definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor.
(e)Benchmark Unavailability Period. During a Benchmark Unavailability Period, the Loans will incur interest at the Base Rate. During a Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Base Rate.
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Article IV
PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS
PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS
Section 1.017Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a)Payments by the Borrower. The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees, or of amounts payable under Section 5.01, Section 5.03 or otherwise) prior to 2:00 p.m., New York time, on the date when due, in dollars that constitute immediately available funds, without defense, deduction, recoupment, set-off or counterclaim. Fees, once paid, shall not be refundable under any circumstances absent manifest error (e.g., as a result of a clerical mistake). Any amounts received after such time on any date may, in the discretion of the Administrative Agent (acting at the direction of the Majority Lenders), be deemed to have been received on such date or the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices specified in Section 12.01, except that payments pursuant to Section 5.01, Section 5.03 and Section 12.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars.
(b)Application of Insufficient Payments. If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest, premiums and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest, premiums and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest, premiums and fees then due to such parties, and (ii) second, towards payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.
(c)Sharing of Payments by Lenders. If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this Section 4.01(c) shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any other Credit Party or Affiliate thereof (as to which the provisions of this Section 4.01(c) shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
Section 1.018Presumption of Payment by the Borrower. Unless the Administrative Agent shall have received written notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may (but without obligation), in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so
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distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, the Federal Funds Rate.
Section 1.019Certain Deductions by the Administrative Agent. If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(b), or Section 4.02 then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid. After acceleration or maturity of the Loans, all principal will be paid ratably as provided in Section 10.02(c).
Section 1.020Disposition of Proceeds. The Security Instruments contain an assignment by the Borrower and/or the Guarantors unto and in favor of the Administrative Agent for the benefit of the Secured Parties of all of the Borrower’s or each Guarantor’s interest in and to the Collateral and all proceeds attributable thereto that may be produced from or allocated to the Collateral. The Security Instruments further provide in general for the application of such proceeds to the satisfaction of the Secured Obligations and other obligations described therein and secured thereby. Notwithstanding the assignment contained in such Security Instruments, (a) the Administrative Agent and the other Secured Parties agree that unless an Event of Default has occurred and is continuing they will neither notify the purchaser or purchasers of such Collateral nor take any other action to cause such proceeds to be remitted to the Administrative Agent or the other Secured Parties, but the Secured Parties will instead permit such proceeds to be paid to the Borrower and its Subsidiaries and (b) the Lenders hereby authorize the Administrative Agent to take such actions as may be necessary to cause such proceeds to be paid to the Borrower and/or such Subsidiaries.
Article V
INCREASED COSTS; CHANGES IN LAW; TAXES
INCREASED COSTS; CHANGES IN LAW; TAXES
Section 1.021Increased Costs; Changes in Law.
(f)If any Change in Law shall subject any Agent or Lender to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto and the result of any of the foregoing shall be to increase the cost to such Agent or Lender of making or maintaining any Loans (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Agent or Lender (whether of principal, interest or otherwise), then the Borrower will pay to such Agent or Lender such additional amount or amounts as will compensate such Agent or Lender for such additional costs incurred or reduction suffered (in each case to the extent such compensation is sought by such Agent or Lender from similarly situated borrowers).
(g) Capital Requirements. If any Lender determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such Lender, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender, such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered (in each case to the extent such compensation is sought by such Agent or Lender from similarly situated borrowers).
(h)Certificates. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in Section 5.01(a) and reasonably detailed calculations therefor shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.
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(i)Effect of Failure or Delay in Requesting Compensation. Failure or delay on the part of any Lender to demand compensation pursuant to this Section 5.01 shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section 5.01 for any increased costs or reductions incurred more than three hundred sixty five (365) days prior to the date that such Lender, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 365-day period referred to above shall be extended to include the period of retroactive effect thereof.
Section 1.022Compensation for Losses. In the event of (a) the payment of any principal of any SOFR Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any SOFR Loan other than on the last day of the Interest Period applicable thereto (including as a result of an Event of Default), (c) the failure to borrow, convert, continue or prepay any SOFR Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any SOFR Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 5.04(b), then, in any such event, the Borrower shall compensate each Lender for any loss, cost and expense attributable to such event, including any loss, cost or expense arising from the liquidation or redeployment of funds or from any fees payable. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.
Section 1.023Taxes.
(a)Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower or any Guarantor under any Loan Document shall be made free and clear of and without deduction or withholding for any Taxes, except as required by applicable law; provided that if the applicable Withholding Agent shall be required by applicable law to deduct Taxes from or in respect of any payments by such Withholding Agent (determined in its good faith discretion), then (i) in the case of Indemnified Taxes and Other Taxes (without duplication), the sum payable by the Borrower or any Guarantor shall be increased as necessary so that after making all required deductions and withholdings (including deductions and withholdings of Indemnified Taxes and Other Taxes (without duplication) applicable to additional sums payable under this Section 5.03(a)), the Administrative Agent or Lender and their Related Parties (as the case may be) receives an amount equal to the sum it would have received had no such deductions or withholdings been made, (ii) the applicable Withholding Agent shall make such deductions or withholdings and (iii) the applicable Withholding Agent shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law.
(b)Payment of Other Taxes by the Borrower. The Borrower and any Guarantor shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent (as directed by the Majority Lenders) timely reimburse it for the payment of, any Other Taxes.
(c)Indemnification by the Borrower. The Borrower and any Guarantor shall jointly and severally indemnify each Agent and each Lender and their Related Parties, within 10 days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes, without duplication (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 5.03) paid or payable by, or required to be withheld or deducted from a payment to, such Agent or such Lender and their Related Parties, as the case may be, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate of such Agent (on its own behalf or on behalf of a Lender or its Related Party) or a Lender or their Related Parties (with a copy to the Administrative Agent) as to the amount of such payment or liability under this Section 5.03 shall be delivered to the Borrower and shall be conclusive absent manifest error.
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(d)Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes or Other Taxes attributable to such Lender (but only to the extent that the Borrower or a Guarantor has not already indemnified the Administrative Agent for such Indemnified Taxes or Other Taxes and without limiting the obligation of the Borrower and any Guarantor to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 12.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this paragraph (d).
(e)Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower or a Guarantor to a Governmental Authority, the Borrower or such Guarantor shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(f)Status of Lenders. (i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 5.03(f)(i)(A), (i)(B) and Section 5.03(g) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
Without limiting the generality of the foregoing,
(A)any Lender that is a “U.S. Person” shall deliver to the Borrower and the Administrative Agent on or about the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;
(B)any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or about the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(1)in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to
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the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E establishing an exemption from, or reduction of, U.S. federal withholding tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2)executed copies of IRS Form W-8ECI;
(3)in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit E-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E; or
(4)to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate substantially in the form of Exhibit E-2 or Exhibit E-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit E-4 on behalf of each such direct and indirect partner; and
(C)any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made.
(D)Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall, upon request, update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
(g)FATCA. If a payment made to a Lender under this Agreement would be subject to United States federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA, and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount, if any, to deduct and withhold from such payment. Solely for purposes of this Section 5.03(g), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(h)Tax Refunds. If an Agent, Lender, or any of their Related Parties determines, in its reasonable discretion, that it has received a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by the Borrower or any Guarantor or with respect to which the Borrower or
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any Guarantor has paid additional amounts in each case pursuant to this Section 5.03, it shall pay over the amount of such refund to the Borrower or any Guarantor, as applicable (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower or Guarantor under this Section 5.03 with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such Agent, Lender or Related Party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower or Guarantor, upon the request of such Agent, Lender or Related Party, agrees to repay the amount paid over to the Borrower or Guarantor pursuant to this Section 5.03(h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Agent, Lender or Related Party in the event such Agent, Lender or Related Party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 5.03(h), in no event will the applicable Agent, Lender or Related Party be required to pay any amount to the Borrower or any Guarantor pursuant to this Section 5.03(h) the payment of which would place the applicable Agent, Lender or Related Party in a less favorable net after-Tax position than such Agent, Lender or Related Party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This Section 5.03 shall not be construed to require any Agent, Lender or Related Party to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the Borrower, any Guarantor or any other Person.
(i)Survival. Each party’s obligations under this Section 5.03 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the terminations of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.
(j)Defined Terms. For purposes of this Section 5.03, “applicable law” includes FATCA.
Section 1.024Mitigation Obligations; Replacement of Lenders.
(j)Designation of Different Lending Office. If any Lender requests compensation under Section 5.01, or if any Lender has Affected Loans under Section 5.05, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 5.03, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 5.01 or Section 5.03, or Affected Loans under Section 5.05, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(k)Replacement of Lenders. If (i) any Lender requests compensation under Section 5.01, (ii) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 5.03, (iii) any Lender has Affected Loans under Section 5.05, or (iv) any Lender has become a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, (A) require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 12.04(b)), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if such Lender accepts such assignment); provided that (1) if a Lender is removed as a Lender hereunder, the Borrower has paid such Lender all amounts due and owing under this Agreement and the other Loan Documents, including all principal, accrued interest, and fees (including, without limitation, any Applicable Premium that would have been due if such Lender’s Loans had been prepaid pursuant to Sections 3.03(a) on such date without the occurrence of a Sale Transaction and without giving effect to any other exceptions set forth in Section 3.03(c)), (2) in the case of a required assignment of interest, the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be
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conditioned, delayed or withheld, (3) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (4) in the case of any such assignment resulting from a claim for compensation under Section 5.01 or payments required to be made pursuant to Section 5.03, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.
Section 1.025Illegality. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Lender or its applicable lending office to honor its obligation to make or maintain Loans either generally or having a particular Interest Period hereunder, then such Lender shall promptly notify the Borrower and the Administrative Agent thereof and such Lender’s obligation to make such Loans shall be suspended (the “Affected Loans”) until such time as such Lender may again make and maintain such Loans.
Section 1.026Defaulting Lenders. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(a) the Loans of such Defaulting Lender shall not be included in determining whether the Majority Lenders or any other requisite Lenders have taken or may take any action hereunder or under any other Loan Document (including any consent to any amendment, waiver or other modification pursuant to Section 12.02); provided that any amendment, waiver or other modification requiring the consent of all Lenders or all Lenders affected thereby shall, except as otherwise provided in Section 12.02, require the consent of such Defaulting Lender in accordance with the terms hereof; and
(b) any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article X or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 4.01(c) shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, as the Borrower may request (so long as no Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fourth, so long as no Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and fifth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share and (y) such Loans were made at a time when the conditions set forth in Article VI were satisfied or waived, such payment shall be applied solely to pay the Loans of all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all Loans are held by the Lenders pro rata in accordance with their respective Commitments. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this Section shall be deemed paid to and redirected by such Defaulting Lender, and such Defaulting Lender irrevocably consents hereto.
(c) In the event that the Administrative Agent and the Borrower each agree that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then on such date such Lender shall take such actions as the Administrative Agent may determine to be appropriate in connection with such Lender ceasing to be a Defaulting Lender, and such Lender shall thereupon cease to be a Defaulting Lender (but all amendments, waivers or modifications effected
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without its consent in accordance with the provisions of Section 12.02 and this Section during such period shall be binding on it).
(d) The rights and remedies against, and with respect to, a Defaulting Lender under this Section are in addition to, and cumulative and not in limitation of, all other rights and remedies that the Administrative Agent, any Lender or the Borrower may at any time have against, or with respect to, such Defaulting Lender.
Article VI
CONDITIONS PRECEDENT
CONDITIONS PRECEDENT
Section 1.027Effective Date. The effectiveness of this Agreement and the obligations of the Lenders to make the Loans hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 12.02), in each case to the reasonable satisfaction of the Lenders:
(l)The Administrative Agent and the Lenders shall have received from the Borrower (i) subject to Section 12.03(a), all reasonable and documented out-of-pocket fees and expenses incurred by the Lenders and the Administrative Agent in connection with the preparation of the Loan Documents and the Transactions contemplated hereby for which Borrower has been invoiced at least one (1) Business Day prior to the Effective Date.
(m)The Administrative Agent and the Lenders shall have received a certificate of a Responsible Officer of each Credit Party (or the general partner or sole member of each Credit Party, as applicable), dated as of the Effective Date, setting forth (i) resolutions of the members, board of managers or directors or other appropriate governing body with respect to the authorization of each such Person to execute and deliver the Loan Documents to which it is a party and to enter into the Transactions contemplated in those documents, (ii) the officers of each such Person (y) who are authorized to sign the Loan Documents to which each such Person is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the articles or certificate of incorporation or formation, bylaws, certificate of limited partnership, partnership agreement, articles of organization, regulations, operating agreement or comparable organizational documents of each such Person, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificates until the Administrative Agent receives notice in writing from the Borrower to the contrary.
(n)The Administrative Agent and the Lenders shall have received certificates of the appropriate State agencies with respect to the existence, qualification and good standing of the Borrower and each Guarantor from its respective state of organization, each dated no earlier than thirty (30) days prior to the Effective Date.
(o)The Administrative Agent and the Lenders shall have received a closing certificate of a Responsible Officer of the Borrower, dated as of the Effective Date, certifying that (i) the representations and warranties of the Credit Parties set forth in this Agreement and the other Loan Documents, including without limitation those with respect to Intellectual Property and solvency, are true and correct in all material respects on and as of the Effective Date except to the extent such representations and warranties (i) are expressly limited to an earlier date, in which case, on and as of the Effective Date such representations and warranties shall continue to be true and correct in all material respects as of the such specified earlier date or (ii) are already qualified by materiality, Material Adverse Effect or a similar qualification, in which case, such representations and warranties shall be true and correct in all respects, (ii) no Default or Event of Default then exists and (iii) the Borrower has received all consents and approvals required by Section 7.02.
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(p)The Administrative Agent and the Lenders shall have received from each party hereto counterparts of this Agreement signed on behalf of such party.
(q)The Administrative Agent and the Lenders shall have received an opinion of counsel to the Credit Parties, dated as of the Effective Date and in form and substance reasonably acceptable to the Lenders.
(r)[Reserved].
(s)The Administrative Agent and the Lenders shall have received appropriate UCC search results reflecting no prior Liens encumbering the Properties of the Borrower and its Subsidiaries for each jurisdiction requested by the Lenders (other than those being assigned or released on or prior to the Effective Date or Permitted Liens).
(a)Concurrently with the execution of this Agreement, the Administrative Agent and the Lenders shall have received an executed copies of the Warrant Agreements and the Warrants shall have been issued to each of FP Credit Partners II, L.P., FP Credit Partners Phoenix II, L.P., FP Credit Partners, L.P. and FP Credit Partners Phoenix, L.P., respectively.
(a)The Administrative Agent and the Lenders shall have received duly executed counterparts of the Security Agreement, the Intellectual Property Security Agreement and each other Loan Document to be executed and delivered on the Effective Date, including but not limited to the Fee Letter and the Warrant Agreement, each dated as of the Effective Date and executed by each Credit Party party thereto. Except to the extent provided for in Section 8.12 or Section 8.16, each document (including any UCC financing statement) required by the Security Instruments and necessary to establish that the Administrative Agent will have perfected security interests (subject only to Permitted Liens) in the Collateral shall have been executed by the applicable Credit Party (to the extent applicable) and delivered to the Administrative Agent and, if applicable, be in proper form for filing; provided, that no Credit Party nor any Subsidiary shall be required to take any action to perfect any security interest in any part of the Collateral under the laws of any jurisdiction outside of the U.S.
(b)The Administrative Agent and the Lenders shall have received the Pro Forma Balance Sheet and the Projections.
(c)The Administrative Agent and the Lenders shall have received from the Borrower at least five (5) days prior to the Effective Date, provided that such information was requested by the Administrative Agent or the Lenders at least ten (10) days prior to the Effective Date, all documentation and other information required to support compliance under Sanctions and Anti-Terrorism Laws, including that required by bank regulatory authorities under applicable “know your customer” rules and regulations, including the USA PATRIOT Act, requested by the Administrative Agents and the Lenders.
(d)The Administrative Agent and the Lenders shall have received from the Borrower a completed and executed Perfection Certificate in form and substance reasonably satisfactory to the Lenders.
All documents executed or submitted pursuant to this Section 6.01 by and on behalf of the Borrower or any of its Subsidiaries shall be in form and substance reasonably satisfactory to the Lenders and their counsel. Counsel to the Lenders shall notify the Borrower, the Lenders and the Administrative Agent of the Effective Date, and such notice shall be conclusive and binding.
Section 1.028Each Credit Event. The obligation of each Lender to make a Loan on or after the Effective Date, is subject to the satisfaction of the following conditions:
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(c)At the time of and immediately after giving effect to such Borrowing, no Default or Event of Default shall have occurred and be continuing and the total Loans do not exceed the total Effective Date Commitments.
(d)The representations and warranties of the Credit Parties set forth in this Agreement and in the other Loan Documents shall be true and correct in all material respects on and as of the date of such Borrowing except to the extent any such representations and warranties (i) are expressly limited to an earlier date, in which case, on and as of the date of such Borrowing such representations and warranties shall continue to be true and correct in all material respects as of such specified earlier date or (ii) are already qualified by materiality, Material Adverse Effect or a similar qualification, in which case, such representations and warranties shall be true and correct in all respects.
(e)The receipt by the Administrative Agent of a Borrowing Request in accordance with Section 2.03.
Each request for a Borrowing shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in Section 6.02(a) through (c).
Article VII
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
Each Credit Party represents and warrants to the Administrative Agent and the Lenders, on behalf of itself and each of its Subsidiaries, that:
Section 1.029Organization; Powers. Borrower and each of its Subsidiaries (i) is duly organized, validly existing and in good standing (to the extent such concept exists in the relevant jurisdiction) under the laws of the jurisdiction of its organization, (ii) has all requisite power and authority to own its Property and to carry on its business as now conducted and (iii) is qualified or licensed to do business in all other states in which the laws require Borrower or such Subsidiary to be so qualified and/or licensed, except in each case (other than as to the Borrower, clause (i)) where the failure to do so would not reasonably be expected to have a Material Adverse Effect.
Section 1.030Authority. The execution, delivery and performance by each Credit Party of each of the Loan Documents to which such Credit Party is a party are within such Credit Party’s corporate or other organizational powers and have been duly authorized by all necessary corporate or other organizational action of such Credit Party.
Section 1.031Enforceability. Each Loan Document to which each Credit Party is a party has been duly executed and delivered by such Credit Party and is a legal, valid and binding obligation of such Credit Party, enforceable against such Credit Party in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles (whether enforcement is sought in equity or at law).
Section 1.032Litigation. Except as disclosed to Administrative Agent and the Lenders in writing prior to the Effective Date, there are no actions or proceedings which are pending, or to its knowledge threatened in writing, against Borrower or its Subsidiaries which could reasonably be expected to have a Material Adverse Effect. Neither Borrower nor any of its Subsidiaries is in breach of or a party to any contract or agreement or subject to any charge, restriction, judgment, decree or order which has or could reasonably be expected to have a Material Adverse Effect, nor is Borrower or any of its Subsidiaries in default with respect to any indenture, security agreement, mortgage, deed or other similar agreement relating to the borrowing of monies to which it is a party or by which it is bound which has had or could reasonably be expected to have a Material Adverse Effect.
Section 1.033Licenses, Etc. Borrower and each of its Subsidiaries has and is in good standing with and is not in breach with respect to all licenses (including all licenses relating to Intellectual Property), governmental permits, certificates, consents and franchises necessary to continue to conduct its
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business as previously conducted by it and to own or lease and operate its properties as now owned or leased by it except, in each case, where any breach of or failure to be in good standing or to obtain such licenses, permits, certificates, consents or franchises could not reasonably be expected to have a Material Adverse Effect.
Section 1.034Intellectual Property. The Perfection Certificate sets forth a true, correct and complete list of, as of the Effective Date, all registered and applied-for Patents, Trademarks (other than domain names) and registered Copyrights that are owned by Borrower or any Subsidiary, together with the applicable application or registration numbers, in each case, as reasonably necessary for the operation of the businesses of the Borrower and Subsidiary as conducted and except as would not reasonably be expected to have a Material Adverse Effect. Borrower and each of its Subsidiaries owns or has rights to use all Intellectual Property necessary to continue to conduct its business as conducted, except as would not reasonably be expected to have a Material Adverse Effect. To the Borrower’s knowledge, the operation of the business of Borrower and each of its Subsidiaries does not infringe any Intellectual Property owned by any other Person, except, in each case, as would not reasonably be expected to have a Material Adverse Effect. Except as disclosed in writing to Administrative Agent and the Lenders, to Borrower’s knowledge, no Person is infringing any Intellectual Property owned by Borrower or any of its Subsidiaries, except as would not reasonably be expected to have a Material Adverse Effect. Except as would not reasonably be expected to have a Material Adverse Effect, Borrower is not a party to, nor is bound by, any agreement that restricts Borrower from granting a security interest in the Intellectual Property contemplated to be granted under this Agreement in favor of Administrative Agent or the Lenders. To the knowledge of Borrower, Borrower has not received any oral or written notice or claim alleging Borrower’s ownership of, or valid license to use, any Intellectual Property infringes or otherwise violates the Intellectual Property rights of another Person nor, to Borrower’s knowledge, is there a reasonable basis for any such notice or claim, except, in each case, as would not reasonably be expected to have a Material Adverse Effect.
Section 1.035Financial Statements. The financial statements delivered by Borrower to the Administrative Agent and the Lenders prior to the Effective Date and the financial statements delivered by Borrower to Administrative Agent pursuant to Section 8.01(a) and Section 8.01(b), as applicable, fairly and accurately present the assets, liabilities and financial conditions and results of operations of Borrower and its Subsidiaries as of the dates and for the periods stated therein and have been prepared in accordance with GAAP (subject to, in the case of interim financial statements, the absence of footnotes and normal year-end adjustments in connection with the audited financial statements for the periods covered by such interim financial statements). No event, condition or change that has had, or could reasonably be expected to have, a Material Adverse Effect has occurred since March 31, 2022.
Section 1.036Title; Maintenance of Properties. Each Credit Party and each of its Subsidiaries has good record title to, or valid leasehold interests in, all of its Property material to its business (except for Intellectual Property, which is considered in Section 7.06 hereof), except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such Property for their intended purpose and except where the failure to do so could not reasonably be expected to have a Material Adverse Effect. None of the Property of any Credit Party or any Subsidiary of any Credit Party is subject to any Liens other Liens of the Administrative Agent and Permitted Liens. Except for such acts or failures to act as would not be reasonably expected to have a Material Adverse Effect, the Properties have been maintained, operated and developed in a good and workmanlike manner and in conformity with all Governmental Requirements and in conformity with the provisions of all leases, subleases or other contracts. To the knowledge of the Borrower, all material improvements, fixtures and equipment owned in whole or in part by the Borrower or any of its Subsidiaries that are necessary to conduct normal operations are being maintained in a state adequate to conduct normal operations, and with respect to such of the foregoing that are operated by the Borrower or any of its Subsidiaries, are being maintained in a good and workmanlike manner consistent with the practices of a normal prudent company engaged in the same or similar business (other than those the failure of which to maintain in accordance with this Section 7.08 would not reasonably be expected to have a Material Adverse Effect).
Section 1.037Security. The provisions of this Agreement and the other Loan Documents create, or upon execution will create, legal and valid Liens on all the Collateral of the type in which a security
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interest can be created under Article 9 of the UCC or other applicable law in favor of the Administrative Agent, for the benefit of the Secured Parties, and upon the proper filing of UCC financing statements, the filing of appropriate assignments or notices with the U.S. Patent and Trademark Office and the U.S. Copyright Office, and the other registrations and recordations required pursuant to Section 6.01(j), Section 8.12 and Section 8.16 and any Mortgages with respect to any Collateral, such Liens constitute perfected Liens on the Collateral (with respect to personal property (including, without limitation, Intellectual Property), to the extent a security interest in such Collateral and any proceeds of any item of Collateral can be perfected through the filing of UCC financing statements or such registrations and recordation), securing the Secured Obligations, enforceable against the applicable Credit Party and all third parties, and having priority over all other Liens on the Collateral except Permitted Liens.
Section 1.10Compliance With Laws, Etc.
(a)Neither the Borrower nor any of its Subsidiaries is in violation of any law, rule or regulation, or in default with respect to any judgment, writ, injunction or decree of any Governmental Authority, where such violation or default is reasonably expected to result in a Material Adverse Effect. Borrower is not in default in any manner under any provision of any agreement or instrument evidencing Material Debt, or any other material agreement to which it is a party or by which it is bound, in any material respect. No Credit Party is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended. Neither Borrower nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying margin stock (within the meaning of Regulations X, T and U of the Federal Reserve Board of Governors). Except as would not reasonably be expected to have a Material Adverse Effect, Borrower and each of its Subsidiaries has complied with the Federal Fair Labor Standards Act. Except as would not reasonably be expected to have a Material Adverse Effect, neither Borrower nor any of its Subsidiaries’ properties or assets has been used by Borrower or such Subsidiary in disposing, producing, storing, treating, or transporting any hazardous substance other than in compliance with applicable laws. Except as would not reasonably be expected to have a Material Adverse Effect, Borrower and each of its Subsidiaries has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted.
(b)Borrower and each of its Subsidiaries has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted under Export-Import Control Laws.
(c)Neither Borrower, nor any of its Subsidiaries, nor any of their respective officers, directors, employees, nor, to Borrower’s knowledge, any Affiliate of Borrower or its or any of its Subsidiaries or any agent of Borrower or any of its Subsidiaries in their capacity as such, has been during the past five years or is a Sanctioned Person.
(d)In the last five years, neither Borrower, nor any of its Subsidiaries (x) has assets located in, or otherwise directly or indirectly derives revenues from or engages in investments, activities, dealings or transactions in or with, any Sanctioned Country, each to the extent in violation of applicable Sanctions (y) directly or indirectly conducts or will conduct any business, activity, transaction or other dealing with, including engaging in making or receiving any contribution of funds, goods or services, to or for the benefit of, any Sanctioned Person, each to the extent in violation of applicable Sanctions or (z) has dealt in during the past five years or is dealing in or will deal in, or otherwise engage in any activity or transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law or Sanctions, each to the extent in violation of applicable Sanctions.
(e)There has not been within the past five years, and are no pending or, to the knowledge of the Borrower, threatened claims, suit, proceeding, or any action against, or investigation by any Governmental Authority of, the Borrower or any of its Subsidiaries or Affiliates, or any of their respective officers, directors, employees, or, to Borrower’s knowledge, agents (in their capacity as such),
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or any informal or formal investigation by any Borrower or any of its Subsidiaries or Affiliates, or their respective legal or other representatives or a Governmental Authority involving the foregoing, nor is there any judgment imposed (or to the knowledge of the Borrower threatened to be imposed) upon the Borrower or any of its Subsidiaries or Affiliates by or before any Governmental Authority, in each case, in connection with any alleged violation of Anti-Corruption Laws, Anti-Terrorism Laws, Export-Import Control Laws or Sanctions, nor does there exist any condition on the basis of which any such claim may be reasonably asserted. Neither Borrower nor any of its Subsidiaries has received a notice from any Governmental Authority alleging a violation by Borrower, any of its Subsidiaries or Affiliates, or any of their respective officers, directors, employees, or, to Borrower’s knowledge, agents of Anti-Corruption Laws, Anti-Terrorism Laws, Export-Import Control Laws or Sanctions.
(f)Borrower shall immediately notify in writing Administrative Agent if Borrower has knowledge that Borrower, any Subsidiary or Affiliate of Borrower, or any of their respective officers, directors or employees, in their capacity as such, is or becomes a Sanctioned Person or (a) is convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is arraigned and held over on, charges involving, or predicate crimes to, Anti-Corruption Laws, Anti-Terrorism Laws, Export-Import Control Laws or Sanctions.
(g)Borrower has implemented and maintains in effect policies and procedures reasonably designed to ensure compliance by Borrower, its Subsidiaries and their respective directors, officers, employees and agents, in their capacity as such, with all Anti-Terrorism Laws, Anti-Corruption Laws, Export-Import Control Laws and Sanctions, and Borrower, each of its Subsidiaries and their respective officers, directors and employees and, to the knowledge of the Borrower, the Affiliates and agents, in their capacity as such, of Borrower and its Subsidiaries, have been during the past five years and are in compliance with all Anti-Terrorism Laws, Anti-Corruption Laws, Export-Import Control Laws and Sanctions.
Section 1.1Taxes. All income and other material Tax returns and reports required to be filed by Borrower or any of its Subsidiaries have been timely filed, and all Taxes, assessments, fees and governmental charges upon Borrower or any of its Subsidiaries and their properties, assets, income, businesses and franchises have been paid when due and payable, except (i) to the extent that such Taxes, assessments, charges or claims are being contested in good faith by appropriate proceedings and a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor and (ii) where the failure to do so would not reasonably be expected to have a Material Adverse Effect. All necessary and appropriate estimated payments (including any interest and penalties) in respect of assessed Tax liability under Borrower’s and its Subsidiaries’ state and federal income tax returns have been made on a timely basis except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.
Section 1.2[Reserved].
Section 1.3Environmental Matters. Except as would not reasonably be expected to result in a Material Adverse Effect: (i) Borrower and each of its Subsidiaries (A) has been and is in compliance with all applicable Environmental Laws; (B) has not received any communication, whether from a governmental authority or otherwise, alleging that Borrower or any of its Subsidiaries is not in such compliance; (ii) there is no Environmental Claim in writing pending or, to the knowledge of Borrower, threatened in writing against Borrower or any of its Subsidiaries; (iii) there are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the disposal, arrangement for disposal, release, threatened release or presence of any Hazardous Material, which could reasonably be expected to form the basis of any Environmental Claim against Borrower or any of its Subsidiaries and (iv) neither Borrower nor any of its Subsidiaries has, either expressly or by operation of law, assumed or undertaken any liability, including any obligation for corrective or remedial action, of any other Person relating to Environmental Laws.
Section 1.4Operating Company. (i) As of the date hereof, the Borrower and each of its Subsidiaries is an “operating company” within the meaning of the regulations of the United States Department of Labor included within 29 CFR Section 2510.3-101 (the “DOL Regulations”) or is in
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compliance with such other exception as may be available under such regulations to prevent the assets of Borrower or any of its Subsidiaries from being treated as the assets of any employee benefit plan for purposes of the DOL Regulations and (ii) as of the date hereof neither Borrower nor any Subsidiary of Borrower maintains or is obligated to make contributions to any employee benefit plan that is subject to Title IV of ERISA.
Section 1.5Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority or any other third Person (including members, shareholders or any class of directors, whether interested or disinterested, of any Credit Party or any other Person), nor is any such consent, approval, registration, filing or other action necessary for the validity or enforceability of any Loan Document, except (i) such as have been obtained or made and are in full force and effect, and (ii) filings necessary to record or perfect Liens created pursuant to the Loan Documents, (b) will not violate (i) any material applicable law or regulation or any order of any Governmental Authority or any applicable Governmental Requirement or (ii) the charter, by-laws or other organizational documents of the Borrower or any other Credit Party, (c) will not breach or result in a default under any indenture, material agreement or other material instrument binding upon the Borrower or any other Credit Party or its Properties, and (d) will not result in the creation or imposition of any Lien on any Property of the Borrower or any other Credit Party (other than the Liens created by the Loan Documents), except (in the case of clauses (a) and (d)) to the extent the failure to obtain or make such consent, approval, registration, filing or action, or such violation, default or right, as the case may be, would not reasonably be expected to have a Material Adverse Effect.
Section 1.6ERISA. Except as would not reasonably be expected to have a Material Adverse Effect:
(h)The Borrower, each Subsidiary and each ERISA Affiliate has complied with ERISA and the Code with respect to each Plan.
(i)Each Plan is, and has been, established and maintained in compliance with ERISA and the Code.
(j)No act, omission or transaction has occurred which could result in imposition on the Borrower or any Subsidiary (whether directly or indirectly) of (i) either a civil penalty assessed pursuant to subsections (c), (i) or (l) of section 502 of ERISA or a tax imposed pursuant to Chapter 43 of Subtitle D of the Code or (ii) breach of fiduciary duty liability damages under section 409 of ERISA.
(k)No liability to the PBGC (other than for the payment of current premiums which are not past due) by the Borrower, any Subsidiary or any ERISA Affiliate has been or is expected by the Borrower, any Subsidiary or any ERISA Affiliate to be incurred with respect to any Plan. No ERISA Event has occurred or is reasonably expected to occur.
(l)Full payment when due has been made of all amounts which the Borrower, the Subsidiaries or any ERISA Affiliate is required under the terms of each Plan, any agreement relating thereto, and/or applicable law, including ERISA and the Code, to have paid as contributions to such Plan as of the date on which this representation is (or is deemed) made, and there has been no failure to satisfy the minimum funding standards under section 412, 430 or 431 of the Code or section 302, 303 or 304, whether or not waived, with respect to any Plan.
(m)The actuarial present value of the benefit liabilities under each Plan does not, as of the end of the Borrower’s most recently ended fiscal year, exceed the current fair market value of the assets (computed on a plan contribution basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities. The term “actuarial present value of the benefit liabilities” shall have the meaning specified in section 4041 of ERISA.
(n)Neither the Borrower, the Subsidiaries nor any ERISA Affiliate sponsors, maintains or contributes to (or has an obligation to contribute to), or has at any time in the six-year period
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preceding the date on which this representation is (or is deemed) made sponsored, maintained or contributed to (or had an obligation to contribute to), any Multiemployer Plan.
(o)Neither the Borrower, the Subsidiaries nor any ERISA Affiliate is required to provide security under the Code, including under section 401(a)(29) or 436 of the Code, due to a Plan amendment that results in an increase in current liability for the Plan.
Section 1.11Disclosure; No Material Misstatements. The written information (other information of a general economic or general industry nature) furnished by or on behalf of the Borrower or any Subsidiary to the Administrative Agent or any Lender or any of their Affiliates in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or under any other Loan Document (as modified or supplemented by other information so furnished), when taken as a whole, does not contain any material misstatement of fact or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not materially misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time delivered and such projections are not to be viewed as facts and that actual results during the period or periods covered by any such projections and forecasts may differ from the projected or forecasted results.
Section 1.12Insurance. Each Credit Party has insurance coverage in at least amounts and against such risk (including public liability) that are usually insured against by companies similarly situated and engaged in the same or a similar business for the assets and operations of such Credit Party.
Section 1.13Subsidiaries. Schedule 7.19 sets forth, as of the Effective Date, the name and jurisdiction and type of organization of each Credit Party and each Credit Party's direct Subsidiary and, as to each such direct Subsidiary, the percentage of each class of Equity Interest owned by such Credit Party.
Section 1.14Use of Loans. The proceeds of the Loans shall be used (i) to partially redeem the 2024 Notes and (ii) for working capital and general corporate purposes of the Borrower and its Subsidiaries. No part of the proceeds of any Loan will be used for any purpose that violates the provisions of Regulations T, U or X of the Board.
Section 1.15Solvency. Immediately after giving effect to the Transactions (including each Borrowing hereunder), (a) the aggregate assets, at a fair valuation, of the Borrower and its Subsidiaries, taken as a whole, will exceed the aggregate Debt of the Borrower and its Subsidiaries, taken as a whole, as the Debt becomes absolute and matures, (b) the Borrower and its Subsidiaries, taken as a whole, will not have incurred or intended to incur, and do not believe that they will incur, Debt beyond their ability to pay such Debt as such Debt becomes absolute and matures and (c) the Borrower and its Subsidiaries, taken as a whole, will not have (and will have no reason to believe that they will have thereafter) unreasonably small capital for the conduct of their business.
Article VIII
AFFIRMATIVE COVENANTS
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder and all other amounts payable under the Loan Documents, including the Secured Obligations (other than unasserted indemnification and expense claims), shall have been paid in full, each Credit Party covenants and agrees with the Lenders, on behalf of itself and its Subsidiaries, that:
Section 1.038Financial Statements; Other Information. The Borrower will furnish to the Administrative Agent (for distribution to each Lender):
(f)Annual Financial Statements. Not later than ninety (90) days after the end of each fiscal year of the Borrower, commencing with the fiscal year ending March 31, 2023, its audited
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consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case (when applicable) in comparative form the figures for the previous fiscal year, all reported on by Moss Adams LLP or other independent certified public accounting firm of nationally recognized standing or other accounting firm reasonably acceptable to the Majority Lenders (which report shall be unqualified as to going concern and scope of audit, other than, in the case of going concern, an exception or explanatory note with respect to an upcoming maturity of any Debt occurring within 12 months of the relevant audit or any anticipated breach of any financial covenant) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied.
(g)Quarterly Financial Statements. Not later than forty-five (45) days after the end of first 3 fiscal quarters of each fiscal year of the Borrower, commencing with the fiscal quarter ending June 30, 2022, the internally prepared quarterly financial statements of Borrower and its Subsidiaries, certified by a Financial Officer of Borrower as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, each containing a consolidated balance sheet and stockholder’s equity as at the last day of such fiscal quarter and the related consolidated statement of operations and consolidated statement of cash flows for the fiscal quarter then ended and for the Borrower’s fiscal year to date.
(h)Certificate of Responsible Officer – Compliance. Concurrently with any delivery of financial statements under Section 8.01(a) or Section 8.01(b), a Compliance Certificate (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) certifying that such financial statements fairly present in all material respects the financial condition, results of operations, stockholders’ equity and cash flows of the Borrower and its Consolidated Subsidiaries in accordance with GAAP (with respect to unaudited financial statements, subject to normal year-end audit adjustments and the absence of footnotes), (iii) certifying compliance with Sections 9.18, 9.20 and 9.21 (as applicable) and reasonably detailed calculations thereof, including the calculation of Adjusted Cash EBITDA and (iv) listing any newly formed or acquired direct Subsidiary of any Credit Party (including the name and jurisdiction and type of organization of such Subsidiary and the percentage of each class of Equity Interest owned by the applicable Credit Party).
(i)SEC and Other Filings; Reports to Shareholders. Promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the SEC, or with any national securities exchange, or distributed by the Borrower to its equityholders generally, as the case may be.
(j)Information Regarding Borrower and Guarantors. Prompt written notice (and in any event within five (5) Business Days thereafter) of any change (i) in the Borrower’s or any Guarantor’s organizational name, (ii) in the location of the Borrower’s or any Guarantor’s chief executive office or principal place of business, (iii) in the Borrower’s or any Guarantor’s jurisdiction in which such Person is organized or formed, (iv) in the Borrower’s or any Guarantor’s organizational identification number in its jurisdiction of organization, and (v) in the Borrower’s or any Guarantor’s federal taxpayer identification number.
(k)Notices of Certain Changes. Concurrently with any delivery of financial statements under Section 8.01(a), copies of any amendment, modification or supplement to the certificate or articles of incorporation, bylaws, certificate or articles of organization, any preferred stock designation or any other organic document of the Borrower or any Guarantor.
(l)Other Requested Information. Promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary (including any Plan or Multiemployer Plan and any reports or other information required to be filed under ERISA with respect to any such Plan or Multiemployer Plan), or compliance with the terms of this Agreement or any other Loan Document, as the Administrative Agent may reasonably
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request (as directed by the Majority Lenders); provided that neither the Borrower nor any Subsidiary shall be required to provide any such information to the extent that the provision thereof would violate any attorney-client privilege, law, rule or regulation or any confidentiality obligation binding on the Borrower and/or any Subsidiary (so long as such confidentiality obligation was not entered into in contemplation of preventing such information from being provided and the Borrower and the applicable Subsidiary use commercially reasonable efforts to obtain a waiver of any such confidentiality obligation); provided further that the Borrower shall provide the Administrative Agent with notice of the existence of any such information that is being withheld.
(m)Annual Budget. No later than ninety (90) days after the end of each fiscal year, and promptly following any updates or changes thereto that are approved by the Borrower Board, an annual operating budget for the Borrower and its Subsidiaries for the current fiscal year that is approved by the Borrower Board and the assumptions used in calculating such projections; provided that, to the extent any of the information set forth above is submitted to the Borrower Board on a quarterly basis, such information may be provided on a quarterly basis hereunder.
Information required to be delivered pursuant to clause (a), (b) or (d) of this Section shall be deemed to have been delivered to the Administrative Agent and the Lenders if such information, or one or more annual or quarterly reports containing such information, shall be available on the website of the SEC at http://www.sec.gov.
Section 1.039Notices of Material Events. The Borrower will furnish to the Administrative Agent (for distribution to each Lender) pursuant to Section 12.01(a) prompt (and in any event within five (5) Business Days) written notice after obtaining actual knowledge thereof of the following:
(a)the occurrence of any Default;
(b)the filing or commencement of, or the threat in writing of, any action, suit, proceeding, investigation or arbitration by or before any arbitrator or Governmental Authority against the Borrower or any Subsidiary thereof not previously disclosed in writing to the Lenders or any material adverse development in any action, suit, proceeding, investigation or arbitration previously disclosed to the Lenders, in each case that would reasonably be expected to result in a Material Adverse Effect; and
(c)the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, would reasonably be expected to result in liability of the Borrower or any Subsidiary in an aggregate amount that would have a Material Adverse Effect;
(d)the abandonment, expiration, or cancellation of any Intellectual Property other than any abandonment, expiration, or cancellation, in each case in the reasonable good faith judgement of Borrower that is not material to the conduct of the business of the Borrower and its Subsidiaries, including the expiration of Patents and Copyrights in accordance with the applicable statutory term;
(e)any other development that results in, or would reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section 8.02 shall be accompanied by a statement of a Responsible Officer setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
Section 1.040Existence; Conduct of Business. The Borrower will, and will cause each Subsidiary to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect (a) its legal existence, (b) the rights, licenses, permits, privileges and franchises material to the conduct of its business and maintain, if necessary, its qualification to do business in each other jurisdiction in which its Properties are located or the ownership of its Properties requires such qualification, and (c) use its commercially reasonable efforts to maintain and enforce all Intellectual Property owned by Borrower (in the reasonable good faith judgement of Borrower, including the expiration of Patents and Copyrights in accordance with the applicable statutory term), except where the
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failure to do any of the foregoing described in clauses (b) or (c) would not reasonably be expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation, dissolution or other transaction permitted under Section 9.10.
Section 1.041Payment of Obligations. The Borrower will, and will cause each Subsidiary to, pay, discharge or otherwise satisfy as the same shall become due and payable, all liabilities, including Tax liabilities of the Borrower and of all of its Subsidiaries before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings and the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP (to the extent so required by GAAP) or (b) the failure to do so would not reasonably be expected to result in a Material Adverse Effect.
Section 1.042[Reserved].
Section 1.043Operation and Maintenance of Properties. Except, in each case, where the failure to comply would not reasonably be expected to have a Material Adverse Effect, the Borrower, at its own expense, will, and will cause each Subsidiary to:
(a)operate its material Properties or cause such material Properties to be operated in a careful and efficient manner in accordance with the practices of a normal prudent company engaged in the same or similar business and in compliance with all applicable contracts and agreements and in compliance with all Governmental Requirements, including applicable proration requirements and Environmental Laws, and all applicable laws, rules and regulations of every other applicable Governmental Authority from time to time constituted to regulate the development and operation of its Properties;
(b)keep and maintain all Property material to the conduct of its business in good working order and condition, ordinary wear and tear and casualty and condemnation excepted, and preserve, maintain and keep in good repair, working order and efficiency (ordinary wear and tear excepted) all of its material Properties, including all material equipment, machinery and facilities;
(c)promptly pay and discharge, or make reasonable and customary efforts to cause to be paid and discharged, all rentals, royalties, expenses and Debt accruing under the leases or other agreements affecting or pertaining to its material Properties and will do all other things necessary to keep unimpaired their rights with respect thereto and prevent any forfeiture thereof or default thereunder;
(d)promptly perform or make reasonable and customary efforts to cause to be performed, in accordance with standards appropriate for a normal prudent company engaged in the same or similar business, the obligations required by each and all of the assignments, deeds, leases, sub-leases, contracts and agreements affecting its interests in its material Properties; and
(e)operate its material Properties or cause or make reasonable and customary efforts to cause such material Properties to be operated in accordance with the practices appropriate for a normal prudent company engaged in the same or similar business and in material compliance with all applicable contracts and agreements and in compliance in all material respects with all Governmental Requirements.
Section 1.044Insurance. The Borrower will, and will cause each Subsidiary to, maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations (provided, if any such insurance company shall at any time cease to be financially sound and reputable, there shall be no breach of this provision in the event the Credit Parties promptly (and in any event within thirty (30) days of such date) obtain insurance from an alternative insurance carrier that is financially sound and reputable). Subject to Section 8.16 hereof, the loss payable clauses or provisions in said insurance policy or policies insuring any of the collateral for the Loans shall be endorsed in favor of the Administrative Agent as its interests may appear and such policies shall name the Administrative Agent as “additional insured” or "loss payee" as applicable and, to the extent available
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from the insurance companies on commercially reasonable terms, provide that the insurer will endeavor to give at least thirty (30) days prior notice of any cancellation to the Administrative Agent.
Section 1.045Books and Records; Inspection Rights. The Borrower will, and will cause each Subsidiary to, keep proper books of record and account in which entries are made in conformity with GAAP. Subject to the following sentence, the Borrower will, and will cause each Subsidiary to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to concurrently visit and inspect its Properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants (provided that the Borrower may, if it so chooses, be present at or participate in any such discussion), all at such reasonable times during normal business hours. Notwithstanding the foregoing, excluding any such visits and inspections during the continuation of an Event of Default, (a) no more than one such inspection shall occur in any fiscal year and (b) the aggregate expenses of Administrative Agent and any Lender in connection with such inspections required to be reimbursed by Borrower shall not exceed Ten Thousand Dollars ($10,000) per fiscal year; provided, that when an Event of Default exists, the Administrative Agent or any Lender (or any of their representatives) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and upon reasonable prior notice. Notwithstanding anything to the contrary in this Section 8.08, none of the Borrower or any of its Subsidiaries will be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (a) constitutes non-financial trade secrets or non-financial proprietary information, (b) in respect of which disclosure to the Administrative Agent or any Lender (or their respective Related Parties) is prohibited by law or any binding agreement (so long as such binding agreement was not entered into in contemplation of preventing such information from being provided and the Borrower and the applicable Subsidiary use commercially reasonable efforts to obtain a waiver of any such binding agreement) or (c) is subject to attorney-client or similar privilege or constitutes attorney work product; provided that the Borrower shall provide the Administrative Agent and the Lenders with notice of the existence of any such information that is being withheld.
Section 1.046Compliance with Laws. The Borrower will, and will cause each Subsidiary to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its Property, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.
Section 1.10Environmental Matters.
The Borrower shall at its sole expense: (i) comply, and shall cause its Properties and operations and each Subsidiary and each Subsidiary’s Properties and operations to comply, with all applicable Environmental Laws, the breach of which would be reasonably expected to have a Material Adverse Effect; (ii) not dispose of or otherwise release, and shall cause each Subsidiary not to dispose of or otherwise release, any Hazardous Material on, under, about or from the Borrower or any of its Subsidiaries’ Properties or any other Property to the extent caused by the Borrower’s or any of its Subsidiaries’ operations except in compliance with applicable Environmental Laws, the disposal or release of which would reasonably be expected to have a Material Adverse Effect; (iii) timely obtain or file, and shall cause each Subsidiary to timely obtain or file, all notices, permits, licenses, exemptions, approvals, registrations or other authorizations, if any, required under applicable Environmental Laws to be obtained or filed in connection with the operation or use of the Borrower’s or its Subsidiaries’ Properties, which failure to obtain or file would reasonably be expected to have a Material Adverse Effect; (iv) promptly commence and diligently prosecute to completion, and shall cause each Subsidiary to promptly commence and diligently prosecute to completion, any assessment, evaluation, investigation, monitoring, containment, cleanup, removal, repair, restoration, remediation or other remedial obligations (collectively, the “Remedial Work”) in the event any Remedial Work is required or reasonably necessary under applicable Environmental Laws because of or in connection with the actual or suspected past, present or future disposal or other release of any Hazardous Material on, under, about or from the Borrower’s or any of its Subsidiaries’ Properties, which failure to commence and diligently prosecute to completion would reasonably be expected to have a Material Adverse Effect; and (v) establish and implement, and shall cause each Subsidiary to establish and implement, such procedures as may be necessary to continuously determine and assure that the Borrower’s and its Subsidiaries’ obligations
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under this Section 8.10(a) are timely and fully satisfied, which failure to establish and implement would reasonably be expected to have a Material Adverse Effect.
Section 1.11Further Assurances.
(a)(a) Subject in all respects to the exceptions and limitations set forth in the Loan Documents, the Borrower at its expense will, and will cause each Guarantor to, promptly execute and deliver to the Administrative Agent all such other documents, agreements and instruments reasonably requested by the Administrative Agent (as directed by the Majority Lenders) to comply with, cure any defects or accomplish the conditions precedent, covenants and agreements of the Borrower or any Guarantor, as the case may be, in the Loan Documents, including the Notes, or to further evidence and more fully describe the Collateral intended as security for the Secured Obligations, or to correct any defect, error or inaccuracy in this Agreement or the Security Instruments, or to state more fully the Obligations secured therein, or to perfect, protect or preserve any Liens created pursuant to this Agreement or any of the Security Instruments or the priority thereof, or to make any recordings, file any notices or obtain any consents, all as may be reasonably necessary or appropriate, or as requested by the Administrative Agent (as directed by the Majority Lenders in their reasonable discretion), in connection therewith.
(b)The Borrower hereby authorizes the Administrative Agent (but without any obligation to do so) to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Collateral without the signature of the Borrower or any Guarantor where permitted by law. A carbon, photographic or other reproduction of the Security Instruments or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law. Notwithstanding the foregoing or anything to the contrary herein or in any other Loan Document, the Administrative Agent shall not be responsible for the preparation, filing, form, content or continuation of any UCC financing statements, mortgages, assignments, conveyances, financing statements, transfer endorsements or similar instruments. For the avoidance of doubt, the Majority Lenders (or counsel to the Majority Lenders) shall make all filings (including filings of continuation statements and amendments to UCC financing statements that may be necessary to continue the effectiveness of such UCC financing statements) necessary to maintain (at the sole cost and expense of the Borrower) the security interest created by the Security Instruments in the Collateral as a first priority perfected security interest to the extent perfection is required herein or by the Security Instruments, and promptly provide evidence thereof to the Administrative Agent.
Section 1.16Additional Collateral; Additional Guarantors.
(c)The Borrower shall promptly cause each direct Domestic Subsidiary (other than any Excluded Subsidiary) formed or acquired after the Effective Date and any Domestic Subsidiary that ceases to be an Excluded Subsidiary after the Effective Date to (i) guarantee the Secured Obligations pursuant to a Joinder Agreement substantially in the form of Exhibit F hereto and (ii) grant to the Administrative Agent, a perfected security interest in all of the Collateral (as defined in the Security Agreement) pursuant to the Security Agreement. In connection therewith, the Borrower shall, or shall cause such Domestic Subsidiary, as applicable, to, no later than thirty (30) days (or such longer period of time as agreed to by the Majority Lenders) after the formation or acquisition of any such Domestic Subsidiary or thirty (30) days (or such longer period of time as agreed to by the Majority Lenders) after the date such Domestic Subsidiary ceased to be an Excluded Subsidiary, as applicable to, (A) execute and deliver a Joinder Agreement substantially in the form of Exhibit F hereto, in each case executed by such Domestic Subsidiary, (B) execute and deliver a joinder to the Security Agreement, in each case executed by such Domestic Subsidiary, and (C) pledge all of the Equity Interests (other than Excluded Equity Interests) of such Domestic Subsidiary that are owned by any Credit Party (and deliver the original stock certificates, if any, evidencing the Equity Interests of such Domestic Subsidiary, if any, together with an appropriate undated stock power for each certificate duly executed in blank by the registered owner thereof). The Credit Parties shall deliver, or cause to be delivered, to the Administrative Agent, appropriate resolutions, secretary’s (or equivalent) certificates, certified organizational documents and, if
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requested by the Administrative Agent (as directed by the Majority Lenders), legal opinions relating to the matters described in this Section 8.12(a) (which opinions shall be in form and substance reasonably acceptable to the Majority Lenders and, to the extent applicable, substantially similar to the opinions delivered on the Effective Date), in each instance with respect to each Credit Party so joined after the Effective Date.
(d)The Borrower shall and shall cause its Subsidiaries to, with respect to any fee interest in any real property having a value (together with improvements thereof) of at least $5,000,000 acquired after the Effective Date by any Credit Party, promptly, (i) execute and deliver a Mortgage, in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, covering such real property, (ii) if requested by the Administrative Agent (as directed by the Majority Lenders), provide the Lenders with (1) title and extended coverage insurance (with such customary endorsements, coinsurance and reinsurance as the Administrative Agent may reasonably request as directed by the Majority Lenders) covering such real property, paid for by the Borrower and issued by a nationally recognized title insurance company, in an amount at least equal to the purchase price of such real property (or such other amount as shall be reasonably specified by the Administrative Agent as directed by the Majority Lenders), (2) a current ALTA/NSPS survey thereof, paid for by the Borrower and in each case, including all improvements, easements and other customary matters thereon reasonably required by the Majority Lenders, together with a surveyor’s certificate and complying in all material respects with the minimum detail requirements of the American Land Title Association and National Society of Professional Surveyors as such requirements are in effect on the date of preparation of such survey (sufficient for such title insurance company to remove all standard survey exceptions from the title insurance policy relating to such real property and issue the customary survey related endorsements or otherwise reasonably acceptable to the Majority Lenders), (3) any consents, estoppels or SNDAs reasonably deemed necessary or advisable by the Majority Lenders in connection with such Mortgage, each of the foregoing in form and substance reasonably satisfactory to the Majority Lenders, (4) flood insurance determination certificates, and if applicable, evidence that the applicable Credit Party has obtained flood insurance covering such property in appropriate amount, (5) appraisals with respect to each such real property, and (6) such other documents as the Administrative Agent (as directed by the Majority Lenders) may reasonably request that are available to the Borrower without material expense with respect to any such real Property, and (iii) if requested by the Administrative Agent (as directed by the Majority Lenders), deliver to the Administrative Agent legal opinions relating to such Mortgage, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Majority Lenders.
(e)At the request of the Administrative Agent (as directed by the Majority Lenders), the Borrower shall use commercially reasonable efforts to obtain a landlord’s agreement, from any lessor of any chief executive office of the Borrower, which agreement or letter shall contain a waiver or subordination of all Liens or claims that the landlord may asset against the Collateral at the location, and shall otherwise be reasonably satisfactory in form and substance to the Majority Lenders. Each Credit Party shall pay and perform its material obligations under all leases and other material agreements with respect to each leased location or public warehouse where Collateral is located, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.
(f)Notwithstanding anything to the contrary contained herein or in any other Loan Document, (i) no actions in any non-U.S. jurisdiction or required by the law of any non-U.S. jurisdiction shall be required in order to create a security interest in any assets or to perfect or make enforceable such security interest (including property registered or applied-for in any non-U.S. jurisdiction) it being understood that there shall be no security agreement or pledge agreement governed under the laws of any non-U.S. jurisdiction or any requirement to make any filings in any foreign jurisdiction including with respect to Intellectual Property and (ii) no Credit Party shall be required to seek any landlord waiver, bailee letter, estoppel, warehouseman waiver or other collateral access, lien waiver or similar letter of agreement.
Section 1.1ERISA Compliance.
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(g)Unless reasonably expected to result in liability to the Borrower or any Subsidiary that would not have a Material Adverse Effect (individually or in the aggregate), the Borrower will promptly furnish and will cause the Subsidiaries and any ERISA Affiliate to promptly furnish to the Administrative Agent (i) promptly upon becoming aware of the occurrence of any ERISA Event or of any “prohibited transaction,” as described in section 406 of ERISA or in section 4975 of the Code, in connection with any Plan or any trust created thereunder, a written notice signed by the President or other Responsible Officer of the Borrower, the Subsidiary or the ERISA Affiliate, as the case may be, specifying the nature thereof, what action the Borrower, the Subsidiary or the ERISA Affiliate is taking or proposes to take with respect thereto, and, when known, any action taken or proposed by the Internal Revenue Service, the Department of Labor and/or the PBGC with respect thereto, and (ii) promptly upon receipt thereof, copies of any notice of the PBGC’s intention to terminate or to have a trustee appointed to administer any Plan.
(h)With respect to each Plan (other than a Multiemployer Plan), unless reasonably expected to result in liability to the Borrower or any Subsidiary that would not have a Material Adverse Effect (individually or in the aggregate), the Borrower will, and will cause each Subsidiary and ERISA Affiliate to, (i) satisfy in full and in a timely manner, without incurring any late payment or underpayment charge or penalty and without giving rise to any lien, all of the contribution and funding requirements of the Code and ERISA, including sections 412, 430, 431, 432 and 436 of the Code and sections 302, 303, 304 and 305 of ERISA, and (ii) pay, or cause to be paid, to the PBGC in a timely manner, without incurring any late payment or underpayment charge or penalty, all premiums required pursuant to sections 4006 and 4007 of ERISA.
Section 1.17Anti-Terrorism Laws, Anti-Corruption Laws, and Sanctions. Each Credit Party will implement and maintain in effect policies and procedures reasonably designed to ensure compliance by such Credit Party, its Subsidiaries and their respective directors, officers, employees and agents, in their capacity as such, with all Anti-Terrorism Laws, Anti-Corruption Laws, Export-Import Control Laws and Sanctions. Each Credit Party will be, and will cause each Subsidiary, and their respective officers, employees, directors and agents, in their capacity as such, to be in compliance with Sanctions and material compliance with all Anti-Terrorism Laws, Anti-Corruption Laws and Export-Import Control Laws. None of (a) any Credit Party, Subsidiary, Affiliate, or any of their respective directors, officers, or employees, or (b) to the knowledge of the Borrower, any agent of such Credit Party, Subsidiary or Affiliate that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person.
Section 1.18Deposit Accounts; Commodity Accounts and Securities Accounts. Subject to Section 8.16 hereof, the Borrower and each Guarantor shall not establish or maintain a deposit account, securities account or commodities account in the United States (other than Excluded Accounts), without executing and delivering to Administrative Agent, an Account Control Agreement, in form and substance reasonably satisfactory to the Majority Lenders and to the Administrative Agent as to its rights and duties, covering the applicable deposit account, securities account or commodities account.
Section 1.19Post-Closing Obligations. No later than:
(i)(i) sixty (60) days after the Effective Date (or such longer period as may be agreed to by the Majority Lenders in their sole discretion), the Borrower shall deliver appropriate loss payable endorsements naming the Administrative Agent as an additional insured and/or lender loss payee (as applicable) as its interests may appear with respect to all insurance coverage and providing for thirty (30) days prior written notice to the Administrative Agent for cancellation of, material reduction in amount or material change in any insurance coverage and (ii) twenty (20) days after the Effective Date (or such longer period as may be agreed to by the Majority Lenders in their sole discretion), a certificate of insurance coverage of the Borrower naming the Administrative Agent as additional insured and evidencing that the Borrower is carrying insurance in accordance with Section 8.07;
(j)sixty (60) days after the Effective Date (or such longer period as may be agreed to by the Majority Lenders in their sole discretion), the Borrower shall deliver fully executed copies of
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Account Control Agreements governing each Deposit Account, Commodity Account and/or Securities Account (other than Excluded Accounts) of a Credit Party located in the United States;
(k)sixty (60) days after the Effective Date (or such longer period as may be agreed to by the Majority Lenders in their sole discretion), the Borrower shall deliver to the Administrative Agent stock certificates representing the shares issued by 8x8 International Pty Ltd., 8x8 International, Inc., Fuze Australia Pty Ltd, Fuze Europe B.V., 8x8 UK Limited, 8x8 Japan GK, 8x8 International Pte. Ltd, and 8x8 India Private Ltd (together with undated stock powers executed and delivered in blank by a duly authorized signatory of the applicable holders of such stock certificates), in each case solely to the extent the Equity Interests therein are certificated; and
(l)ten (10) days after the Effective Date (or such longer period as may be agreed to by the Majority Lenders in their sole discretion), the Borrower shall deliver to the Administrative Agent stock certificates representing the shares issued by 8x8 International Holding Co., LeChat, Inc., Fuze, Inc. and Optoriot Asia Holdings, Inc. (together with undated stock powers executed and delivered in blank by a duly authorized signatory of the applicable holders of such stock certificates).
Article IX
NEGATIVE COVENANTS
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder and all other amounts payable under the Loan Documents, including the Secured Obligations (other than unasserted indemnification and expense claims), have been paid in full, each Credit Party covenants and agrees with the Lenders that:
Section 1.047Payment of Debt. The Borrower shall not, and shall not permit any Subsidiary to, voluntarily cancel, forgive, make (directly or indirectly) any voluntary payment or prepayment or other voluntary distribution (whether in cash, securities or other property) on, or voluntarily purchase, redeem or acquire for value (including, without limitation, by way of depositing with any trustee with respect thereto money or securities before due for the purpose of paying when due) or voluntarily defease or otherwise voluntarily satisfy any Debt (in each case other than the Loans and any intercompany Debt) (it being understood that payments, prepayments, other distributions, purchases, redemptions or acquisitions for value required by the terms of any Permitted Convertible Notes shall not be considered “voluntary” for purposes of this Section 9.01), except:
(a)with respect to Convertible Notes, (i) from the proceeds of or in consideration for other Convertible Notes, (ii) from the proceeds of or in consideration for Equity Interests of the Borrower or (iii) with respect to accrued and unpaid interest on such Convertible Notes, fractional Convertible Notes or fractional shares of the common stock of the Borrower, any payment of cash;
(b)the conversion of any Debt into Equity Interests (other than Disqualified Capital Stock) of the Borrower or into cash by reference to Equity Interests (other than Disqualified Capital Stock) of the Borrower or otherwise in exchange thereof (including any payment for accrued and unpaid interest) and payment of cash in lieu of the issuance of fractional shares in connection with any conversion or exercise of such Debt;
(c)additional payments, prepayments, distributions, purchases, redemptions and acquisitions in an aggregate amount not to exceed $1,000,000;
(d)payments, prepayments, distributions, purchases, redemptions and acquisitions made with the proceeds of any Permitted Refinancing in respect of the applicable Debt;
(e)non-cash payments, prepayments, distributions, purchases, redemptions and acquisitions of Permitted Convertible Notes; and
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(f)cash payments, prepayments, distributions, purchases, redemptions and acquisitions of the 2024 Notes; provided that the Borrower shall have delivered to the Administrative Agent an officer’s certificate executed by an authorized officer of the Borrower certifying to the Administrative Agent and the Lenders that (x) at the time of any such payment, prepayment, distribution, purchase, redemption or acquisition, and immediately after giving effect thereto, no Event of Default exists and (y) the Borrower, after giving pro forma effect to such payment, prepayment, distribution, purchase, redemption or acquisition, is in compliance with the covenant contained in Section 9.18.
Section 1.048Debt. The Borrower shall not, and shall not permit any Subsidiary to, incur, create, assume or suffer to exist any Debt, except:
(a)the Secured Obligations arising under the Loan Documents or any guaranty of or suretyship arrangement for the Secured Obligations arising under the Loan Documents;
(b)Debt in respect of Permitted Convertible Notes (and any Permitted Refinancing thereof) or Permitted Convertible Note Hedging Arrangements;
(c)Debt existing on the Effective Date and set forth in Schedule 9.02 and any Permitted Refinancing thereof;
(d)to the extent constituting Debt: (i) accounts payable and accrued expenses, liabilities or other obligations to pay the deferred purchase price of Property or services, from time to time incurred in the ordinary course of business, (ii) obligations to make purchase price adjustments, earn-out obligations and indemnities or obligations under deferred compensation or similar arrangements, in each case in connection with the Transactions, the Exchange Transactions, any Permitted Acquisition or other Investment or any sale, transfer or other disposition permitted hereunder (other than earn-outs and similar obligations); and (iii) deferred compensation to current or former directors, officers, employees, members of management, managers, members, partners, independent contractors and consultants of the Borrower or any of its Subsidiaries in the ordinary course of business;
(e)Debt of any Credit Party or any Subsidiary of a Credit Party incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Debt), including Capital Lease obligations and any Debt assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, in an aggregate principal amount not to exceed $10,000,000 at any one time outstanding, and Permitted Refinancings thereof;
(f)Debt incurred by any Credit Party or any Subsidiary of a Credit Party in respect of letters of credit, bank guarantees, bankers’ acceptances or similar instruments issued or created, or related to obligations or liabilities incurred, in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other reimbursement-type obligations regarding workers compensation claims in an aggregate principal amount not to exceed $12,000,000 at any one time outstanding;
(g)intercompany Debt between the Borrower and any Subsidiary or between any Subsidiary and any other Subsidiary to the extent permitted by Section 9.05(a); provided that any such Debt owed by either the Borrower or a Guarantor shall be subordinated to the prior payment in full in cash of the Secured Obligations on customary terms reasonably satisfactory to Majority Lenders;
(h)(i) Debt in connection with (A) credit cards (including, without limitation, “commercial credit cards” and purchasing cards), (B) stored value cards, (C) merchant processing services, (D) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, any direct debit scheme or arrangement, overdrafts, cash pooling services, and interstate depository network services), and (E) foreign exchange and currency management services incurred in the ordinary course of business, (ii) other Debt incurred in the ordinary course of business in respect of netting services, overdraft protections and similar arrangements and Debt
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incurred in the ordinary course of business arising from the honoring of a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds; and (iii) endorsements of negotiable instruments for collection in the ordinary course of business, in each of clauses (A), (B), (C), (D) and (E) in an aggregate amount not to exceed $5,000,000 at any time;
(i)Debt owing to any insurance company in connection with the financing of any insurance premiums permitted by such insurance company in the ordinary course of business;
(j)subordinated Debt of the Borrower subject to a customary subordination agreement reasonably satisfactory to Majority Lenders and, as to the rights, duties and obligations of the Administrative Agent, the Administrative Agent;
(k)to the extent constituting Debt, obligations arising under indemnity agreements to title insurers to cause such title insurers to issue to the Administrative Agent title insurance policies;
(l)Debt (including deposits) in respect of performance, bid, customs, government, appeal and surety bonds, performance and completion guarantees and similar obligations or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case provided in the ordinary course of business;
(m)Guarantees by the Borrower or any of its Subsidiaries in respect of Debt of the Borrower or any of its Subsidiaries otherwise permitted under this Section 9.02; provided that (x) if such Debt is subordinated to the Secured Obligations, any such guaranty shall be subordinated to the same extent and (y) any Guarantee by a Credit Party of Debt of a Subsidiary that is not a Credit Party shall be permitted under Section 9.05;
(n)other Debt incurred by the Credit Parties not to exceed $50,000,000 in the aggregate at any one time outstanding; and
(o)all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (n) above.
Section 1.049Liens. The Borrower shall not, and shall not permit any Subsidiary to, create, incur, permit or grant a security interest or suffer to exist or permit a Lien, claim or other encumbrance or any charges to attach to or affect any of their Properties, except (collectively, “Permitted Liens”):
(a)any Lien existing on the Property of a Credit Party or a Subsidiary of a Credit Party on the Effective Date and set forth in Schedule 9.03 securing Debt and/or other obligations outstanding on such date and permitted by Section 9.02, including replacement Liens on the Property currently subject to such Liens securing Debt and/or other obligations permitted by Section 9.02;
(b)any Lien created under any Loan Document;
(c)Liens for Taxes, fees, assessments or other charges (i) which are not past due or remain payable without penalty, (ii) the non-payment of which is permitted by Section 7.11 or (iii) are being contested in good faith by appropriate proceedings and for which adequate reserves have been made in accordance with GAAP (to the extent so required);
(d)statutory Liens of landlords, carriers, warehousemen, mechanics, repairmen, landlords, materialmen or other similar Liens incurred in the ordinary course of business for sums which are not delinquent for more than ninety (90) days or remain payable without penalty or that are being contested in good faith by appropriate proceedings being diligently conducted and for which the Borrower maintains adequate reserves in accordance with GAAP (to the extent so required);
(e)Liens arising from judgments, decrees or attachments in circumstances which do not constitute an Event of Default;
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(f)to the extent made in the ordinary course of business, deposits under worker’s compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure statutory obligations (other than Liens arising under ERISA or the Code or environmental Liens) or surety or appeal bonds, or to secure indemnity, performance or other similar bonds;
(g)banker’s Liens, rights of setoff and similar Liens arising by operation of law on deposits made in the ordinary course of business, provided such Liens do not arise in respect of borrowed money;
(h)(i) licenses and sublicenses of, or any other grant of right to use or otherwise exploit, Intellectual Property or any other intangible assets granted by the Borrower or any of its Subsidiaries in the ordinary course of business and (ii) licenses under or other grants of rights in Intellectual Property granted by the Borrower or any of its Subsidiaries in connection with participation in the "License on Transfer Network" administered by LOT Network Inc. or its successor or another entity appointed thereby;
(i)Liens arising in connection with Debt described in Section 9.02(e); provided that (i) any such Lien attaches to such Property concurrently with the acquisition thereof, (ii) such Lien attaches solely to the Property so acquired in such transaction and the proceeds thereof (other than improvements, accessions or proceeds in respect thereof and assets fixed or appurtenant thereto), and (iii) the principal amount of the Debt secured thereby does not exceed 100% of the cost of such Property plus fees, costs, expenses and other liabilities incurred in connection with the acquisition of such Property;
(j)Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods;
(k)Liens on insurance proceeds securing the payment of financed insurance premiums;
(a)with respect to leased real estate, Liens to which the fee or other superior interest in such real property is subject;
(p)Liens arising from the filing of precautionary uniform commercial code financing statements with respect to any lease not prohibited by this Agreement;
(q)licenses and sublicenses granted by a Credit Party or any Subsidiary of a Credit Party and leases and subleases (by a Credit Party or any Subsidiary of a Credit Party as lessor or sublessor), in each case in the ordinary course of business not interfering in any material respect with the business of the Credit Parties or any of their Subsidiaries;
(r)Liens in favor of collecting banks arising by operation of law under Section 4-210 of the UCC or, with respect to collecting banks located in the State of New York, under Section 4- 208 of the UCC;
(s)easements, covenants, conditions, rights-of-way and other restrictions, exceptions, defects, other irregularities in title or other matters of record, and other similar encumbrances which, either individually or in the aggregate, do not in any case interfere in any material respect with the ordinary conduct of the businesses of the Credit Parties and their Subsidiaries, taken as a whole;
(t)zoning, building codes and other land use laws regulating the use or occupancy of Real Estate or the activities conducted thereon which are imposed by any Governmental Authority having jurisdiction over such Real Estate;
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(u)Liens attaching solely to cash earnest money deposits in connection with Investments permitted under Section 9.05;
(v)Liens on Property, and only such Property, which is the subject of an unconsummated asset purchase agreement in connection with an Asset Disposition permitted hereunder, which Liens secure the obligation of a Credit Party or any Subsidiary of a Credit Party under such agreement;
(w)Liens consisting of prepayments and security deposits in connection with leases, subleases, licenses, sublicenses, use and occupancy agreements, utility services and similar transactions entered into by the applicable Credit Party or Subsidiary of a Credit Party in the ordinary course of business and not required as a result of any breach of any agreement or default in payment of any obligation;
(x)Liens on cash collateral securing letters of credit permitted pursuant to Section 9.02(l);
(b)with respect to any Property subject to a Mortgage, (1) any exceptions listed on the applicable title policy that are accepted by the Administrative Agent (as directed by the Majority Lenders) and (2) matters that are disclosed by the ALTA survey (or survey equivalent) and accepted by the Administrative Agent (as directed by the Majority Lenders); and
(a)other Liens not to exceed $10,000,000 in the aggregate at any one time outstanding; provided that, to the extent any such Liens encumber the Collateral or are incurred by Credit Party such Liens must be junior to the Liens securing the Secured Obligations.
Section 1.050Restricted Payments. The Borrower shall not declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, other than:
(y)conversions of any of the Borrower’s convertible securities into Equity Interests of the Borrower (other than Disqualified Capital Stock) and/or cash by reference thereto pursuant to the terms of such convertible securities or otherwise in exchange thereof (including any payment for accrued and unpaid interest) and payment of cash in lieu of the issuance of fractional shares in connection with any conversion or exercise of such convertible securities;
(z)in connection with any exchange or repurchase of any Convertible Notes, (i) from the proceeds of or in consideration for other Convertible Notes, (ii) from the proceeds of or in consideration for Equity Interests of the Borrower or (iii) with respect to accrued and unpaid interest on such Convertible Notes, fractional Convertible Notes or fractional shares of the common stock of the Borrower, any payment of cash;
(aa)the payment of dividends solely in the form of Equity Interests of the Borrower (other than Disqualified Capital Stock);
(ab)the repurchase of shares of Borrower’s common stock from employees, directors, consultants and other Persons performing services for Borrower pursuant to agreements under which Borrower has the option to repurchase such shares upon the termination of such Person’s employment or services for Borrower; provided that (A) at the time of any such repurchase, and after giving effect thereto, no Event of Default exists and (B) the aggregate cash paid in connection with such repurchases during any calendar year during the term hereof does not exceed $1,000,000;
(ac)(A) as required pursuant to the terms of any Permitted Convertible Notes or (B) in connection with any entry, settlement, termination, unwind, or otherwise pursuant to the terms of any Permitted Convertible Note Hedging Arrangement;
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(ad)any purchase of any Equity Interests from purchasers of any Permitted Convertible Notes in connection with the establishing of a hedge position by such purchaser or a financial intermediary with respect to such Permitted Convertible Notes;
(ae)non-cash payments, prepayments, distributions, purchases, redemptions and acquisitions of the Permitted Convertible Notes;
(af)cash payments, prepayments, distributions, purchases, redemptions and acquisitions of the 2024 Notes; provided that the Borrower shall have delivered to the Administrative Agent an officer’s certificate executed by an authorized officer of the Borrower certifying to the Administrative Agent and the Lenders that (x) at the time of any such payment, prepayment, distribution, purchase, redemption or acquisition, and immediately after giving effect thereto, no Event of Default exists and (y) the Borrower, after giving pro forma effect to such payment, prepayment, distribution, purchase, redemption or acquisition, is in compliance with the covenant contained in Section 9.18;
(ag)the Borrower may make repurchases of Equity Interests of the Borrower (A) deemed to occur on the exercise of stock options or warrants or similar rights if such Equity Interests represent the delivery of a portion of the Equity Interests subject to such options or warrants or similar rights in satisfaction of the exercise price of such stock options, warrants or similar rights (and do not involve cash consideration) or (B) deemed to occur in the case of payment by the Borrower of withholding or similar Taxes payable by any future, present or former officer, director, employee, consultant or agent (or heirs or other permitted transferees thereof), in connection with the exercise or vesting of stock options, restricted stock warrants or similar rights (in lieu of a portion of the shares that otherwise would be issued upon such exercise or vesting);
(ah)the Borrower may make Restricted Payments in connection with the Warrant and/or Warrant Agreement (including in connection with the termination of the Warrant in accordance with its terms); and
(ai)so long as no Default or Event of Default has occurred and is continuing or would result therefrom, the Borrower may make additional Restricted Payments in an aggregate amount not to exceed $2,500,000.
Section 1.051Investments, Loans and Advances. The Borrower shall not and shall not permit any of its Subsidiaries to (i) purchase or acquire any Equity Interests, or any other securities of, any other Person, including the establishment or creation of a Subsidiary, or (ii) make any Acquisitions, or any other acquisition of all or substantially all of the assets of another Person, or of any business or division of any Person, including without limitation, by way of merger, consolidation or other combination or (iii) make or purchase any advance, loan, extension of credit or capital contribution to, or Guarantee in favor of, any other Person, including the Borrower or any of its Subsidiaries or Affiliates, in each case, to the extent constituting an “investment” under GAAP (the items described in clauses (i), (ii) and (iii) are referred to as “Investments”), except for:
(l)Investments (i) by a Credit Party in any other Credit Party, (ii) by any Subsidiary of the Borrower that is not a Guarantor in any other Subsidiary of the Borrower that is not a Guarantor or in any Credit Party and (iii) by any Credit Party in any Subsidiary of the Borrower that is not a Guarantor in an aggregate amount not to exceed $5,000,000 at any one time outstanding;
(m)Investments existing on the Effective Date and set forth on Schedule 9.05;
(n)Investments comprised of Debt permitted by Section 9.02 (other than Section 9.02(g));
(o)Investments in Swap Agreements permitted by Section 9.17;
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(p)Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by the Borrower Board and not to exceed $1,000,000 in the aggregate at any time outstanding;
(q)Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business;
(r)[reserved];
(s)(i) Investments in the ordinary course of business consisting of prepaid expenses and (ii) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;
(t)Investments consisting of extensions of credit to customers and suppliers who are not Affiliates in the nature of account receivables in the ordinary course of business arising from the sale or lease of goods, provision of services or licensing activities of property;
(u)Investments in cash and Cash Equivalents;
(v)Investments of any Person existing at the time such Person becomes a Subsidiary or consolidates or merges with the Borrower or any Subsidiary (including in connection with a Permitted Acquisition) so long as such Investments were not made in contemplation of such Person becoming a Subsidiary or of such consolidation, amalgamation or merger;
(w)Guarantees by the Borrower of the obligations of the Borrower or any Subsidiary of the Borrower of leases (other than Capital Leases) or of other obligations that do not constitute Debt, in each case entered into in the ordinary course of business and Guarantees permitted by Section 9.02;
(x)advances of payroll payments to employees in the ordinary course of business and Investments made pursuant to employment and severance arrangements of officers and employees in the ordinary course of business and transactions pursuant to stock option plans and employee benefit plans and arrangements in the ordinary course of business;
(y)Investments consisting of licensing or contribution of Intellectual Property pursuant to joint marketing arrangements with other Persons in the ordinary course of business;
(z)Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses of Intellectual Property in the ordinary course of business;
(aa)[reserved];
(ab)completion or performance guarantees incurred in the ordinary course of business or consistent with industry practice;
(ac)Permitted Acquisitions;
(ad)to the extent constituting Investments, Investments in connection with any entry, settlement, termination, unwind, or otherwise pursuant to the terms of any Permitted Convertible Note Hedging Arrangements;
(ae)Investments received as the non-cash portion of consideration received in connection with transactions permitted pursuant to Section 9.11;
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(af)Investments made by the Borrower and any of its Subsidiaries with the Net Cash Proceeds of any Asset Disposition or Insurance and Condemnation Event to the extent such proceeds are applied in accordance with Section 3.03(b)(ii) (to the extent required by such Section);
(ag)other Investments not exceeding $25,000,000 in the aggregate outstanding at any time; and
(ah)to the extent constituting Investments, transactions expressly permitted (other than by reference to this Section 9.05 (or any clause hereof)) under Sections 9.01, 9.02, 9.03, 9.04, 9.10 and 9.11.
Section 1.052Nature of Business. The Borrower shall not, and shall not permit any Subsidiary to, engage in any material line of business other than the businesses engaged in by the Borrower and its Subsidiaries on the Effective Date and similar or reasonably related, complementary or ancillary businesses thereto and extensions thereof.
Section 1.053Proceeds of Loans.
(aj)The Borrower shall not permit the proceeds of the Loans to be used for any purpose other than those permitted by Section 7.20.
(ak)The Borrower shall not use, and shall procure that its Subsidiaries and Affiliates, and their respective directors, officers, employees and, to the knowledge of the Borrower, agents shall not use, any part of the proceeds of any Borrowing, or use, lend, contribute or otherwise make available any such proceeds, to any Subsidiary, joint venture partner or any other Person, in each case, directly or indirectly (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any investments, activities, dealings business or transaction involving any Sanctioned Country or Sanctioned Person, or (iii) in any manner that would result in a violation by any Person (including any Person participating in the Borrowings, whether as Agent, Lender, sponsor, underwriter, advisor, investor, or otherwise) of any Anti-Corruption Laws, Anti-Terrorism Laws, Export-Import Control Laws or Sanctions. The Borrower will not request any Borrowing for the purposes set forth in the preceding sentence.
(al)The Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, fund all or part of any repayment of the Borrowings or other payments under this Agreement out of proceeds derived from criminal activity or activity or transactions in violation of any Anti-Corruption Laws, Anti-Terrorism Laws, Export-Import Control Laws or Sanctions, or that would otherwise cause any Person (including any Person participating in the Borrowings, whether as Agent, Lender, sponsor, underwriter, advisor, investor, or otherwise) to be in violation of any Anti-Corruption Laws, Anti-Terrorism Laws, Export-Import Control Laws or Sanctions.
Section 1.054ERISA Compliance. Unless not reasonably expected to have a Material Adverse Effect, the Borrower and the Subsidiaries will not at any time:
(a)engage in, or permit any ERISA Affiliate to engage in, any act, omission or transaction in connection with which the Borrower, any Subsidiary or any ERISA Affiliate could be subjected to either a civil penalty assessed pursuant to subsections (c), (i) or (l) of section 502 of ERISA or a tax imposed by Chapter 43 of Subtitle D of the Code.
(b)terminate, or permit any ERISA Affiliate to terminate, any Plan in a manner, or take any other action (or fail to take any action) with respect to any Plan, which would reasonably be expected to result in any liability of the Borrower, any Subsidiary or any ERISA Affiliate to the PBGC or otherwise.
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(c)fail to make, or permit any ERISA Affiliate to fail to make, full payment when due of all amounts which, under the provisions of any Plan, agreement relating thereto and/or applicable law, the Borrower, any Subsidiary or any ERISA Affiliate is required to pay as contributions thereto.
(d)permit to exist, or allow any ERISA Affiliate to permit to exist, any failure to satisfy the minimum funding standards under section 302, 303 or 304 of ERISA or section 412, 430 or 431 of the Code, whether or not waived, with respect to any Plan (other than a Multiemployer Plan).
(e)permit, or allow any ERISA Affiliate to permit, the actuarial present value of the benefit liabilities under any Plan (other than a Multiemployer Plan) to exceed the current fair market value of the assets (computed on a plan termination basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities. The term “actuarial present value of the benefit liabilities” shall have the meaning specified in section 4041 of ERISA.
(f)contribute to or assume or undertake an obligation to contribute to, or permit any ERISA Affiliate to contribute to or assume or undertake an obligation to contribute to, any Multiemployer Plan.
(g)acquire, or permit any ERISA Affiliate to acquire, an interest in any Person that causes such Person to become an ERISA Affiliate with respect to the Borrower or a Subsidiary or with respect to any ERISA Affiliate if such Person sponsors, maintains or contributes to (or has an obligation to contribute to), or at any time in the six-year period preceding such acquisition has sponsored, maintained, or contributed to (or had an obligation to contribute to), (i) any Multiemployer Plan, or (ii) any other Plan under which the actuarial present value of the benefit liabilities under such Plan exceeds the current fair market value of the assets (computed on a plan funding basis in accordance with Title IV of ERISA) of such Plan allocable to such benefit liabilities.
(h)incur, or permit any ERISA Affiliate to incur, any liability to or on account of a Plan under sections 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA.
(i)amend, or permit any ERISA Affiliate to amend, a Plan resulting in an increase in current liability such that the Borrower, a Subsidiary or any ERISA Affiliate is required to provide security to such Plan under the Code including under section 401(a)(29) or 436 of the Code.
Section 1.055[Reserved].
Section 1.10Mergers, Etc. Neither the Borrower nor any Subsidiary shall acquire merge into or with or consolidate with any other Person (except for Permitted Acquisitions), or sell, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its Property to any other Person (any such transaction, a “consolidation”); provided that (a) any Subsidiary may participate in a consolidation with the Borrower (provided that the Borrower shall be the continuing or surviving entity), (b) any Subsidiary of the Borrower may merge with, or dissolve or liquidate into, any other Subsidiary of the Borrower; provided that if any party to such transaction is a Guarantor the surviving Person must also be a Guarantor, (c) the liquidation or dissolution of any Subsidiary of the Borrower shall be permitted if the Borrower determines in good faith that such liquidation or dissolution is advisable or in the best interests of the Borrower, and (d) any Subsidiary of the Borrower may effect a consolidation to effect an Asset Disposition permitted pursuant to Section 9.11.
Section 1.11Sale of Properties. The Borrower shall not, and shall not permit any Subsidiary to, consummate any Asset Disposition, except for:
(a)Asset Dispositions of Inventory in the ordinary course of business;
(b)Asset Dispositions of worn-out, obsolete, damaged or unneeded property, that is, in the reasonable judgment of Borrower, no longer economically practicable to maintain or useful in the in the ordinary course of business of Borrower;
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(c)Asset Dispositions consisting of Permitted Liens, Investments permitted by Section 9.05, or Restricted Payments permitted under Section 9.04;
(d)transfers, assignments, licenses or other grants of rights for the use or exploitation of Property of Borrower or its Subsidiaries that would not result in a legal transfer of title of the applicable Property;
(e)Asset Dispositions not otherwise permitted pursuant to this Section 9.11; provided that (i) immediately prior to and immediately after giving effect to such Asset Disposition, no Default or Event of Default shall have occurred and be continuing, (ii) the Borrowers shall receive consideration that is not less than the Fair Market Value of the assets subject to such Asset Disposition, (iii) 75% of the consideration received therefor shall be in the form of cash and Cash Equivalents and (iv) such transaction shall not be with an Affiliate of any Borrower;
(f)the use, sale, exchange or other disposition of Cash or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents;
(g)Asset Dispositions which are required by court order or regulatory decree or otherwise required or compelled by regulatory authorities;
(h)Asset Dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset;
(i)(i) Asset Dispositions to, between or among the Borrower and the Guarantors; (ii) Asset Dispositions between or among any Subsidiary that is not a Guarantor and any other Subsidiaries that are not Guarantors; and (iii) Asset Dispositions from any Subsidiary that is not a Guarantor to the Borrower or any Guarantor;
(j)Asset Dispositions of tangible property to the extent that such property is exchanged for credit against the purchase price of similar replacement property;
(k)the assignment, abandonment, cancellation or other disposition of Intellectual Property that in the reasonable business judgment of Borrower, is not material to the business of Holdings, the Borrower and the Subsidiaries;
(l)the unwinding of any Swap Agreements;
(m)Asset Dispositions of Investments in joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements;
(n)Asset Dispositions or discounts without recourse of accounts receivable in connection with the compromise or collection thereof in the ordinary course of business (other than in connection with any financing transaction, except in connection with a transaction permitted pursuant to Section 9.02) and sales of assets received by the Borrower or any Subsidiary from Persons other than Credit Parties upon foreclosure on a Lien in favor of the Borrower or such Subsidiary;
(o)Asset Dispositions having a fair market value not to exceed $10,000,000 in the aggregate for any fiscal year;
(p)the Transactions and the Exchange Transactions; and
(q)the sale or issuance of Equity Interests (i) of any Subsidiary of the Borrower to the Borrower or any other Subsidiary of the Borrower (provided that in the case of such issuance of Equity Interests of a Subsidiary that is not a Wholly-Owned Subsidiary, Equity Interests of such
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Subsidiary may be also issued to other owners thereof to the extent such issuance is not dilutive to the ownership of the Credit Parties) or (ii) in order to qualify members of the board of directors or board of managers (or other similar governing body), as applicable, of any Subsidiary of the Borrower if required by any Governmental Requirement.
Section 1.2Transactions with Affiliates. The Borrower shall not, and shall not permit any Subsidiary to, enter into any transaction, including any purchase, sale, lease or exchange of Property or the rendering of any service, with any Affiliate other than:
(r)transactions solely among the Credit Parties and their respective Subsidiaries;
(s)transactions that are upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a Person that is not an Affiliate of the Borrower; provided that, with respect to any such transaction or series of related transactions involving aggregate payments or considerations in excess of $5,000,000, the Borrower shall deliver to the Administrative Agent a resolution adopted by the majority of the disinterested members of the Borrower Board approving such transition;
(t)(i) customary compensation, fees and indemnifications of directors, officers or employees in the ordinary course of business and (ii) the payment of reasonable out-of-pocket costs and expenses related to registration rights and indemnities provided to equityholders under any equityholder agreement;
(u)Restricted Payments permitted by Section 9.04, Investments permitted by Section 9.05 and Asset Dispositions permitted by Section 9.11; and
(v)issuances of Equity Interests of the Borrower (other than Disqualified Capital Stock);
(w)commercial transactions between or among the Borrower and/or one or more Credit Parties in the ordinary course of business and with any Person that becomes a Credit Party as a result of such transaction;
(x)the Transactions;
(y)transactions between the Borrower or any Subsidiary and any Person that is an Affiliate solely due to the fact that a director of such Person is also a director of the Borrower; provided, however, that such director abstains from voting as a director of the Borrower on any matter involving such other Person; and
(z)transactions involving aggregate payments of less than $1,000,000.
For the avoidance of doubt, this Section 9.12 shall not apply to reasonable employment, bonus, retention and severance arrangements with, and payments of compensation or benefits to or for the benefit of, current or former employees, consultants, officers or directors of the Borrower and its Subsidiaries.
Section 1.12[Reserved].
Section 1.13[Reserved].
Section 1.14Negative Pledge Agreements. The Borrower shall not, and shall not permit any Subsidiary to, create, incur, assume or suffer to exist any written contract or agreement that prohibits or restricts the granting, conveying, creation or imposition of any Lien on any of its Property in favor of the Administrative Agent and the Secured Parties or restricts any Subsidiary from paying dividends or making distributions to the Borrower or any Guarantor; provided, however, that the preceding restrictions shall not apply to encumbrances or restrictions arising under or by reason of (a) this Agreement or the
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other Loan Documents, (b) any leases or licenses or similar contracts as they affect any Property or Lien subject to a lease or license, (c) any written contract or agreement creating Liens permitted by Section 9.03 (but only to the extent related to the Property on which such Liens were created), (d) any restriction with respect to Borrower or its Subsidiaries imposed pursuant to an agreement entered into for the direct or indirect sale or disposition of all or substantially all the equity or Property of a Subsidiary (or the Property that is subject to such restriction) pending the closing of such sale or disposition, (e) applicable law, rule, regulation or order, (f) customary non-assignment provisions in contracts and leases entered into in the ordinary course of business, (g) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business, (h) restrictions contained in agreements with respect to Debt incurred by Subsidiaries that are not Credit Parties in accordance with this Agreement (provided that such restrictions are limited to the property or assets of such Subsidiary and its Subsidiaries), (i) restrictions by reason of customary provisions restricting assignments, subletting, sublicensing or other transfers contained in leases, licenses and similar agreements entered into in the ordinary course of business (provided that such restrictions are limited to the property or assets secured by such Liens, the property or assets subject to such leases, licenses or similar agreements, or restrict the assignment, subletting, sublicensing or other transfer of rights under the lease, license or similar agreement itself, as the case may be), (j) provisions limiting the Asset Disposition or distribution of assets or property in joint venture agreements, sale-leaseback agreements, stock sale agreements and other similar agreements, which limitation is applicable only to the assets that are the subject of such agreements, (k) any encumbrance or restriction in connection with an acquisition of property, so long as such encumbrance or restriction relates solely to the property so acquired and was not created in connection with or in anticipation of such acquisition, (l) restrictions imposed by customary provisions in partnership agreements, limited liability company organizational governance documents, joint venture agreements and other similar agreements that restrict the transfer of ownership interests in such partnership, limited liability company, joint venture or similar Person, (m) restrictions in any one or more agreements governing Debt entered into after the Effective Date that contain encumbrances and other restrictions that are, taken as a whole, in the good faith judgment of the Borrower, (i) no more restrictive in any material respect with respect to the Borrower or any Subsidiary than those encumbrances and other restrictions that are in effect on the Effective Date pursuant to agreements and instruments in effect on the Effective Date (including this Agreement), or (ii) no more disadvantageous in any material respect, taken as a whole, to the Lenders than the Loan Documents; and (n) restrictions that are binding on a Subsidiary of the Borrower at the time such Subsidiary first becomes a Subsidiary of the Borrower so long as such restrictions were not entered into in contemplation of such Person becoming such a Subsidiary.
Section 1.15Sale Leaseback Transactions. No Credit Party will, nor will it permit any Subsidiary to, enter into any Sale Leaseback Transaction.
Section 1.16Swap Agreements. The Borrower shall not, and shall not permit any Subsidiary to enter into any Swap Agreement, except Swap Agreements which are entered into by a Credit Party or a Subsidiary of a Credit Party not for speculative purposes, but to (a) hedge or mitigate risks to which such Credit Party or such Subsidiary has actual exposure, including currency exchange risks, or (b) effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of such Credit Party or such Subsidiary.
Section 1.17Minimum Liquidity. The Borrower shall not permit Available Liquidity to be less than $50,000,000 at any time.
Section 1.18Amendments to Organizational Documents. Without the prior written consent of the Majority Lenders, the Borrower shall not, and shall not permit any of the other Credit Parties to, alter, amend or modify in any manner materially adverse to the Lenders, its certificate of formation, limited liability company agreement, articles of incorporation, by-laws, or any other similar organizational document.
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Section 1.19Minimum Adjusted Cash EBITDA. The Credit Parties shall not permit Adjusted Cash EBITDA for any Test Period ending on or prior to the Test Period ending September 30, 2025 (commencing with the Test Period ending March 31, 2023) to be less than $1.00.
Section 1.20Secured Leverage Ratio. The Credit Parties shall not permit the Secured Leverage Ratio for any Test Period (commencing with the Test Period ending December 31, 2025) to be greater than 6.00 to 1.00.
Section 1.21Additional Negative Covenants. Borrower shall not, and shall not permit any of its Subsidiaries to:
(aa)adopt or otherwise become obligated to contribute to any employee benefit plan that is subject to Title IV of ERISA; or
(ab)take any action or fail to take an action if, as a result of such action or inaction, Borrower would fail to qualify as an “operating company” within the meaning of the DOL Regulations or otherwise comply with such other exception as may be available under such regulations to prevent the assets of Borrower from being treated as the assets of any employee benefit plan for purposes of the DOL Regulations.
Section 1.1Accounting Changes. Borrower shall not, and shall not permit any of its Subsidiaries to (a) make any significant change in its accounting policies or reporting practices, except as permitted by GAAP, or (b) make any change to its fiscal year.
Article X
EVENTS OF DEFAULT; REMEDIES
EVENTS OF DEFAULT; REMEDIES
Section 1.056Events of Default. One or more of the following events shall constitute an “Event of Default”:
(a)any Credit Party fails (i) to pay when and as required to be paid herein, any amount of principal of any Loan, including after maturity of the Loans, or (ii) to pay within three (3) Business Days after the same shall become due and payable, interest on any Loan, any fee or any other amount payable hereunder or pursuant to any other Loan Document; or
(b)any representation, warranty, or certification by or on behalf of any Credit Party or any of its Subsidiaries made or deemed made herein, in any other Loan Document, or which is contained in any certificate, document or financial or other statement by any such Person, or their respective Responsible Officers, furnished at any time under this Agreement, or in or under any other Loan Document, shall prove to have been incorrect in any material respect when made or deemed made (or in any respect if such representation, warranty, financial statement, statement, report or certificate is qualified as to materiality or Material Adverse Effect);
(c)(A) if Borrower or any other Credit Party fails or neglects to perform, keep or observe any term, provision, condition or covenant contained in Section 8.02(a), Section 8.16 or Article IX of this Agreement which is required to be performed, kept or observed by the Borrower or such Credit Party or (B) if the Borrower or any Credit Party fails or neglects to perform, keep or observe any other term, provision, condition or covenant in this Agreement or in any other Loan Document which is required to be performed, kept or observed by the Borrower or such Credit Party and such default shall continue unremedied for a period of fifteen (15) days after the earlier to occur of (i) the date upon which a Responsible Officer of any Credit Party becomes aware of such default and (ii) the date upon which written notice thereof is given to the Borrower by the Administrative Agent;
(d)any Credit Party or any Subsidiary of any Credit Party (i) fails to make any payment in respect of any Material Debt (other than the Secured Obligations or any intercompany Debt) when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) and
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such failure continues after the applicable grace or notice period, if any, specified in the document relating thereto on the date of such failure; or (ii) fails to perform or observe any other condition or covenant, or any other breach shall occur, under any agreement or instrument relating to any such Material Debt if the effect of such failure or breach is to cause, or to permit the holder or holders of such Material Debt or beneficiary or beneficiaries of such Material Debt (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause such Material Debt to be declared to be due and payable, redeemed, or repurchased, in each case prior to its stated maturity (without regard to any subordination terms with respect thereto); provided that this clause (d) shall not apply to secured Debt permitted hereunder that becomes due solely as a result of (x) an Insurance and Condemnation Event or (y) the applicable Credit Party’s voluntary sale or transfer of only the property securing such Debt, if such sale or transfer is expressly permitted hereunder and under the documents providing for such Debt to the extent that such Credit Party’s obligations with respect to such Debt are extinguished in full upon such sale or transfer;
(e)(i) any of the Borrower or any of its Subsidiaries (other than any Immaterial Subsidiary) shall commence any case, proceeding or other action (A) under any bankruptcy or debtor relief laws seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, receiver and manager, interim receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any of the Borrower or any of its Subsidiaries (other than any Immaterial Subsidiary) shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against any of the Borrower or any of its Subsidiaries (other than any Immaterial Subsidiary) any case, proceeding or other action of a nature referred to in clause (i) above that (x) results in the entry of an order for relief or any such adjudication or appointment or (y) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against any of the Borrower or any of its Subsidiaries (other than any Immaterial Subsidiary) any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) any of the Borrower or any of its Subsidiaries (other than any Immaterial Subsidiary) shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any of the Borrower or any of its Subsidiaries (other than any Immaterial Subsidiary) shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due;
(f)if any Change in Control shall occur;
(g)if any money judgment in an aggregate amount in excess of $12,500,000 (to the extent not paid or covered by insurance for which the relevant independent third-party insurer has not denied coverage thereof) shall be entered or filed against the Borrower or any of its Subsidiaries and the same shall remain unsatisfied, unvacated and unstayed pending appeal for a period of thirty (30) days after the entry thereof;
(h)this Agreement or any other material Loan Document shall for any reason fail or cease to be valid and binding on, or enforceable against, the any Credit Party or any Credit Party shall so assert; or
(i)any Security Instrument shall for any reason (other than pursuant to the terms thereof) cease to create a valid security interest in a material portion of the Collateral purported to be covered thereby or such security interest in a material portion of the Collateral shall for any reason (other than (i) as a result of any action by the Administrative Agent or any other Secured Party or the failure of the Administrative Agent or any other Secured Party to take any action, in each case, within its control or (ii) as a result of a disposition of the applicable Collateral in a transaction expressly permitted under the Loan Documents) cease to be a perfected (subject to the qualifications set forth in this Agreement and the other Loan Documents) and first priority security interest subject only to Permitted Liens (to the extent required under the Loan Documents).
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Section 1.057Remedies.
(a)In the case of an Event of Default other than ones described in Section 10.01(e)(i) or Section 10.01(e)(ii), at any time thereafter during the continuance of such Event of Default, the Administrative Agent shall, at the request of the Majority Lenders, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Notes and the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon, the Applicable Premium that would have been payable if the Loans were repaid pursuant to Sections 3.03(a) on the date of such acceleration without the occurrence of a Sale Transaction and all fees and other obligations of the Borrower and the Guarantors accrued hereunder and under the Notes and the other Loan Documents, shall become due and payable immediately, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice of any kind, all of which are hereby waived by the Borrower and each Guarantor; and in case of an Event of Default described in Section 10.01(e)(i) or Section 10.01(e)(ii), the Commitments shall automatically terminate and the Notes and the principal of the Loans then outstanding, together with accrued interest thereon, the Applicable Premium that would have been payable if the Loans were repaid pursuant to Section 3.03(a) on the date of such acceleration without the occurrence of a Sale Transaction and without giving effect to any exceptions contained in Section 3.03(d), and all fees and the other obligations of the Borrower and the Guarantors accrued hereunder and under the Notes and the other Loan Documents, shall automatically become due and payable, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice of any kind, all of which are hereby waived by the Borrower and each Guarantor.
(b)In the case of the occurrence of an Event of Default, the Administrative Agent and the Lenders will have all other rights and remedies available at law and equity.
(c)All proceeds realized from the liquidation or other disposition of Collateral or otherwise received after maturity of the Loans or the Notes, whether by acceleration or otherwise, shall be applied: first, to reimbursement of fees, expenses and indemnities provided for in this Agreement and the Security Instruments; second, to accrued interest on the Loans; third, to fees due and payable under any of the other Loan Documents; fourth, to any other Secured Obligations; and, any excess shall be paid to the Borrower or as otherwise required by any Governmental Requirement.
Article XI
THE AGENTS
THE AGENTS
Section 1.058Appointment; Powers. Each of the Lenders hereby irrevocably (subject to Section 11.06) appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof and the other Loan Documents, together with such actions and powers as are reasonably incidental thereto and the Administrative Agent hereby accepts such appointment. Each Lender and the Administrative Agent hereby appoint each other Lender as agent for the purpose of perfecting the Administrative Agent’s security interest in assets that, in accordance with the UCC, can be perfected by possession or control.
Section 1.059Duties and Obligations of Administrative Agent. The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent (a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing (the use of the term “agent” herein and in the other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law; rather, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties), (b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except as provided in Section 11.03, and (c) except as expressly set forth herein, shall not have any duty to disclose, and shall
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not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be deemed to have notice or knowledge of any Default or Event of Default unless and until the Administrative Agent shall have received written notice from the Borrower or a Lender referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice of default,” and shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or under any other Loan Document or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or in any other Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in Article VI or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to it or as to those conditions precedent specifically required to be to its satisfaction, (vi) the existence, value, perfection or priority of any collateral security or the financial or other condition of the Borrower and its Subsidiaries or any other obligor or guarantor, or (vii) any failure by the Borrower or any other Person (other than itself) to perform any of its obligations hereunder or under any other Loan Document or the performance or observance of any covenants, agreements or other terms or conditions set forth herein or therein. For purposes of determining compliance with the conditions specified in Article VI, each Lender shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received written notice from such Lender prior to the proposed closing date specifying its objection thereto. Notwithstanding anything herein to the contrary, the Administrative Agent (i) shall not have any liability arising from, or be responsible for any loss, cost or expense suffered on account of, any determination by the Administrative Agent that any Lender is a Defaulting Lender, or the effective date of such status, it being further understood and agreed that the Administrative Agent shall not have any obligation to determine whether any Lender is a Defaulting Lender, and (ii) shall not have any duty to ascertain, monitor or enforce compliance with the list of Disqualified Institutions and will not have any liability with respect to any assignment or participation made to a Disqualified Institution, it being further understood and agreed that the Administrative Agent will be authorized to disclose the list of Disqualified Institutions to the Lenders and the Lenders will be authorized to disclose such list, on a confidential basis, to potential assignees and participants.
Section 1.060Action by Administrative Agent. The Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by any other Loan Document that it is required to exercise in writing as directed by the Majority Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.02) and in all cases it shall be fully justified in failing or refusing to act hereunder or under any other Loan Documents unless it shall (a) receive written instructions from the Majority Lenders or the Lenders, as applicable, (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.02) specifying the action to be taken and (b) be indemnified to its satisfaction by the Lenders against any and all liability and expenses that may be incurred by it by reason of taking or continuing to take any such action, including any action to be taken pursuant to any Account Control Agreements and any landlord agreements or waivers. The instructions as aforesaid and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. If a Default has occurred and is continuing, then the Administrative Agent shall take such action with respect to such Default as shall be directed by the requisite Lenders in the written instructions (with indemnities) described in this Section 11.03, provided that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable in the best interests of the Lenders. In no event, however, shall the Administrative Agent be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement, the Loan Documents or applicable law. If a Default has occurred and is continuing, no Agent (other than the Administrative Agent) shall have any obligation to perform any act in respect thereof. No Agent shall be liable for any action taken or not taken by it hereunder or under any other Loan Document or under any other document or instrument
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referred to or provided for herein or therein or in connection herewith or therewith INCLUDING ITS OWN ORDINARY NEGLIGENCE, except for its gross negligence or willful misconduct (as finally determined in a non-appealable decision of a court of competent jurisdiction); provided that no action taken or not taken by an Agent with the consent or at the request of the Majority Lenders or the Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.02) shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section 11.03. No provision of this Agreement or any other Loan Document or any agreement or instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby shall require any Agent to: (i) expend or risk its own funds or provide indemnities in the performance of any of its duties hereunder or the exercise of any of its rights or power or (ii) otherwise incur any financial liability in the performance of its duties or the exercise of any of its rights or powers. Anything herein to the contrary notwithstanding, whenever reference is made in this Agreement or any other Loan Document to any action by, consent, designation, specification, requirement or approval of, notice, request or other communication from, or other direction given or action to be undertaken or to be (or not to be) suffered or omitted by the Agents or to any election, decision, opinion, acceptance, use of judgment, expression of satisfaction or other exercise of discretion, rights or remedies to be made (or not to be made) by the Agents hereunder or thereunder, it is understood that in all cases the Agents shall be acting, giving, withholding, suffering, omitting, taking or otherwise undertaking and exercising the same (or shall not be undertaking and exercising the same) as directed by the Majority Lenders or the Lenders, as applicable, (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 12.02). Beyond the exercise of reasonable care in the custody of the Collateral in the possession or control of an Agent, such Agent will not have any duty as to any other Collateral or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto. The Agents will be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property, and the Agents will not be liable or responsible for any loss or diminution in the value of any of the Collateral by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Administrative Agent in good faith. Notwithstanding anything to the contrary herein or in any other Loan Document, in the event the Administrative Agent is entitled or required to commence an action to foreclose or otherwise exercise its remedies to acquire control or possession of the Collateral, the Administrative Agent shall not be required to commence any such action or exercise any remedy or to inspect or conduct any studies of any property under the Mortgages or take any such other action if the Administrative Agent has determined that the Administrative Agent may incur personal liability as a result of the presence at, or release on or from, the Collateral or such property, of any Hazardous Materials. The Administrative Agent shall at any time be entitled to cease taking any action described in this clause if it no longer reasonably deems any indemnity, security or undertaking from the Borrower or the Lenders to be sufficient.
Section 1.061Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon and each of the Borrower and the Lenders hereby waives the right to dispute the Administrative Agent’s record of such statement, except in the case of gross negligence or willful misconduct by the Administrative Agent as determined by a final nonappealable order of a court of competent jurisdiction. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. The Administrative Agent may deem and treat the payee of any Note as the holder thereof for all purposes hereof unless and until a written notice of the assignment or transfer thereof permitted hereunder shall have been filed with the Administrative Agent.
Section 1.062Subagents. The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by it. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding
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Sections of this Article XI shall apply to any such sub-agent and to the Related Parties of each Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
Section 1.063Resignation or Removal of Administrative Agent. The Administrative Agent may resign as the Administrative Agent upon 30 days’ prior written notice to the Lenders and the Borrower. Upon any such resignation, the Majority Lenders shall have the right, in consultation with and upon the approval of the Borrower (so long as no Event of Default under Section 10.01(a) or (e) has occurred and is continuing), which approval shall not be unreasonably withheld, to appoint a successor. If no successor shall have been so appointed by the Majority Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a trust company or bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article XI and Section 12.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent. If no successor administrative agent has accepted appointment as the Administrative Agent by the date 30 days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the Majority Lenders shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Majority Lender appoint a successor administrative agent, as provided for above. The Majority Lenders may remove any Administrative Agent upon 30 days’ prior written notice to the Administrative Agent, the Lenders and the Borrower. Upon any such removal, the Majority Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which such successor shall be consented to by the Borrower (such consent by the Borrower not to be unreasonably withheld, and with consent by Borrower not required during the continuance of an Event of Default under Section 10.01(a) or (e)). Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the outgoing Administrative Agent, and the outgoing Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation or removal hereunder, the provisions of this Article XI and Section 12.03 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent. If no successor administrative agent has accepted appointment as the Administrative Agent by the date 30 days following the Majority Lenders’ notice of removal of the Administrative Agent, the Administrative Agent’s removal shall nevertheless thereupon become effective and the Majority Lenders shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Majority Lenders appoint a successor administrative agent, as provided for above.
Section 1.064Agents as Lenders. Each Person serving as an Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not an Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not an Agent hereunder.
Section 1.065No Reliance. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, any other Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and each other Loan Document to which it is a party. Each Lender also
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acknowledges that it will, independently and without reliance upon the Administrative Agent, any other Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document, any related agreement or any document furnished hereunder or thereunder. The Agents shall not be required to keep themselves informed as to the performance or observance by the Borrower or any of its Subsidiaries of this Agreement, the Loan Documents or any other document referred to or provided for herein or to inspect the Properties or books of the Borrower or its Subsidiaries. Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by the Administrative Agent hereunder, no Agent shall have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition or business of the Borrower (or any of its Affiliates) which may come into the possession of such Agent or any of its Affiliates.
Section 1.066Authority to Release Collateral and Liens. Each Lender hereby authorizes the Administrative Agent to (i) release any Collateral that is permitted to be sold or otherwise disposed of pursuant to the terms of the Loan Documents to a Person that is not a Credit Party, (ii) release any Guarantor from its Guarantee of the Secured Obligations if all of the Equity Interests of such Guarantor are sold or otherwise transferred to a Person or Persons none of which is (x) a Credit Party or (y) an Affiliate of a Credit Party, (iii) to the extent the property constituting such Collateral is owned by a Guarantor, release such Collateral upon the release of such Guarantor from its Guarantee of the Secured Obligations, and (iv) subordinate any Lien on any collateral granted to or held by the Administrative Agent under any Loan Document to any Lien permitted pursuant to the terms of this Agreement or the other Loan Documents or, if necessary to avoid a default or other adverse consequences under the agreements relating to such Lien permitted pursuant to this Agreement or the other Loan Documents, release any such Lien granted to or held by the Administrative Agent. Each Lender hereby authorizes the Administrative Agent to execute and deliver to the Borrower, at the Borrower’s sole cost and expense, any and all releases of Liens, termination statements, assignments or other documents reasonably requested by the Borrower in connection with any sale or other disposition of Property to the extent such sale or other disposition is permitted by the terms of Section 9.11 to a Person that is not a Credit Party or is otherwise authorized by the terms of the Loan Documents as certified in writing to the Administrative Agent by a Responsible Officer of the Borrower. Upon request by the Administrative Agent at any time, the Majority Lenders will confirm in writing the Administrative Agent’s authority to take any of the actions set forth in this Section 11.09.
Section 1.10The Agents. No Agent other than the Administrative Agent, shall have any duties, responsibilities or liabilities under this Agreement and the other Loan Documents other than their duties, responsibilities and liabilities in their capacity as Lenders hereunder, if applicable.
Section 1.11Filing of Proofs of Claim. In case of any Event of Default under Section 10.01(e)(i) or Section 10.01(e)(ii) the Administrative Agent (regardless of whether the principal of any Loan shall then be due and payable and regardless of whether the Administrative Agent has made any demand on the Borrower or any Guarantor) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(a)to (i) file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Secured Obligations that are owing and unpaid and (ii) file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Section 3.04 and Section 12.03) allowed in such judicial proceeding; and
(b)to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same.
Each Lender hereby authorizes any custodian, receiver, assignee, trustee, conservator, sequestrator or other similar official in any such judicial proceeding: (i) to make such payments to the Administrative
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Agent; and (ii) if the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Section 3.04 and Section 12.03. Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Secured Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding. Each Lender retains its right to file and prove a claim separately.
Section 11.12 Erroneous Payments.
(d)Each Lender hereby agrees that (i) if the Administrative Agent notifies any Lender that the Administrative Agent has determined in its sole discretion that any funds received by such Lender from the Administrative Agent were erroneously transmitted to, or otherwise erroneously or mistakenly received by, such Lender (whether or not known to such Lender) (whether as a payment, prepayment or repayment of principal, interest, fees or otherwise; individually and collectively, an “Erroneous Payment”) and demands the return of such Erroneous Payment (or a portion thereof), such Lender shall promptly, but in no event later than one Business Day thereafter, return to the Administrative Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day funds (in the currency so received) and (ii) to the extent permitted by applicable law, such Lender shall not assert any right or claim to the Erroneous Payment, and hereby waives any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand claim or counterclaim by the Administrative Agent for the return of any Erroneous Payments received, including without limitation a waiver of any defense based on “discharge for value” or any similar doctrine. A notice of the Administrative Agent to any Lender under this clause shall be conclusive absent manifest error.
(c)Without limiting immediately preceding clause, each Lender hereby further agrees that if it receives an Erroneous Payment from the Administrative Agent (x) that is in a different amount than, or on a different date from, that specified in a notice of payment sent by the Administrative Agent with respect to such Erroneous Payment (an “Erroneous Payment Notice”), (y) that was not preceded or accompanied by an Erroneous Payment Notice, or (z) that the Lender otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part), in each case, an error has been made (and that it is deemed to have knowledge of such error at the time of receipt of such Erroneous Payment) with respect to such Erroneous Payment, and to the extent permitted by applicable law, the Lender shall not assert any right or claim to the Erroneous Payment, and hereby waives, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Erroneous Payments received, including without limitation, waiver of any defense based on “discharge for value” or any similar doctrine. Each Lender agrees that, in each such case, it shall promptly (and, in all events, within one Business Day of its knowledge (or deemed knowledge) of such error) notify the Administrative Agent of such occurrence and, upon demand from the Administrative Agent, it shall promptly, but in all events no later than one Business Day thereafter, return to the Administrative Agent the amount of any such Erroneous Payment (or portion thereof) as to which such a demand was made in same day funds (in the currency so received).
Article XII
MISCELLANEOUS
MISCELLANEOUS
Section 1.067Notices.
(e)Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to Section 12.01(b)), all notices and other communications provided for herein shall be in writing and shall be (i) delivered by hand or overnight courier service, (ii) mailed by
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certified or registered mail, (iii) sent by facsimile or (iv) delivered by e-mail or other electronic communications (subject to Section 12.01(b)), as follows:
(i)if to the Borrower, to it at:
8x8, Inc.
675 Creekside Way
Campbell, CA 95008
Attention: Samuel Wilson
Telephone: (669) 263-9821
Telephone: (669) 263-9821
E-mail: samuel.wilson@8x8.com
with a copy to (which shall not constitute notice):
8x8, Inc.
675 Creekside Way
Campbell, CA 95008
E-mail: legal-notices@8x8.com
and
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071-3144
Attention: Leila Sayegh
Email: leila.sayegh@skadden.com
(ii)if to the Administrative Agent, to it at:
Wilmington Savings Fund Society, FSB, as Administrative Agent
WSFS Bank Center
500 Delaware Avenue, 11th Floor
Wilmington, DE 19801
Attention: Raye Goldsborough, Vice President
Telephone: 302-888-7580
E-mail: rgoldsborough@wsfsbank.com
with a copy (which shall not constitute notice) to:
Chapman and Cutler LLP
1270 Avenue of the Americas
New York, NY 10020
Attention: Bart Pisella
Telephone: 212-655-2525
Telephone: 212-655-2525
E-mail: bpisella@chapman.com
(iii)if to any other Lender, in its capacity as such, to it at its address (or facsimile number) set forth in its Administrative Questionnaire.
(a)Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II, Article III, Article IV and Article V unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
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(b)Any party hereto or to any other Loan Document may change its address or facsimile number (or other electronic transmission address) for notices and other communications hereunder by notice to the other parties hereto or thereto, as appropriate. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.
Section 1.068Waivers; Amendments.
(f)No failure on the part of any Agent or any Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege, or any abandonment or discontinuance of steps to enforce such right, power or privilege, under any of the Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any of the Loan Documents preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies of the Agents and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or any other Loan Document or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by Section 12.02(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of the Loans shall not be construed as a waiver of any Default, regardless of whether any Agent or any Lender may have had notice or knowledge of such Default at the time.
(g)Neither this Agreement nor any provision hereof nor any other Loan Document nor any provision thereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower, the Administrative Agent and the Majority Lenders; provided that no such agreement shall (i) increase the Commitment or the Maximum Credit Amount of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees or premium payable hereunder, or reduce any other Secured Obligations hereunder or under any other Loan Document, without the written consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any fees payable hereunder, or any other Secured Obligations hereunder or under any other Loan Document, or reduce the amount of, waive or excuse any such payment, or postpone or extend the Maturity Date without the written consent of each Lender affected thereby, (iv) change Section 4.01(b) or Section 4.01(c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) release any Guarantor (except as set forth herein or in any other Loan Document), release all or substantially all of the Collateral (other than as provided in Section 11.09) or, prior to an Event of Default pursuant to Section 10.01(e)(i) or Section 10.01(e)(ii), subordinate the Secured Obligations in right of payment or the Liens securing the Secured Obligations with respect to all or substantially all of the Collateral, without the written consent of each Lender, (vi) change any of the provisions of Section 10.02(c), this Section 12.02(b) or the definition of “Majority Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or under any other Loan Documents or make any determination or grant any consent hereunder or any other Loan Documents, without the written consent of each Lender, or (vii) change the description of the obligations secured or guaranteed by the Security Instruments or the priority of payments set forth in Section 10.02(c) without the written consent of each Lender adversely affected thereby; provided that the addition of a new secured obligation shall be deemed not to adversely affect any other secured party; provided further that (1) no such agreement shall amend, modify or otherwise affect the rights or duties of any Agent hereunder or under any other Loan Document without the prior written consent of such Agent, and (2) any amendment, waiver or modification of Section 9.18, Section 9.20 or Section 9.21 or any amendment, waiver or modification to the manner of computation of any financial ratio or Adjusted Cash EBITDA, in each case shall only require the consent of the Majority Lenders. Notwithstanding the foregoing, (A) the Borrower and the Administrative Agent may amend this Agreement or any other Loan Document without the consent of the Lenders in order to correct, amend or cure any ambiguity, inconsistency or defect or correct any typographical error or other manifest error in any Loan Document, and (B) the Administrative Agent and the Borrower (or other applicable Credit Party) may enter into any amendment, modification or waiver of this Agreement or any other Loan Document or enter into any agreement or instrument to effect the
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granting, perfection, protection, expansion or enhancement of any security interest in any Collateral or Property to become Collateral to secure the Secured Obligations for the benefit of the Lenders or as required by any Governmental Requirement to give effect to, protect or otherwise enhance the rights or benefits of any Lender under the Loan Documents without the consent of any Lender. This Agreement may be amended with the written consent of the Administrative Agent, the Borrower and the Majority Lenders to (i) add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the outstanding principal and accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Loans and the accrued interest and fees in respect thereof and (ii) include appropriately the Lenders holding such credit facilities in any determination of the Majority Lenders.
Section 1.069Expenses, Indemnity; Damage Waiver.
(a)The Borrower shall pay or reimburse (i) all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent and the Lenders (limited in the case of the reasonable and documented fees, charges and disbursements of counsel, to the reasonable and documented fees, charges and disbursements of one counsel for the Administrative Agent, one counsel for the Lenders, one additional local counsel in each applicable jurisdiction and reasonably necessary specialist counsel (and, in the case of an actual or perceived conflict of interest where the Administrative Agent or the Lenders affected by such conflict in good faith informs the Borrower of such conflict and thereafter retains its own counsel, of another firm of counsel for such affected Persons taken as a whole)) and the reasonable and documented out-of-pocket travel, photocopy, mailing, courier, telephone and other similar expenses, in each case in connection with the negotiation, documentation and administration (after the execution hereof and including advice of counsel to the Administrative Agent and the Lenders as to the rights and duties of the Administrative Agent and the Lenders with respect thereto) of this Agreement and the other Loan Documents and any amendments, modifications or waivers of or consents related to the provisions hereof or thereof, (ii) all reasonable and documented out-of-pocket costs, expenses, Taxes (other than Excluded Taxes), assessments and other charges incurred by any Agent or any Lender in connection with any filing, registration, recording or perfection of any security interest contemplated by this Agreement or any Security Instrument or any other document referred to therein, and (iii) all reasonable and documented out-of-pocket expenses incurred by any Agent or any Lender (limited in the case of the reasonable and documented fees, charges and disbursements of counsel, to the reasonable and documented fees, charges and disbursements of one counsel for the Administrative Agent, one counsel for the Lenders, one additional local counsel in each applicable jurisdiction and reasonably necessary specialist counsel (and, in the case of an actual or perceived conflict of interest where the Administrative Agent or the Lenders affected by such conflict in good faith informs the Borrower of such conflict and thereafter retains its own counsel, of another firm of counsel for such affected Persons taken as a whole)) in connection with the enforcement or protection of its rights in connection with this Agreement or any other Loan Document, including its rights under this Section 12.03, or in connection with the Loans made hereunder, including all such reasonable and documented out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.
(b)THE BORROWER SHALL INDEMNIFY THE AGENT AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE REASONABLE FEES, CHARGES AND DISBURSEMENTS OF ANY OUTSIDE COUNSEL FOR ANY INDEMNITEE (WHICH SHALL BE LIMITED TO ONE COUNSEL FOR THE ADMINISTRATIVE AGENT, ONE COUNSEL FOR ALL OTHER INDEMNITEES TAKEN AS A WHOLE, ONE ADDITIONAL LOCAL COUNSEL IN EACH APPLICABLE JURISDICTION AND REASONABLY NECESSARY SPECIALIST COUNSEL (AND, IN THE CASE OF AN ACTUAL OR PERCEIVED CONFLICT OF INTEREST WHERE THE ADMINISTRATIVE AGENT OR THE LENDERS AFFECTED BY SUCH CONFLICT IN GOOD FAITH INFORMS THE BORROWER OF SUCH CONFLICT AND THEREAFTER RETAINS ITS OWN COUNSEL, OF ANOTHER FIRM OF COUNSEL FOR SUCH AFFECTED INDEMNITEES TAKEN AS A WHOLE)), INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF
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THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT, (ii) THE FAILURE OF THE BORROWER OR ANY SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT, (iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT OF THE BORROWER OR ANY GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH, (iv) ANY LOAN OR THE USE OF THE PROCEEDS THEREFROM, (v) THE OPERATIONS OF THE BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES BY THE BORROWER AND ITS SUBSIDIARIES, (vi) ANY ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS, (vii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES, INCLUDING THE PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL OR TREATMENT OF HAZARDOUS MATERIALS ON ANY OF THEIR PROPERTIES, (viii) THE BREACH OR NON-COMPLIANCE BY THE BORROWER OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY, (ix) THE PAST OWNERSHIP BY THE BORROWER OR ANY SUBSIDIARY OF ANY OF THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (x) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF HAZARDOUS MATERIALS ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER OR ANY SUBSIDIARY OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES, (xi) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OF ITS SUBSIDIARIES, (xii) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiii) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM (X) THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE OR ITS RELATED PARTY, (Y) A CLAIM BROUGHT BY THE BORROWER OR ANY OTHER CREDIT PARTY AGAINST AN INDEMNITEE FOR A MATERIAL BREACH OF SUCH INDEMNITEE'S FUNDING OBLIGATIONS UNDER THIS AGREEMENT OR (Z) ANY DISPUTE SOLELY AMONG INDEMNITEES, OTHER THAN ANY CLAIMS AGAINST THE ADMINISTRATIVE AGENT OR ANY OTHER PERSON IN ITS REPRESENTATIVE CAPACITY AS, OR FULFILING ITS ROLE AS, AN AGENT, ARRANGER OR SIMILAR ROLE UNDER THE LOAN DOCUMENTS. THIS SECTION 12.03(b) SHALL NOT APPLY WITH RESPECT TO TAXES OTHER THAN ANY TAXES THAT REPRESENT LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARISING FROM ANY NON-TAX CLAIM.
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(c)To the extent that the Borrower fails to timely pay any amount required to be paid by it to any Agent under Section 12.03(a) or (b), each Lender severally agrees to pay to such Agent such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on such Lender’s share of the outstanding aggregate principal amount of the Loans at such time) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against such Agent in its capacity as such.
(d)To the extent permitted by applicable law, no party hereto shall assert, and each party hereto hereby waives, any claim against any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or the use of the proceeds thereof; provided that, nothing in this clause (d) shall relieve the Borrower of any obligation it may have to indemnify an Indemnitee against special, indirect, consequential or punitive damages asserted against such Indemnitee by a third party.
(e)All amounts due under this Section 12.03 shall be payable promptly after written demand therefor.
Section 1.070Successors and Assigns.
(h)The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) the Borrower may not assign nor otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section 12.04. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in Section 12.04(c)) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and each Lender) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(i)
(i)Subject to the conditions set forth in Section 12.04(b)(iii), any Lender may assign to one or more assignees (unless an Event of Default under Section 10.01(a) or (e) has occurred and is continuing, other than to any Defaulting Lender or Disqualified Institution) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld, conditioned or delayed) of: (A) the Borrower, provided that (x) no consent of the Borrower shall be required (I) for an assignment to a Lender, an Affiliate of a Lender, or an Approved Fund, or (II) if an Event of Default under Section 10.01(a) or (e) has occurred and is continuing, any other assignee and (y) the Borrower shall be deemed to have consented to any such assignment (other than any assignment to a Defaulting Lender or Disqualified Institution) unless the Borrower shall have objected thereto by written notice to the Administrative Agent within five (5) Business Days after having received notice thereof and (B) the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed); provided that no such consent shall be required for an assignment to an assignee that is a Lender immediately prior to giving effect to such assignment or any assignment to an Affiliate of a Lender or an Approved Fund.
(ii)Assignments shall be subject to the following additional conditions: (A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment, the amount of the Commitment of the assigning Lender subject to each such assignment (determined as of
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the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000 unless the Borrower otherwise consents, provided that no such consent of the Borrower shall be required if an Event of Default under Section 10.01(a) or (e) has occurred and is continuing; (B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement; (C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee payable to the Administrative Agent by the assigning Lender of $3,500 (which fee shall not be payable in the case of an assignment permitted hereunder to a Lender an Affiliate of a Lender or an Approved Fund); (D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and all documentation and other information requested by the Administrative Agent or the Lenders to support compliance under Sanctions and Anti-Terrorism Laws, including that required by applicable regulatory authorities required under applicable “know your customer” rules and regulations, including the USA PATRIOT Act, and shall deliver notice of the Assignment and Assumption to the Borrower; and (E) in no event may any Lender assign all or a portion of its rights and obligations under this Agreement to the Borrower, any Affiliate of the Borrower, any natural person, any Defaulting Lender, any Disqualified Institution or any Person who upon becoming a Lender hereunder, would constitute any of the foregoing Persons.
(iii)Subject to Section 12.04(b)(iv) and the acceptance and recording thereof, from and after the date the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register pursuant to subsection (v) below the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement, other than any obligations that would survive the termination of this agreement, including those under Article XI and Section 12.11 (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 5.01, Section 5.03 and Section 12.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 12.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 12.04(c) (other than any such assignment or transfer to a Defaulting Lender or Disqualified Institution which shall be void, unless an Event of Default under Section 10.01(a) or (e) has occurred and is continuing).
(iv)The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and principal amount (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable written prior notice. In connection with any changes to the Register, if necessary, the Administrative Agent will reflect the revisions on Annex I and forward a copy of such revised Annex I to the Borrower and each Lender.
(v)Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), all documentation and other information reasonably requested by the Administrative Agent or the Lenders to support compliance under Sanctions and Anti-Terrorism Laws, including that required by applicable regulatory authorities required under applicable “know your customer” rules and regulations,
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including the USA PATRIOT Act, the processing and recordation fee referred to in Section 12.04(b) and any written consent to such assignment required by Section 12.04(b), the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this Section 12.04(b).
(c)Any Lender may sell participations to one or more banks or other Persons (other than the Borrower, any Affiliate of the Borrower, any Defaulting Lender, any Disqualified Institution (unless an Event of Default under Section 10.01(a) or (e) has occurred and is continuing) or any natural person) (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (1) such Lender’s obligations under this Agreement shall remain unchanged, (2) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (3) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 5.03(d) with respect to any payments made by such Lender to its Participant(s). Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the proviso to Section 12.02 that affects such Participant. Subject to Section 12.04(c), the Borrower agrees that each Participant shall be entitled to the benefits of Section 5.01, and Section 5.03 (subject to the requirements under Section 5.03(f), it being understood that the documentation required under Section 5.03(f) shall be delivered to the participating Lender) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 12.04(b); provided that such Participant shall not be entitled to receive any greater payment under Section 5.01 or Section 5.03, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 12.08 as though it were a Lender, provided such Participant agrees to be subject to Section 4.01(c) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Treasury Regulations Section 5f.103-1(c), proposed Treasury Regulation Section 1.163-5 or any applicable temporary, final or other successor regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(d)A Participant shall not be entitled to receive any greater payment under Section 5.01 or Section 5.03 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent or to the extent such entitlement to receive a greater payment under Section 5.01 or Section 5.03 results from a Change in Law that occurs after the Participant acquired the applicable participation.
(e)Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including, without limitation, any pledge or assignment to secure obligations to a Federal Reserve Bank or other central bank
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having jurisdiction over such Lender, and this Section 12.04 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest, or the exercise of any remedy in connection therewith, shall (i) release a Lender from any of its obligations hereunder, (ii) substitute any such pledgee or assignee for such Lender as a party hereto, or (iii) waive any of the requirements as to a permitted assignee contained in Section 12.04(b).
Section 1.071Survival; Revival; Reinstatement.
(j)All covenants, agreements, representations and warranties made by Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, any other Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated. The provisions of Section 5.01, Section 5.03, Section 12.03 and Section 12.11 and Article XI shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement, any other Loan Document or any provision hereof or thereof.
(k)To the extent that any payments on the Secured Obligations or proceeds of any collateral are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver or other Person under any bankruptcy law, common law or equitable cause, then to such extent, the Secured Obligations so satisfied shall be revived and continue as if such payment or proceeds had not been received and the Administrative Agent’s, and the Lenders’ Liens, security interests, rights, powers and remedies under this Agreement and each Loan Document shall continue in full force and effect. In such event, each Loan Document shall be automatically reinstated and the Borrower shall take such action as may be reasonably requested by the Administrative Agent or the Lenders to effect such reinstatement.
Section 1.072Counterparts; Integration; Effectiveness.
(g)This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.
(h)THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ANY FEE LETTER WITH RESPECT TO FEES PAYABLE TO THE ADMINISTRATIVE AGENT CONSTITUTE THE ENTIRE CONTRACT AMONG THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY AND ALL PREVIOUS AGREEMENTS AND UNDERSTANDINGS, ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
(i)Except as provided in Section 6.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic transmission (e.g., .pdf) shall be effective as delivery of a manually executed counterpart of this Agreement.
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(j)The words “execution”, “signed” and “signature” and words of like import in this Agreement, the other Loan Documents or in any other certificate, agreement or document related to this Agreement (to the extent not prohibited under governing documents) shall include images of manually executed signatures transmitted by facsimile or other electronic format (including “pdf”, “tif” or “jpg”) and other electronic signatures (including DocuSign and AdobeSign). The use of electronic signatures and electronic records (including any contract or other record created, generated, sent, communicated, received or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the full extent permitted by applicable Law, including the Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable Law, including any state Law based on the Uniform Electronic Transactions Act or the UCC (collectively, “Signature Laws”). Each party hereto and thereto shall be entitled to conclusively rely upon, and shall have no liability with respect to, any faxed, scanned, or photocopied manual signature, or other electronic signature, of any party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof. The party using digital signatures and electronic methods agrees to assume all risks arising out of the use of using digital signatures and electronic methods to submit communications and/or documents to Agents, including without limitation the risk of Agents acting on unauthorized instructions, and the risk of interception and misuse by third parties. For avoidance of doubt, original manual signatures shall be used for execution or indorsement of writings when required under the UCC or other applicable Signature Laws due to the character or intended character of the writings.
Section 1.073Severability. Any provision of this Agreement or any other Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof or thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 1.074Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held (other than in Excluded Accounts described in clause (b) of the definition thereof) and other obligations (of whatsoever kind, including obligations under Swap Agreements) at any time owing by such Lender to or for the credit or the account of the Borrower or any other Credit Party against any of and all the obligations of the Borrower or any other Credit Party owed to such Lender now or hereafter existing under this Agreement or any other Loan Document, irrespective of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although such obligations may be unmatured. The rights of each Lender under this Section 12.08 are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.
Section 1.075Governing Law; Jurisdiction; Consent to Service of Process.
(l)This Agreement and the Notes shall be governed by, and construed in accordance with, the laws of the State of NEW YORK.
(m)ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS SHALL BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM OBTAINING JURISDICTION OVER ANOTHER PARTY IN ANY COURT OTHERWISE HAVING JURISDICTION.
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(n)EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY PERSONAL SERVICE WITHIN OR OUTSIDE THE STATE OF NEW YORK. NOTHING HEREIN SHALL AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION.
(o)EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; PROVIDED THAT NOTHING CONTAINED IN THIS SECTION 12.09(d)(ii) SHALL LIMIT THE BORROWER’S INDEMNIFICATION OBLIGATIONS TO THE EXTENT SET FORTH IN SECTION 12.03 TO THE EXTENT SUCH SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES ARE INCLUDED IN ANY THIRD PARTY CLAIM IN CONNECTION WITH WHICH SUCH INDEMNITEE IS OTHERWISE ENTITLED TO INDEMNIFICATION HEREUNDER; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iv) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.09.
Section 1.10Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
Section 1.11Confidentiality. Each of the Agents and each Lender agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees, limited partners, investors, prospective investors and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority or self-regulatory body, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; provided however that the Borrower shall, to the extent permitted by applicable law, be given prior written notice thereof, (d) to any other party to this Agreement or any other Loan Document, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) to any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, subject to an agreement containing provisions substantially the same as those of this Section 12.11 (it being understood that no such disclosure may be made to any Disqualified Institution, unless an Event of Default under Section 10.01(a) or (e) has occurred and is continuing), (g) [reserved], (h) with the consent of any Credit Party or (i) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 12.11 or (ii) becomes available to any Agent or any Lender on a nonconfidential basis from a source other than a Credit Party not known by them to be subject to disclosure restrictions. For the purposes of this Section 12.11, “Information” means all information received from a Credit Party relating to any Credit Party and its business, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by any Credit Party and other than information pertaining to this Agreement routinely provided by arrangers to data service
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providers, including league table providers, that serve the lending industry so long as such confidential information is aggregated and anonymized prior to distribution unless otherwise agreed to in writing by Borrower. Any Person required to maintain the confidentiality of Information as provided in this Section 12.11 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. This Section 12.11 shall survive the termination of this Agreement.
Section 1.12Interest Rate Limitation. It is the intention of the parties hereto that each Lender shall conform strictly to usury laws applicable to it. Accordingly, if the transactions contemplated hereby would be usurious as to any Lender under laws applicable to it (including the laws of the United States of America and the State of New York or any other jurisdiction whose laws may be mandatorily applicable to such Lender notwithstanding the other provisions of this Agreement), then, in that event, notwithstanding anything to the contrary in any of the Loan Documents or any agreement entered into in connection with or as security for the Loans, it is agreed as follows: (i) the aggregate of all consideration which constitutes interest under law applicable to any Lender that is contracted for, taken, reserved, charged or received by such Lender under any of the Loan Documents or agreements or otherwise in connection with the Loans shall under no circumstances exceed the maximum amount allowed by such applicable law, and any excess shall be canceled automatically and if theretofore paid shall be credited by such Lender on the principal amount of the Secured Obligations (or, to the extent that the principal amount of the Secured Obligations shall have been or would thereby be paid in full, refunded by such Lender to the Borrower); and (ii) in the event that the maturity of the Loans is accelerated by reason of an election of the holder thereof resulting from any Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to any Lender may never include more than the maximum amount allowed by such applicable law, and excess interest, if any, provided for in this Agreement or otherwise shall be canceled automatically by such Lender as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited by such Lender on the principal amount of the Secured Obligations (or, to the extent that the principal amount of the Secured Obligations shall have been or would thereby be paid in full, refunded by such Lender to the Borrower). All sums paid or agreed to be paid to any Lender for the use, forbearance or detention of sums due hereunder shall, to the extent permitted by law applicable to such Lender, be amortized, prorated, allocated and spread throughout the stated term of the Loans evidenced by the Notes until payment in full so that the rate or amount of interest on account of any Loans hereunder does not exceed the maximum amount allowed by such applicable law. If at any time and from time to time (i) the amount of interest payable to any Lender on any date shall be computed at the Highest Lawful Rate applicable to such Lender pursuant to this Section 12.12 and (ii) in respect of any subsequent interest computation period the amount of interest otherwise payable to such Lender would be less than the amount of interest payable to such Lender computed at the Highest Lawful Rate applicable to such Lender, then the amount of interest payable to such Lender in respect of such subsequent interest computation period shall continue to be computed at the Highest Lawful Rate applicable to such Lender until the total amount of interest payable to such Lender shall equal the total amount of interest that would have been payable to such Lender if the total amount of interest had been computed without giving effect to this Section 12.12.
Section 1.13Exculpation Provisions. THE BORROWER SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS AND CONDITIONS OF THIS AGREEMENT; THAT IT HAS RECEIVED THE ADVICE OF ITS ATTORNEYS (WHICH MAY BE IN-HOUSE COUNSEL) IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY RESULT, SUBJECT TO THE TERMS HEREOF AND THEREOF AND APPLICABLE LAW, IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. THE BORROWER AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR
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ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE BASIS THAT IT HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”
Section 1.14No Third Party Beneficiaries. This Agreement, the other Loan Documents, and the agreement of the Lenders to make Loans hereunder are solely for the benefit of the Borrower, and no other Person (including any Subsidiary of the Borrower, any obligor, contractor, subcontractor, supplier or materialsman) shall have any rights, claims, remedies or privileges hereunder or under any other Loan Document against the Administrative Agent, any other Agent or any Lender for any reason whatsoever. Except as provided in Section 12.03(b), there are no third party beneficiaries.
Section 1.15US Patriot Act Notice. Each Lender and the Administrative Agent hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender and the Administrative Agent to identify the Borrower in accordance with the Patriot Act.
Section 1.16Marketing Consent. With the prior written consent of the Borrower, the Borrower hereby authorizes Administrative Agent and its affiliates (collectively, the “Agent Parties”), at their respective sole expense, to include the Borrower’s name and logo in advertising slicks posted on its internet site, in pitchbooks or sent in mailings to prospective customers, in each case after the Effective Date. Any authorization by Borrower with respect to the foregoing shall remain in effect unless the Borrower notifies Administrative Agent in writing that such authorization is revoked.
Section 1.17Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and
(b) the effects of any Bail-in Action on any such liability, including, if applicable:
(i) a reduction in full or in part or cancellation of any such liability;
(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of the applicable Resolution Authority.
Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
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Section 1.18No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that: (a) (i) no fiduciary, advisory or agency relationship between the Borrower and its Subsidiaries and the Administrative Agent or any Lender is intended to be or has been created in respect of the transactions contemplated hereby or by the other Loan Documents, irrespective of whether the Administrative Agent or any Lender has advised or is advising the Borrower or any Subsidiary on other matters; (ii) the arranging and other services regarding this Agreement provided by the Administrative Agent and the Lenders are arm’s-length commercial transactions between the Borrower and its Subsidiaries, on the one hand, and the Administrative Agent and the Lenders, on the other hand; (iii) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent that it has deemed appropriate; and (iv) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; and (b) (i) the Administrative Agent and the Lenders each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Subsidiaries, or any other Person; (ii) neither the Administrative Agent nor the Lenders has any obligation to the Borrower or any of its Subsidiaries with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent and the Lenders and their respective Affiliates may be engaged, for their own accounts or the accounts of customers, in a broad range of transactions that involve interests that differ from those of the Borrower and its Subsidiaries, and neither the Administrative Agent nor the Lenders has any obligation to disclose any of such interests to the Borrower or its Subsidiaries. To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against the Administrative Agent and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.
Article XIII
LOAN GUARANTY
LOAN GUARANTY
Section 1.076Guaranty. Each Guarantor, if any, hereby agrees that it is jointly and severally liable for, and, as primary obligor and not merely as surety, and absolutely and unconditionally guarantees to the Secured Parties the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Secured Obligations. Each Guarantor further agrees that its Secured Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal.
Section 1.077Guaranty of Payment. This Loan Guaranty is a guaranty of payment and not of collection. Each Guarantor waives any right to require Administrative Agent or any Lender to sue Borrower, any Guarantor, any other guarantor, or any other Person obligated for all or any part of the Secured Obligations (with respect to any Secured Obligations, each an "Obligated Party"), to enforce its payment against any collateral securing all or any part of the Secured Obligations and waives the benefits of division and discussion.
Section 1.078No Discharge or Diminishment of Loan Guaranty.
(f)Except as otherwise provided for herein, the obligations of each Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason, including: (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Secured Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of the Borrower or any other guarantor of or other Person liable for any of the Secured Obligations; (iii) any insolvency, bankruptcy, arrangement, winding up reorganization or other similar proceeding affecting any Obligated Party, or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights which any Guarantor may have at any time against any Obligated Party, Administrative Agent, any Lender, or any other Person, whether in connection herewith or in any unrelated transactions.
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(g)The obligations of each Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or unenforceability of any of the Secured Obligations or otherwise, or any provision of applicable Governmental Requirement purporting to prohibit payment by any Obligated Party, of the Secured Obligations or any part thereof.
(h)Further, the obligations of any Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of Administrative Agent or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Secured Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Secured Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct security for the obligations of Borrower for all or any part of the Secured Obligations or any obligations of any other guarantor of or other Person liable for any of the Secured Obligations; (iv) any action or failure to act by Administrative Agent or any Lender with respect to any collateral securing any part of the Secured Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Secured Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Guarantor or that would otherwise operate as a discharge of any Guarantor as a matter of law or equity.
Section 1.079Defenses Waived. To the fullest extent permitted by applicable law, each Guarantor hereby waives any defense based on or arising out of any defense of Borrower or any Guarantor or the unenforceability of all or any part of the Secured Obligations from any cause, or the cessation from any cause of the liability of Borrower or any Guarantor. Without limiting the generality of the foregoing, each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any Obligated Party, or any other Person. Administrative Agent may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Secured Obligations, compromise or adjust any part of the Secured Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the liability of such Guarantor under this Loan Guaranty except to the extent the Secured Obligations have been fully and indefeasibly paid in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Guarantor against any Obligated Party or any security.
Section 1.080Rights of Subrogation. No Guarantor will assert any right, claim or cause of action, including a claim of subrogation, contribution or indemnification that it has against any Obligated Party, or any collateral, until the Credit Parties have fully performed all their obligations (other than unasserted indemnification and expense claims) to Administrative Agent and Lenders, including the final payment in full in cash of the Secured Obligations and termination of the Commitments.
Section 1.081Reinstatement; Stay of Acceleration. If at any time any payment of any portion of the Secured Obligations is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, arrangement or reorganization of Borrower, each Guarantor's obligations under this Loan Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made. If acceleration of the time for payment of any of the Secured Obligations is stayed upon the insolvency, bankruptcy, arrangement or reorganization of Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Secured Obligations shall nonetheless be payable by the Guarantors forthwith on demand by Administrative Agent or the Lenders.
Section 1.082Information. Each Guarantor assumes all responsibility for being and keeping itself informed of Borrower's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Secured Obligations and the nature, scope and extent of the risks that each Guarantor assumes and incurs under this Loan Guaranty, and agrees that none of Administrative Agent or
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any Lender shall have any duty to advise any Guarantor of information known to it regarding those circumstances or risks.
Section 1.083Maximum Liability. The provisions of this Loan Guaranty are severable, and in any action or proceeding involving any state, federal or bankruptcy, insolvency, arrangement, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under this Loan Guaranty would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Guarantor's liability under this Loan Guaranty, then, notwithstanding any other provision of this Loan Guaranty to the contrary, the amount of such liability shall, without any further action by the Guarantors or the Secured Parties, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being the relevant Guarantor's "Maximum Liability"). This Section 13.08 with respect to the Maximum Liability of each Guarantor is intended solely to preserve the rights of the Secured Parties to the maximum extent not subject to avoidance under applicable law, and no Guarantor nor any other Person or entity shall have any right or claim under this Section 13.08 with respect to such Maximum Liability, except to the extent necessary so that the obligations of any Guarantor hereunder shall not be rendered voidable under applicable law. Each Guarantor agrees that the Secured Obligations may at any time and from time to time exceed the Maximum Liability of each Guarantor without impairing this Loan Guaranty or affecting the rights and remedies of the applicable Secured Parties hereunder, provided, that nothing in this sentence shall be construed to increase any Guarantor's obligations hereunder beyond its Maximum Liability. Notwithstanding the foregoing, nothing contained in this Agreement (including any provisions of this Article XIII to the contrary) shall limit the liability of Borrower in respect of all of the Secured Obligations under the Loan Documents.
Section 1.084Contribution. In the event any Guarantor (a "Paying Guarantor") shall make any payment or payments under this Loan Guaranty in respect of the Secured Obligations or shall suffer any loss as a result of any realization upon any collateral granted by it to secure its obligations under this Loan Guaranty, each other Guarantor (each a "Non-Paying Guarantor") shall contribute to such Paying Guarantor an amount equal to such Non-Paying Guarantor's "Guarantor Percentage" of such payment or payments made, or losses suffered, by such Paying Guarantor. For purposes of this Article XIII, each Non-Paying Guarantor's "Guarantor Percentage" with respect to any such payment or loss by a Paying Guarantor shall be determined as of the date on which such payment or loss was made by reference to the ratio of (i) such Non-Paying Guarantor's Maximum Liability as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder) or, if such Non-Paying Guarantor's Maximum Liability has not been determined, the aggregate amount of all monies received by such Non-Paying Guarantor from Borrower after the date hereof (whether by loan, capital infusion or by other means) to (ii) the aggregate Maximum Liability of all Guarantors hereunder (including such Paying Guarantor) as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder), or to the extent that a Maximum Liability has not been determined for any Guarantor, the aggregate amount of all monies received by such Guarantors from Borrower after the date hereof (whether by loan, capital infusion or by other means). Nothing in this provision shall affect any Guarantor's several liability for the entire amount of the Secured Obligations (up to such Guarantor's Maximum Liability). This provision is for the benefit of the Administrative Agent, the Lenders, the Borrower and the other Credit Parties and may be enforced by any one, or more, or all of them in accordance with the terms hereof.
Section 1.10Liability Cumulative. The liability of each applicable Credit Party as a Guarantor under this Article XIII is in addition to and shall be cumulative with all liabilities of each such Credit Party to Administrative Agent and Lenders under this Agreement and the other Loan Documents to which such Credit Party is a party or in respect of any obligations or liabilities of the other Credit Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written.
BORROWER:
8X8, INC.,
a Delaware corporation
a Delaware corporation
By: /s/ Samuel Wilson
Name: Samuel Wilson
Title: Chief Financial Officer
Name: Samuel Wilson
Title: Chief Financial Officer
GUARANTORS:
FUZE, INC.,
a Delaware corporation
a Delaware corporation
By: /s/ Samuel Wilson
Name: Samuel Wilson
Title: Treasurer
Name: Samuel Wilson
Title: Treasurer
8X8 INTERNATIONAL HOLDING CO.,
a Delaware corporation
a Delaware corporation
By: /s/ Samuel Wilson
Name: Samuel Wilson
Title: Chief Financial Officer
Name: Samuel Wilson
Title: Chief Financial Officer
EGHT – Term Loan Credit Agreement
ADMINISTRATIVE AGENT:
WILMINGTON SAVINGS FUND SOCIETY, FSB, as Administrative Agent
By: /s/ Raye Goldsborough
Name: Raye Goldsborough
Title: Vice President
Name: Raye Goldsborough
Title: Vice President
EGHT – Term Loan Credit Agreement
LENDERS:
FP Credit Partners II AIV, L.P., as a Lender
By: FP Credit Partners GP II, L.P., its General Partner
By: FP Credit Partners GP II Management, LLC, its General Partner
By: /s/ Scott Eisenberg
Name: Scott Eisenberg
Title: Managing Director
Name: Scott Eisenberg
Title: Managing Director
FP Credit Partners Phoenix II AIV, L.P., as a Lender
By: FP Credit Partners GP II, L.P., its General Partner
By: FP Credit Partners GP II Management, LLC, its General Partner
By: /s/ Scott Eisenberg
Name: Scott Eisenberg
Title: Managing Director
Name: Scott Eisenberg
Title: Managing Director
FP Credit Partners AIV, L.P., as a Lender
By: FP Credit Partners GP, L.P., its General Partner
By: FP Credit Partners GP Management, LLC, its General Partner
By: /s/ Scott Eisenberg
Name: Scott Eisenberg
Title: Managing Director
Name: Scott Eisenberg
Title: Managing Director
FP Credit Partners Phoenix AIV, L.P., as a Lender
By: FP Credit Partners GP, L.P., its General Partner
By: FP Credit Partners GP Management, LLC, its General Partner
EGHT – Term Loan Credit Agreement
By: /s/ Scott Eisenberg
Name: Scott Eisenberg
Title: Managing Director
Name: Scott Eisenberg
Title: Managing Director
EGHT – Term Loan Credit Agreement
ANNEX I
MAXIMUM CREDIT AMOUNT
MAXIMUM CREDIT AMOUNT
| Name of Lender | Effective Date Commitment Amount | Maximum Credit Amount | ||||||
| FP Credit Partners AIV II, L.P. | $190,741,573.03 | $190,741,573.03 | ||||||
| FP Credit Partners Phoenix AIV II, L.P. | $9,258,426.97 | $9,258,426.97 | ||||||
| FP Credit Partners AIV, L.P. | $41,547,835.14 | $41,547,835.14 | ||||||
| FP Credit Partners Phoenix AIV, L.P. | $8,452,164.86 | $8,452,164.86 | ||||||
| Total: | $250,000,000 | $250,000,000 | ||||||
Annex I to Term Loan Credit Agreement
876672.08-LACSR02A - MSW
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES.
WARRANT TO PURCHASE COMMON STOCK
Company: 8x8, Inc., a Delaware corporation
Number of Shares of Common Stock: [●]
Warrant Price: $7.15] per Share, subject to adjustment
Issue Date: August 3, 2022
Expiration Date: August 3, 2027
See also Section 4.1(b).
Credit Facility: This Warrant to Purchase Common Stock (“Warrant”) is issued in connection with that certain Term Loan Credit Agreement dated as of the Issue Date by and among the Company, each of the Lenders from time to time party thereto and Wilmington Savings Fund Society, FSB, as Administrative Agent (as the same may from time to time be amended, modified, supplemented or restated, the “Loan Agreement”).
THIS WARRANT CERTIFIES THAT, for good and valuable consideration, [●] (together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, the “Holder”) is entitled to purchase up to the number of duly authorized, validly issued, fully paid and non-assessable shares (the “Warrant Shares”) of the above-stated common stock (the “Common Stock”) of the above-named company (the “Company”) at the above-stated Warrant Price, all as set forth above and as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant. Capitalized terms used, but not otherwise defined herein shall have the meanings set forth in the Loan Agreement.
SECTION 1. EXERCISE.
1.aMethod of Exercise. The Holder may at any time and from time to time prior to the Expiration Date exercise this Warrant, in whole or in part, by delivering to the Company (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the company) the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 (such date of the Company’s receipt of the Notice of Exercise, the “Date of Exercise”) and, unless the Holder is exercising this Warrant pursuant to a cashless exercise set forth in Section 1.2, within three (3) Trading Days of the date such Notice of Exercise is delivered to the Company, the Company shall have received payment of the aggregate Warrant Price of the Warrant Shares thereby purchased by wire transfer (to an account designated by the Company) or other form of payment acceptable to the Company. Notwithstanding any contrary provision herein, if this Warrant was originally executed and/or delivered electronically, in no event shall the Holder be required to surrender or deliver an ink-signed paper copy of this Warrant in connection with its exercise hereof or of any rights hereunder, nor shall the Holder be required to surrender or deliver a paper or other physical copy of this Warrant in connection with any exercise hereof.
1.bCashless Exercise. On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, the Holder may elect to receive Warrant Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised. Thereupon, the Company shall issue to the Holder such number of duly authorized, validly issued, fully paid, and non-assessable Warrant Shares as are computed using the following formula:
X = Y(A-B)/A
where:
X = the number of Warrant Shares to be issued to the Holder;
Y = the number of Warrant Shares with respect to which this Warrant is being exercised (inclusive of the Warrant Shares surrendered to the Company in payment of the aggregate Warrant Price);
A = the fair market value (as determined pursuant to Section 1.3 below) of one Warrant Share; and
B = the Warrant Price.
1.cFair Market Value. If the Company’s Common Stock is then listed on a Trading Market, the fair market value of a Warrant Share shall be the volume weighted average of the closing sales price of a share of Common Stock during the five (5) Trading Day period ending on the Trading Day prior to the applicable Date of Exercise (such period, the “Listed Averaging Period”). If the Company’s Common Stock is not then listed on a Trading Market, the fair market value of a Warrant Share shall be the average closing price per share of the Company’s Common Stock during the twenty (20) Trading Day period ending on the Trading Day prior to the applicable Date of Exercise as quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system (such period, the “Unlisted Averaging Period”). If the Company’s Common Stock is not listed on a Trading Market and there have been no sales of the Company’s Common Stock on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association during the period set forth in the preceding sentence, the fair market value of a Warrant Share shall be determined in good faith by the Board of Directors of the Company. For purposes of calculating the volume weighted average price over any multiple-day period, the number of shares of Common Stock shall be adjusted for any stock splits, stock combinations, reclassifications or similar transaction.
1.dDelivery of Certificate and New Warrant. After the Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2 above, the Warrant Shares issued to the Holder upon exercise shall be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is then a participant in such system and the shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise by book-entry or physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is three (3) Trading Days after the latest of (A) the end of the Listed Averaging Period or the Unlisted Averaging Period, as applicable, (B) surrender of this Warrant (if required), and (C) payment of the aggregate Warrant Price as set forth above (such date, the “Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on the first date on which all of the foregoing have been delivered to the Company. The Warrant Shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a
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holder of record of such Warrant Shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Warrant Price and all taxes (other than transfer taxes) required to be paid by the Holder. If this Warrant has not been fully exercised and has not expired, a new warrant of like tenor representing the Warrant Shares not so acquired.
1.eReplacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to the Holder, in lieu of this Warrant, a new warrant of like tenor and amount.
1.fCharges, Taxes and Expenses. Issuance of certificates for Warrant Shares or by book-entry registration shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate or book-entry registration, all of which taxes and expenses shall be paid by the Company, and such certificates or book-entry registration shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that the Company shall not be required to pay any tax or governmental charge which may be issuable upon exercise of this Warrant payable in respect of any transfer involved in the issue and delivery of Warrant Shares in a name other than that of the Holder of the Warrant to be exercised, and no such issue or delivery shall be made unless and until the Holder requesting such issue has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid; provided, further, that in the event certificates or book-entry registration for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto as Appendix 2 duly executed by the Holder.
1.gClosing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
1.hRescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder certificates or book-entry registration representing the Warrant Shares pursuant to Section 1.4 by the Warrant Share Delivery Date, then, the Holder will have the right to rescind such exercise.
SECTION 2. ADJUSTMENTS TO THE WARRANT SHARES AND WARRANT PRICE.
1.iStock Dividends, Splits, Etc. If the Company declares or pays a dividend or distribution on the outstanding shares of the Common Stock payable in securities or property (other than cash), then upon exercise of this Warrant, for each Warrant Share acquired, the Holder shall receive, without additional cost to the Holder, the total number and kind of securities and property which the Holder would have received had the Holder owned the Warrant Shares of record as of the date the dividend or distribution occurred. If the Company subdivides the outstanding shares of the Common Stock by reclassification or otherwise into a greater number of shares, the number of Warrant Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased. If the outstanding shares of the Common Stock are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Warrant Shares shall be proportionately decreased.
1.jReclassification, Exchange, Combinations or Substitution. Upon any event whereby all of the outstanding shares of the Common Stock are reclassified, exchanged,
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combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this Warrant will be exercisable for the number, class and series of Company securities that the Holder would have received had the Warrant Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations substitutions, replacements or other similar events.
1.kRecord Date. In case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock; warrants or other rights or options to subscribe for or purchase Common Stock (collectively, “Options”); or any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options (collectively, “Convertible Securities”), or (B) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be; provided, that if before the distribution to its holders of Common Stock the Company legally abandons its plan to pay or deliver such dividend, distribution, subscription, or purchase rights, then thereafter no adjustment shall be required by the taking of such record and any such adjustment previously made in respect thereof shall be rescinded and annulled.
1.lTreasury Shares. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company or any of its wholly-owned subsidiaries, and the disposition of any such shares (other than the cancellation or retirement thereof or the transfer of such shares among the Company and its wholly-owned subsidiaries) shall be considered an issue or sale of Common Stock for the purpose of this Section 2.4.
1.mOther Dividends and Distributions. If the Company shall, at any time or from time to time after the Issue Date, make or declare, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or any other distribution payable in securities of the Company (other than a dividend or distribution of shares of Common Stock, Options or Convertible Securities in respect of outstanding shares of Common Stock), cash or other property, then, and in each such event, provision shall be made so that the Holder shall receive upon exercise or conversion of this Warrant, in addition to the number of Warrant Shares receivable thereupon, the kind and amount of securities of the Company, cash, or other property which the Holder would have been entitled to receive had the Warrant been exercised or converted in full into Warrant Shares on the date of such event and had the Holder thereafter, during the period from the date of such event to and including the Exercise Date, retained such securities, cash, or other property receivable by them as aforesaid during such period, giving application to all adjustments called for during such period under this Section 2 with respect to the rights of the Holder; provided, that no such provision shall be made if the Holder receives, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities, cash, or other property in an amount equal to the amount of such securities, cash, or other property as the Holder would have received if the Warrant had been exercised in full into Warrant Shares on the date of such event.
1.nFundamental Transaction. If, at any time while this Warrant is outstanding, a Fundamental Transaction occurs, then, upon exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the
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surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 2.6 pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the Warrant Price hereunder to such shares of capital stock (but taking into account the value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Company or the Successor Entity, as applicable), and, as applicable, the Company or the Successor Entity or Successor Entities, jointly and severally, may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if, as applicable, the Company or such Successor Entity or Successor Entities, jointly and severally, had been named as the Company herein.
1.oNo Fractional Share. No fractional Warrant Share shall be issuable upon exercise of this Warrant and the number of Warrant Shares to be issued shall be rounded down to the nearest whole Warrant Share. If a fractional Warrant Share interest arises upon any exercise of the Warrant, the Company shall eliminate such fractional Warrant Share interest by paying the Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above) of a full Warrant Share, less (ii) the then-effective Warrant Price.
1.pNo Impairment. The Company shall not, directly or indirectly, by amendment of its Certificate of Incorporation or other governing or organizational documents, or through reorganization, consolidation, merger, dissolution, sale of assets, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable Warrant Shares upon the exercise of this Warrant and (iii) obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
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1.qNotice to Holder of Certain Events. Upon each adjustment of the Warrant Price, Common Stock and/or number of Warrant Shares, the Company, at the Company’s expense, shall notify the Holder in writing within three (3) Business Days setting forth the adjustments to the Warrant Price, class and/or number of Warrant Shares and facts upon which such adjustment is based. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the warrant register of the Company, at least 10 calendar days prior to the applicable record or effective date hereinafter specified (or, less than 10 calendar days, if sent concurrently upon the notice sent to the Company’s stockholders or public disclosure by the Company of such events), a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
SECTION 3. TRANSFER OF WARRANT.
1.rTransferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 3.4 hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto as Appendix 2 executed by the Holder or its agent or attorney. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
1.sNew Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 3.1, as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be
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dated as of the Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
1.tWarrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
1.uRepresentations and Warranties by the Holder. The Holder, by the acceptance hereof, represents and warrants to, and agrees with the Company as follows:
(i)The Holder is acquiring this Warrant and, upon any exercise hereof (other than upon a cashless exercise pursuant to Section 1.2), will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.
(ii)At the time the Holder was offered this Warrant, it was, and as of the date of this Warrant is, an “accredited investor” as defined in Regulation D, Rule 501(a), promulgated under the Securities Act.
(iii)The Holder does not beneficially own more than 4.9% of the Common Stock.
(iv)Neither the Holder, directly or indirectly, nor any Person acting on behalf of or pursuant to any understanding with the Holder, has engaged in any transactions in the securities of the Company (including, without limitation, any Short Sales involving any of the Company’s securities) since the time that such Holder was first contacted by the Company or any other Person regarding this Warrant. The Holder covenants that neither it nor any Person acting on its behalf or pursuant to any understanding with the Holder will engage, directly or indirectly, in any Short Sales while this Warrant remains outstanding. “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act and all types of direct and indirect stock pledges, forward sale contracts, options, puts, calls, short sales, swaps, other derivatives and similar arrangements (including on a total return basis), and sales or any other transactions that directly or indirectly transfer, dispose of or hedge economic interests in the Common Stock.
SECTION 4. MISCELLANEOUS.
1.aTerm and Automatic Cashless Exercise Upon Expiration.
(i)Term. Subject to the provisions of Section 1.6 above and Section 5.1(b) below, this Warrant is exercisable in whole or in part at any time and from time to time on or before 6:00 PM, Eastern time, on the Expiration Date and shall be void thereafter.
(ii)Automatic Cashless Exercise upon Expiration. In the event that, upon the Expiration Date, the fair market value of one Warrant Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above is greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Warrant Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Warrant Shares (or such other securities) issued upon such exercise to Holder.
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1.aLegends. The Warrant Shares shall be imprinted with a legend in substantially the following form:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE COMMON STOCK ISSUED BY THE ISSUER TO [●], DATED AUGUST 3, 2022, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
1.bNo Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 1.1.
1.cAuthorized Shares
(iii)The Company covenants that as of the date that is 30 days following the date hereof and during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of the Company’s organizational documents, any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.
(iv)Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary under applicable law or from any public regulatory body or bodies having jurisdiction thereof.
(v)If any shares of Common Stock are listed on a Trading Market, the Company shall use its reasonable best efforts to cause the Warrant Shares issued upon the exercise of this Warrant to also be listed on such Trading Market and shall thereafter use its reasonable best efforts to maintain such listing.
1.bRepresentations and Warranties. The Company represents and warrants to, and agrees with the Holder that all Warrant Shares which may be issued upon exercise of this Warrant, shall, upon issuance, be duly authorized, validly issues, fully paid and non-assessable, and free of any liens and encumbrances, except for restrictions on transfer provided for herein or under applicable federal and state securities laws.
1.cNotices. All notices and other communications hereunder from the Company to the Holder, or vice versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3rd) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if given by electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first (1st) Business Day following
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delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 4.6. All notices to the Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:
[●]
Attn: [●]
Telephone: [●]
Email address: [●]
With a copy (which shall not constitute notice) to:
Akin Gump Strauss Hauer & Feld LLP
One Bryant Park
Bank of America Tower
New York, NY 10036-6745
Attention: Daniel I. Fisher
Ryan R. Cox
Email: dfisher@akingump.com
rcox@akingump.com
Notice to the Company shall be addressed as follows until the Holder receives notice of a change in address:
8x8, Inc.
675 Creekside Way
Campbell, CA 95008
Attn: General Counsel
Email: legal-notices@8x8.com
1.dWaiver. This Warrant and any term hereof may be amended, modified, changed, waived, discharged or terminated (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such amendment, modification, change, waiver, discharge or termination is sought.
1.eRestrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
1.fAttorney’s Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.
1.gCounterparts; Facsimile/Electronic Signatures. This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement. Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.
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1.hGoverning Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to its principles regarding conflicts of law.
1.iHeadings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.
1.jEquitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by the Company of any of its obligations under this Warrant would give rise to irreparable harm to the Holder for which monetary damages would not be an adequate remedy and hereby agree that in the event of a breach or a threatened breach by the Company of any such obligations, the Holder shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction.
SECTION 5. DEFINITIONS.
1.aCertain Definitions. For purposes of this Warrant, the following terms shall have the following meanings:
“Affiliate” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such first Person, or any general partner, managing member, officer, director, trustee, limited partner, member or stockholder of such first Person, or any investment fund now or hereafter existing that is controlled by one (1) or more general partners, managing members or investment adviser of, or shares the same management company or investment adviser with, such first Person.
“Business Day” means any day that is not a Saturday, Sunday or a day on which banks in New York, New York are closed.
“control” (including, with correlative meanings, “controlled by” and “under common control with”) means possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract, or otherwise).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fundamental Transaction” means (i) the Company, directly or indirectly, in one or more related transactions, effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any direct or indirect purchase offer, tender offer or exchange offer (whether by the Company or another Person) (or in one or more related transactions) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions, effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property or (v) the Company, directly or indirectly, in one or more related transactions, consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or
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group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination).
“Person” means any individual, trust, estate, corporation, partnership, limited liability company or any other incorporated or unincorporated entity.
“Principal Market” means the New York Stock Exchange (or any successor to the foregoing.
“Trading Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded; provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York Time).
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
“Transfer Agent” means Computershare Inc., a Delaware corporation, and its affiliate, Computershare Trust Company, N.A., a federally chartered trust company, except as may otherwise be updated by notice from the Company to the Holder if the Company elects to change its transfer agent.
[Remainder of page left blank intentionally]
[Signature page follows]
[Signature page follows]
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IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Common Stock to be executed by their duly authorized representatives effective as of the Issue Date written above.
| “COMPANY” | ||||||||
| 8x8, Inc. | ||||||||
| By: | ||||||||
| Name: | ||||||||
Title: | ||||||||
[Signature Page to Warrant to Purchase Common Stock]
| “HOLDER” | ||||||||
| [●] | ||||||||
| By: | ||||||||
| By: | ||||||||
| By: | ||||||||
| Name: | ||||||||
| Title: | ||||||||
[Signature Page to Warrant to Purchase Common Stock]
APPENDIX 1
NOTICE OF EXERCISE
NOTICE OF EXERCISE
1. The undersigned Holder hereby exercises its right to purchase ___________ shares of the Common Stock of 8x8, Inc. (the “Company”) in accordance with the attached Warrant to Purchase Common Stock, and tenders payment of the aggregate Warrant Price for such shares as follows:
[ ] Wire transfer of immediately available funds to the Company’s account
[ ] Cashless Exercise pursuant to Section 1.2 of the Warrant
[ ] Other [Describe] __________________________________________
2. Please issue a certificate or certificates representing the Shares in the name specified below:
___________________________________________
Holder’s Name
___________________________________________
___________________________________________
(Address)
3. By its execution below and for the benefit of the Company, the Holder hereby restates each of the representations and warranties in Section 4 of the Warrant to Purchase Common Stock as of the date hereof.
HOLDER
___________________________________
By:________________________________
Name:______________________________
Title:_______________________________
Date:_______________________________
APPENDIX 2
FORM OF ASSIGNMENT
FORM OF ASSIGNMENT
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to
_______________________________________________ whose address is _______________________________________________________________.
_______________________________________________________________
Dated: ______________, _______
Holder’s Signature: _____________________________
Holder’s Address: _____________________________
_____________________________
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.
8x8 Announces Convertible Notes Exchange, New Issuance and Stock Repurchase
•$404 million aggregate principal amount of existing notes due 2024 exchanged for $202 million aggregate principal amount of new notes due 2028 and cash
•$60 million share repurchase reduces shares issued and outstanding by estimated 10.7 million shares
•Proceeds of new $250 million Term Loan Credit Facility led by Francisco Partners funds cash portion of convertible note exchange and share repurchase
CAMPBELL, Calif.— August 3, 2022 — 8x8, Inc. (NYSE: EGHT) ("8x8" or the "Company"), a leading integrated cloud communications platform provider, announced today that it has entered into privately negotiated agreements with certain of the holders of its existing 0.50% Convertible Senior Notes due 2024 (the “2024 Notes”) to exchange an aggregate of approximately $404 million principal amount of the 2024 Notes for approximately $202 million aggregate principal amount of a newly issued series of 4.00% Convertible Senior Notes due 2028 (the “New Notes”) and approximately $182 million in cash (the “Exchange”). The Exchange is expected to close on or about August 11, 2022, subject to customary closing conditions.
8x8 intends to use the proceeds of a new term loan described below to fund the cash portion of the Exchange and repurchase $60 million of the Company's common stock in privately negotiated transactions at an average price per share of approximately $5.61 (equal to the closing price of the Company’s common stock on August 3, 2022) to facilitate the Exchange (the “Buyback”). These repurchases could increase, or prevent a decrease in, the market price of the Company’s common stock.
Interest on the New Notes will be payable semi-annually in arrears at a rate of 4% per annum on February 1 and August 1 of each year, beginning on February 1, 2023. The New Notes will mature on February 1, 2028, unless earlier converted, redeemed or repurchased.
Following the Exchange, Buyback and funding of the new term loan, the Company anticipates changes to its debt and share count profiles as reflected below:
•Approximately $404 million, or 81%, of the 2024 Notes exchanged for approximately $202 million of the New Notes and approximately $182 million in cash.
•Total debt outstanding after the exchange and including the term loan facility will be approximately $548 million.
•Shares issued and outstanding reduced by 10.695 million (8.9%), from approximately 120 million shares to approximately 109 million shares.
Reconciliation of Shares Issued and Outstanding:
| Shares issued and outstanding as of 7/25/221 | 119,964,673 | ||||
| Cash for share buybacks | $60,000,000 | ||||
| Closing share price on 08/3/22 | $5.61 | ||||
| Shares repurchased and retired | 10,695,000 | ||||
| Pro forma shares outstanding after buybacks | 109,269,673 | ||||
| % decrease in shares issued and outstanding | 8.9% | ||||
Summary of Changes to 8x8 Debt Profile:
New Note Issuance and New Term Loan | Post Exchange and Issuance | |||||||||||||||||||||||||
| ($MM) | Pre- Exchange | Exchanged Notes | New Notes/Loan | Post Exchange Outstanding | % Change | % of Debt Obligations | ||||||||||||||||||||
| 2024 Notes | $500 | ($404) | — | $96 | (81)% | 18% | ||||||||||||||||||||
| New 2028 Notes | — | — | $202 | $202 | — | 37% | ||||||||||||||||||||
| New Term Loan due August 2027 | — | — | $250 | $250 | — | 46% | ||||||||||||||||||||
| Total Debt Obligations | $500 | ($404) | $452 | $548 | 10% | 100% | ||||||||||||||||||||
The initial conversion rate of the New Notes will be 139.8064 shares of the Company's common stock per $1,000 principal amount of New Notes, which is equivalent to an initial conversion price of approximately $7.15 per share, and is subject to adjustment upon the occurrence of certain events. The initial conversion price of the New Notes represents a premium of approximately 27.5% over the last reported sale price of $5.61 per share of the Company's common stock on the New York Stock Exchange on August 3, 2022. The Company will settle conversions of the New Notes by paying or delivering cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at its election, subject to any covenants in the term loan facility.
The Company may redeem all or any portion of the New Notes, at its option, on or after August 3, 2025 if the last reported sale price of the Company's common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which 8x8
1 Shares issued and outstanding reported in the Company’s fiscal first quarter Form 10-Q filed on July 25, 2022.
provides notice of redemption at a redemption price equal to 100% of the principal amount of the New Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.
Holders of New Notes may require the Company to repurchase their New Notes upon the occurrence of a fundamental change (as defined in the indenture governing the New Notes) at a purchase price equal to the principal amount thereof plus accrued and unpaid interest to, but excluding, the repurchase date. In addition, in connection with certain corporate events or if the Company issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for holders who elect to convert their New Notes in connection with such corporate event or during the relevant redemption period.
In connection with the Exchange, 8x8 intends to enter into an indenture establishing the terms of the New Notes.
Neither the New Notes, nor any shares of the Company's common stock issuable upon conversion of the New Notes, have been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.
J. Wood Capital Advisors LLC acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to the Company on the transaction.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy the New Notes, the Company's common stock potentially issuable upon conversion of the New Notes or any other securities, and will not constitute an offer, solicitation or sale in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.
8x8 Announces $250 Million Term Loan Credit Facility in Transaction Led by Francisco Partners
Separately, the Company announced a new $250 million senior secured term loan facility in a tailored capital solution led by Francisco Partners. The Company intends to use the facility to fund the cash portion of the exchange of approximately $404 million principal amount of the Company’s 0.50% convertible notes due 2024 and the concurrent repurchase of approximately $60 million of the Company’s common stock.
In connection with the term loan, the Company also issued detachable warrants exercisable for an aggregate of 3.1 million shares of the Company’s common stock to Francisco Partners and its affiliates. The warrants carry a five-year term and an exercise price equal to $7.15, representing a 27.5% premium over the closing price of the Company’s common stock on August 3, 2022.
About 8x8 Inc.
8x8, Inc. (NYSE: EGHT) is transforming the future of business communications as a leading Software as a Service provider of 8x8 XCaaS™ (eXperience Communications as a Service™), an integrated contact center, voice communications, video, chat, and API built on one global cloud communications platform. 8x8 uniquely eliminates the silos between Unified Communications as a Service (UCaaS) and Contact Center as a Service (CCaaS) to power the communications requirements of all employees globally as they work together to deliver differentiated customer experiences. For additional information, visit www.8x8.com, or follow 8x8 on LinkedIn, Twitter and Facebook.
8x8®, 8x8 XCaaS™, eXperience Communications as a Service™, eXperience Communications Platform™ are trademarks of 8x8, Inc.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. Any statements that are not statements of
historical fact may be deemed to be forward-looking statements. For example, words such as "may," "will," "should," "estimates," "predicts," "potential," "continue," "strategy," "believes," "anticipates," "plans," "expects," "intends" and similar expressions are intended to identify forward-looking statements. These forward-looking statements include but are not limited to the Company's ability to close the foregoing transactions on the timeline described, with the terms anticipated, or at all. Actual results could differ materially from those projected in forward-looking statements depending on a variety of factors. These include that the closing of the transactions is subject to closing conditions. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's reports on Forms 10-K and 10-Q, as well as other reports that 8x8 files from time to time with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement, and 8x8 undertakes no obligation to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future.
###
8x8, Inc. Contacts:
Investor Relations:
Kate Patterson, 1-408-763-8175
katherine.patterson@8x8.com
Media:
John Sun, 1-408-692-7054
john.sun@8x8.com
8x8, Inc. Announces $250 Million Senior Secured Term Loan Credit Facility in a Customized Capital Solution Led by Francisco Partners
New Facility Represents Strategic Investment by Francisco Partners; Proceeds Will Fund $60 Million Share Repurchase and Cash Portion of the Exchange of $404 Million Convertible Debt
CAMPBELL, Calif.— August 3, 2022 — 8x8, Inc. (NYSE: EGHT) (the “Company” or “8x8”), a leading integrated cloud communications platform provider, today announced a new $250 million senior secured term loan facility in a transaction led by Francisco Partners. Under the credit agreement, the Company intends to use the facility to fund the cash portion of an exchange of approximately $404 million principal amount of the Company’s 0.50% convertible notes due 2024 and the concurrent repurchase of approximately $60 million of the Company’s common stock.
“We are excited to partner with 8x8 by providing a customized capital solution,” said Scott Eisenberg, Head of Credit and Structured Solutions at Francisco Partners. “8x8 is a leader in the large and growing cloud communications market and we look forward to supporting management by helping advance their vision for the business and drive value for all stakeholders.”
“Francisco Partners’ commitment of capital to 8x8 recognizes the opportunity and importance of our XCaaS vision to deliver a single-vendor cloud communications and contact center solution that empowers workers in today’s hybrid workplaces,” said Samuel Wilson, 8x8 Chief Financial Officer. “By simultaneously executing a term loan, convertible debt exchange, and share repurchase, we extend the maturity of more than 80 percent of our 2024 convertible debt while limiting the potential dilutive impact to existing shareholders. Our continued focus on operational efficiency was a key factor in negotiating favorable terms for these transactions. Consistent with the increased emphasis on profitability and cash flow generation we communicated with our fiscal first quarter earnings release, we reiterate our recently communicated goals of remaining operating cash flow positive and generating an operating profit on a non-GAAP basis.”
Term Loan Facility Details
The term loan facility will mature in July 2027. Advances under the term loan facility will bear interest at an annual rate equal to the Term Secured Overnight Financing Rate (SOFR), plus a margin of 6.50%, subject to a floor of 1.00% and a credit spread adjustment of 0.10%. Wilmington Savings Fund Society, FSB will serve as administrative agent, with certain affiliates of Francisco Partners as lenders (the “Credit Agreement”).
In conjunction with the term loan facility, the Company also issued detachable warrants exercisable for an aggregate of 3.1 million shares of the Company’s common stock to Francisco Partners and its affiliates. The warrants carry a five-year term and an exercise price equal to $7.15, representing a 27.5% premium over the closing price of the Company’s common stock on August 3, 2022, the pricing date.
Loans under the Credit Agreement contain customary financial covenants as well as affirmative and negative covenants customary for transactions of this type, including minimum liquidity and limitations with respect to indebtedness, liens, investments, dividends, disposition of assets, change in business and transactions with affiliates.
The Credit Agreement will be guaranteed by certain of the Company’s wholly-owned subsidiaries, other than immaterial subsidiaries and other customary exceptions, and secured by a perfected security interest in substantially all of the Company’s tangible and intangible assets, as well as substantially all of the tangible and intangible assets of the guarantors.
The initial funding of loans under the Credit Agreement is expected to occur on August 10, 2022, subject to customary closing conditions.
J. Wood Capital Advisors LLC acted as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to the Company on the transaction.
About 8x8 Inc.
8x8, Inc. (NYSE: EGHT) is transforming the future of business communications as a leading Software as a Service provider of 8x8 XCaaS™ (eXperience Communications as a Service™), an integrated contact center, voice communications, video, chat, and API built on one global cloud communications platform. 8x8 uniquely eliminates the silos between Unified Communications as a Service (UCaaS) and Contact Center as a Service (CCaaS) to power the communications requirements of all employees globally as they work together to deliver differentiated customer experiences. For additional information, visit www.8x8.com, or follow 8x8 on LinkedIn, Twitter and Facebook.
8x8®, 8x8 XCaaS™, eXperience Communications as a Service™, eXperience Communications Platform™ are trademarks of 8x8, Inc.
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Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. Any statements that are not statements of historical fact may be deemed to be forward-looking statements. For example, words such as "may," "will," "should," "estimates," "predicts," "potential," "continue," "strategy," "believes," "anticipates," "plans," "expects," "intends," and similar expressions are intended to identify forward-looking statements. These forward-looking statements, include but are not limited to the Company's ability to close the foregoing transactions on the timeline described, with the terms anticipated, or at all and whether the Company remains cash flow positive and profitable on a non-GAAP basis. Actual results could differ materially from those projected in forward-looking statements depending on a variety of factors. These include that the closing of the transactions is subject to closing conditions. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's reports on Forms 10-K and 10-Q, as well as other reports that 8x8 files from time to time with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement, and 8x8 undertakes no obligation to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future.
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8x8, Inc. Contacts:
Investor Relations:
Kate Patterson, 1-408-763-8175
katherine.patterson@8x8.com
Media:
John Sun, 1-408-692-7054
john.sun@8x8.com
Francisco Partners Contact:
Whit Clay, 1-212-446-1864
wclay@sloanepr.com
Whit Clay, 1-212-446-1864
wclay@sloanepr.com