UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): October 7, 2013
NAVISTAR INTERNATIONAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware | 1-9618 | 36-3359573 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
2701 Navistar Drive, Lisle Illinois 60532
(Address of Principal executive offices, including Zip Code)
(331) 332-5000
(Registrants 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)) |
Item 1.01. Entry into a Material Definitive Agreement.
On October 11, 2013, Navistar International Corporation (the Company) completed its previously announced private placement of $200,000,000 aggregate principal amount of 4.50% senior subordinated convertible notes due 2018 (the Convertible Notes) pursuant to a Purchase Agreement, dated October 7, 2013 (the Purchase Agreement), by and between the Company and J.P. Morgan Securities LLC, as representative of the several initial purchasers named therein (the Initial Purchasers). The Initial Purchasers also have the option to purchase up to an additional $30,000,000 principal amount of the Convertible Notes at the offering price within the 30-day period from the date of the original issuance of the Convertible Notes. The Convertible Notes are governed by the terms of an indenture, dated as of October 11, 2013 (the Indenture), by and among the Company, Wilmington Trust, National Association, as trustee (the Trustee) and Citibank, N.A., as paying agent.
Interest is payable on the Convertible Notes on April 15 and October 15 of each year beginning on April 15, 2014 until their maturity date of October 15, 2018. Holders may convert the Convertible Notes into common stock of the Company, par value $0.10 per share (Common Stock), at their option prior to April 15, 2018, under the following circumstances: (1) during any fiscal quarter commencing after October 31, 2013, if the last reported sale price of the Companys common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter is greater than or equal to 130% of the applicable conversion price on each such trading day; (2) during the five business day period after any five consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of that measurement period was less than 98% of the product of the last reported sale price of the Common Stock and the applicable conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. On and after April 15, 2018 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at any time, regardless of the foregoing circumstances.
Upon conversion, the Company will satisfy its conversion obligations by delivering, at its election, shares of Common Stock (plus cash in lieu of fractional shares), cash, or any combination of cash and shares of Common Stock in accordance with the terms of the Indenture. The initial conversion rate will be 17.1233 shares of Common Stock per $1,000 principal amount of Convertible Notes, equivalent to an initial conversion price of $58.40 per share of Common Stock. The conversion rate will be subject to adjustment in some events but will not be adjusted for accrued interest. Following certain corporate transactions that occur prior to the maturity date, the Company will increase the conversion rate for a holder that elects to convert its Convertible Notes in connection with such a corporate transaction in certain circumstances.
On or after October 15, 2016, the Convertible Notes will be subject to redemption, in whole or in part, at the Companys option, at a redemption price equal to 100% of the principal amount of Convertible Notes to be redeemed, plus accrued and unpaid interest (including any additional interest) to, but excluding, the redemption date, if the last reported sale price of Common Stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending within 10 trading days immediately prior to the date of the redemption
notice exceeds 130% of the applicable conversion price for the Convertible Notes on each applicable trading day. If the Company calls any or all of the Convertible Notes for redemption, holders will have the right to convert their Convertible Notes at any time until the close of business on the business day preceding the redemption date.
Subject to certain exceptions, holders may require the Company to repurchase, for cash, all or part of the Convertible Notes upon a Fundamental Change (as defined in the Indenture) at a price equal to 100% of the principal amount of the Convertible Notes being repurchased plus any accrued and unpaid interest, including any additional interest, to, but excluding, the date of repurchase.
The Indenture provides for customary events of default which include (subject in certain cases to customary grace and cure periods), among others, nonpayment of principal or interest; failure to convert the Convertible Notes in accordance with the Indenture, breach of other agreements in the Indenture; defaults in, or failure to pay, certain other indebtedness; the rendering of judgments to pay certain amounts of money against the Company and its subsidiaries; and certain events of bankruptcy or insolvency. Generally, if an event of default occurs and is not cured within the time periods specified, the Trustee or the holders of at least 25% in principal amount of the then outstanding series of Convertible Notes may declare all the Convertible Notes of such series to be due and payable immediately.
The foregoing description of the Purchase Agreement and the Indenture does not purport to be complete and is qualified in its entirety by reference to the Indenture, form of convertible note and Purchase Agreement filed hereto as Exhibits 4.1, 4.2 and 10.1, respectively, which are incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 is incorporated by reference into this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities.
The Convertible Notes were sold to Initial Purchasers in reliance on the exemption from the registration requirements provided by Section 4(2) of the Securities Act of 1933, as amended (the Securities Act), for resale to qualified institutional buyers pursuant to Rule 144A of the Securities Act. The Company does not intend to file a shelf registration statement for the resale of the Convertible Notes or the Common Stock issuable upon conversion of the Convertible Notes, if any.
This Current Report on Form 8-K does not constitute an offer to sell, or a solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful.
Additional information pertaining to the Convertible Notes and the shares of Common Stock issuable upon conversion of the Convertible Notes is contained in Item 1.01 of this report and is incorporated herein by reference
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Item 8.01. Other Events.
On October 7, 2013, the Company issued a press release announcing the pricing of the offering of Convertible Notes. A copy of the press release is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
The following documents are filed herewith:
Exhibit No. |
Description |
|
Exhibit 4.1 | Indenture, dated as of October 11, 2013, between Navistar International Corporation and Wilmington Trust, National Association, as Trustee | |
Exhibit 4.2 | Form of 4.50% Senior Subordinated Convertible Note due 2018 (included in Exhibit 4.1) | |
Exhibit 10.1 | Purchase Agreement, dated as of October 7, 2013, by and between Navistar International Corporation and J.P. Morgan Securities LLC, as representative of the initial purchasers listed on Schedule 1 thereto | |
Exhibit 99.1 | Press release dated October 7, 2013 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
NAVISTAR INTERNATIONAL CORPORATION | ||||||
Date: October 11, 2013 |
/s/ Walter G. Borst |
|||||
Name: | Walter G. Borst | |||||
Title: | Executive Vice President and Chief Financial Officer |
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EXHIBIT INDEX
Exhibit No. |
Description |
|
Exhibit 4.1 | Indenture, dated as of October 11, 2013, between Navistar International Corporation and Wilmington Trust, National Association, as Trustee | |
Exhibit 4.2 | Form of 4.50% Senior Subordinated Convertible Note due 2018 (included in Exhibit 4.1) | |
Exhibit 10.1 | Purchase Agreement, dated as of October 7, 2013, by and between Navistar International Corporation and J.P. Morgan Securities LLC, as representative of the initial purchasers listed on Schedule 1 thereto | |
Exhibit 99.1 | Press release dated October 7, 2013 |
Exhibit 4.1
NAVISTAR INTERNATIONAL CORPORATION
as Issuer
WILMINGTON TRUST, NATIONAL ASSOCIATION
as Trustee
CITIBANK, N.A.
As Note Registrar, Paying Agent, Transfer Agent,
Authenticating Agent and Conversion Agent
Indenture
Dated as of October 11, 2013
4.50% Senior Subordinated Convertible Notes due 2018
Table of Contents
Page | ||||||
ARTICLE 1 | ||||||
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION | ||||||
SECTION 1.01. |
General | 1 | ||||
SECTION 1.02. |
Definitions | 2 | ||||
ARTICLE 2 | ||||||
THE SECURITIES | ||||||
SECTION 2.01. |
Designation and Amount | 15 | ||||
SECTION 2.02. |
Form of Notes | 15 | ||||
SECTION 2.03. |
Date and Denomination of Notes; Payments of Interest | 16 | ||||
SECTION 2.04. |
Rule 144A Information | 18 | ||||
SECTION 2.05. |
Execution, Authentication and Delivery of Notes | 21 | ||||
SECTION 2.06. |
Exchange and Registration of Transfer of Notes; Depositary | 22 | ||||
SECTION 2.07. |
Mutilated, Destroyed, Lost or Stolen Notes | 25 | ||||
SECTION 2.08. |
Temporary Notes | 26 | ||||
SECTION 2.09. |
Cancellation of Notes Paid, Etc | 26 | ||||
SECTION 2.10. |
CUSIP Numbers | 26 | ||||
SECTION 2.11. |
Repurchases | 27 | ||||
ARTICLE 3 | ||||||
FUNDAMENTAL CHANGES AND PURCHASES THEREUPON | ||||||
SECTION 3.01. |
Purchase at Option of Holders Upon a Fundamental Change | 27 | ||||
SECTION 3.02. |
Effect of Fundamental Change Purchase Notice | 30 | ||||
SECTION 3.03. |
Withdrawal of Fundamental Change Purchase Notice | 30 | ||||
SECTION 3.04. |
Deposit of Fundamental Change Purchase Price | 30 | ||||
SECTION 3.05. |
Notes Purchased in Whole or in Part | 31 | ||||
SECTION 3.06. |
Covenant to Comply With Applicable Laws Upon Purchase of Notes | 31 | ||||
SECTION 3.07. |
Repayment to the Company | 31 | ||||
ARTICLE 4 | ||||||
CONVERSION | ||||||
SECTION 4.01. |
Right to Convert | 32 | ||||
SECTION 4.02. |
Conversion Procedures | 34 | ||||
SECTION 4.03. |
Settlement Upon Conversion | 36 |
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SECTION 4.04. |
Adjustment of Conversion Rate | 38 | ||||
SECTION 4.05. |
Certain Other Adjustments | 47 | ||||
SECTION 4.06. |
Adjustments Upon Certain Fundamental Changes or Redemption Notices | 47 | ||||
SECTION 4.07. |
Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale | 49 | ||||
SECTION 4.08. |
Taxes on Shares Issued | 50 | ||||
SECTION 4.09. |
Reservation of Shares; Shares to be Fully Paid; Compliance With Governmental Requirements; Listing of Common Stock |
50 | ||||
SECTION 4.10. |
Responsibility of Trustee and Conversion Agent | 51 | ||||
SECTION 4.11. |
Notice to Holders Prior to Certain Actions | 51 | ||||
SECTION 4.12. |
Stockholder Rights Plan | 52 | ||||
ARTICLE 5 | ||||||
DEFAULTS AND REMEDIES | ||||||
SECTION 5.01. |
Events of Default | 53 | ||||
SECTION 5.02. |
Additional Interest | 54 | ||||
SECTION 5.03. |
Acceleration | 55 | ||||
SECTION 5.04. |
Payments of Notes on Default; Suit Therefor | 55 | ||||
SECTION 5.05. |
Application of Monies Collected by the Agent or the Trustee | 57 | ||||
SECTION 5.06. |
Proceedings by Holders of Notes | 58 | ||||
SECTION 5.07. |
Proceedings by Trustee | 59 | ||||
SECTION 5.08. |
Remedies Cumulative and Continuing | 59 | ||||
SECTION 5.09. |
Direction of Proceedings and Waiver of Defaults by Majority of Holders of Notes | 59 | ||||
SECTION 5.10. |
Notice of Defaults | 60 | ||||
SECTION 5.11. |
Undertaking to Pay Costs | 60 | ||||
ARTICLE 6 | ||||||
MERGER, SALE, CONVEYANCE AND LEASE | ||||||
SECTION 6.01. |
Company May Consolidate, Etc. on Certain Terms | 61 | ||||
SECTION 6.02. |
Successor Person Substituted | 61 | ||||
ARTICLE 7 | ||||||
SUPPLEMENTAL INDENTURES | ||||||
SECTION 7.01. |
Amendments or Supplements Without Consent of Holders | 62 | ||||
SECTION 7.02. |
Amendments, Supplements or Waivers With Consent of Holders | 62 | ||||
SECTION 7.03. |
Effect of Supplemental Indentures | 64 | ||||
SECTION 7.04. |
Notation on Notes | 64 | ||||
SECTION 7.05. |
Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee | 64 |
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-iii-
ARTICLE 11 | ||||||
CONCERNING THE TRUSTEE AND THE AGENT | ||||||
SECTION 11.01. |
Duties and Responsibilities of Trustee and Agent | 76 | ||||
SECTION 11.02. |
Reliance on Documents, Opinions, Etc | 79 | ||||
SECTION 11.03. |
No Responsibility for Recitals, Etc | 80 | ||||
SECTION 11.04. |
Trustee, Paying Agents, Conversion Agents or Note Registrar May Own Notes | 80 | ||||
SECTION 11.05. |
Monies to be Held in Trust | 80 | ||||
SECTION 11.06. |
Compensation and Expenses of Trustee and Agent | 80 | ||||
SECTION 11.07. |
Officers Certificate as Evidence | 81 | ||||
SECTION 11.08. |
[Reserved] | 82 | ||||
SECTION 11.09. |
Eligibility of Trustee and Agent | 82 | ||||
SECTION 11.10. |
Resignation or Removal of Trustee | 82 | ||||
SECTION 11.11. |
Acceptance by Successor Trustee or Agent | 83 | ||||
SECTION 11.12. |
Succession by Merger, Etc | 84 | ||||
SECTION 11.13. |
[Reserved] | 85 | ||||
SECTION 11.14. |
Trustees or Agents Application for Instructions from the Company | 85 | ||||
ARTICLE 12 | ||||||
CONCERNING THE NOTEHOLDERS | ||||||
SECTION 12.01. |
Action by Noteholders | 85 | ||||
SECTION 12.02. |
Proof of Execution by Noteholders | 86 | ||||
SECTION 12.03. |
Who Are Deemed Absolute Owners | 86 | ||||
SECTION 12.04. |
Company-Owned Notes Disregarded | 86 | ||||
SECTION 12.05. |
Revocation of Consents; Future Noteholders Bound | 87 | ||||
ARTICLE 13 | ||||||
SATISFACTION AND DISCHARGE | ||||||
SECTION 13.01. |
Satisfaction and Discharge of the Indenture | 87 | ||||
SECTION 13.02. |
Deposit of Monies to be Held in Trust by Trustee | 88 | ||||
SECTION 13.03. |
Paying Agent to Repay Monies Held | 88 | ||||
SECTION 13.04. |
Return of Unclaimed Monies | 88 | ||||
SECTION 13.05. |
Reinstatement | 88 | ||||
ARTICLE 14 | ||||||
MISCELLANEOUS | ||||||
SECTION 14.01. |
Provisions Binding on Companys Successors | 89 | ||||
SECTION 14.02. |
Official Acts by Successor Corporation | 89 |
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SECTION 14.03. |
Addresses for Notices, Etc | 89 | ||||
SECTION 14.04. |
Governing Law | 90 | ||||
SECTION 14.05. |
Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee and Agent |
90 | ||||
SECTION 14.06. |
Payments on Business Days | 91 | ||||
SECTION 14.07. |
No Security Interest Created | 91 | ||||
SECTION 14.08. |
[Reserved] | 91 | ||||
SECTION 14.09. |
Benefits of Indenture | 91 | ||||
SECTION 14.10. |
Authenticating Agent | 91 | ||||
SECTION 14.11. |
Calculations | 92 | ||||
SECTION 14.12. |
Rules by Trustee, Paying Agent and Note Registrar | 92 | ||||
SECTION 14.13. |
Table of Contents, Headings, Etc | 92 | ||||
SECTION 14.14. |
Execution in Counterparts | 92 | ||||
SECTION 14.15. |
Severability | 93 | ||||
SECTION 14.16. |
No Recourse Against Others | 93 | ||||
SECTION 14.17. |
Waiver of Jury Trial | 93 | ||||
SECTION 14.18. |
Force Majeure | 93 | ||||
ARTICLE 15 | ||||||
REDEMPTION | ||||||
SECTION 15.01. |
Right to Redeem | 93 | ||||
SECTION 15.02. |
Notices to Paying Agent | 94 | ||||
SECTION 15.03. |
Selection of Notes to Be Redeemed | 94 | ||||
SECTION 15.04. |
Notice of Redemption | 94 | ||||
SECTION 15.05. |
Effect of Redemption Notice | 95 | ||||
SECTION 15.06. |
Deposit of Redemption Price | 95 | ||||
SECTION 15.07. |
Notes Redeemed in Part | 96 | ||||
SECTION 15.08. |
Effect of Redemptions in Part | 96 | ||||
SECTION 15.09. |
Conditions to Redemption | 96 |
EXHIBITS
Exhibit A |
Form of Face of Global Note |
A-1 | ||||
Exhibit B |
Form of Notice of Conversion |
B-1 | ||||
Exhibit C |
Form of Fundamental Change Purchase Notice |
C-1 | ||||
Exhibit D |
Form of Assignment and Transfer |
D-1 | ||||
Exhibit E |
Form of Free Transferability Certificate |
E-1 |
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INDENTURE, dated as of October 11, 2013, among Navistar International Corporation, a Delaware corporation (the Company , as more fully set forth in Section 1.02 ), Wilmington Trust, National Association, a national banking association, in its capacity as trustee hereunder (the Trustee , as more fully set forth in Section 1.02 ) and Citibank, N.A., a national banking association, in its capacity as Note Registrar, Paying Agent, Transfer Agent, Authenticating Agent and Conversion Agent hereunder (each as defined herein and collectively, the Agent ) (as amended or supplemented from time to time in accordance with the terms thereof, the Indenture ).
RECITALS
WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issuance of its 4.50% Senior Subordinated Convertible Notes due 2018 (the Notes ), in an aggregate principal amount not to exceed $200,000,000 (or $230,000,000 if the Initial Purchasers exercise their option to purchase additional Notes in full as set forth in the Purchase Agreement), 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 Purchase Notice and the Form of Assignment and Transfer to be borne by the Notes are to be substantially in the forms hereinafter provided for; 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 to constitute these presents a valid agreement according to its terms, have been done and performed, and the execution of this Indenture and the issue hereunder of the Notes have in all respects been duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, for and in consideration of the premises and the purchases of the Notes by the Holders thereof, it is mutually agreed, for the benefit of the Company and the equal and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. General. The terms defined in Section 1.02 (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 Section 1.02 . All other terms used in this Indenture that are defined in the Securities Act (except as herein otherwise expressly provided or unless the context otherwise requires) shall have the meanings assigned to such terms in said Securities Act as in force at the date of the execution of this Indenture. 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. All accounting terms not otherwise defined herein shall have the meanings assigned to them in accordance with generally accepted accounting principles, and, except as otherwise herein expressly provided, the term generally accepted accounting principles with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of this instrument
SECTION 1.02. Definitions.
Additional Interest has the meaning specified in Section 5.02 .
Additional Notes has the meaning specified in Section 2.01 .
Additional Shares has the meaning specified in Section 4.06(a) .
Affiliate of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, control, when used with respect to any specified Person means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms controlling and controlled have meanings correlative to the foregoing.
Agent Members has the meaning specified in Section 2.06(c) .
Authenticating Agent has the meaning specified in Section 14.10 .
Bankruptcy Law means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.
Bid Solicitation Agent means the Company or such other Person as may be appointed, from time to time, by the Company to solicit market bid quotations for the Notes in accordance with Section 4.01(a)(ii) .
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 or an Agent, as the case may be.
Business Day means, with respect to any Note, any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or to be closed.
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Capital Stock means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity.
Cash Settlement has the meaning specified in Section 4.03(a) .
Clause A Distribution has the meaning specified in Section 4.04(c) .
Clause B Distribution has the meaning specified in Section 4.04(c) .
Clause C Distribution has the meaning specified in Section 4.04(c) .
close of business means 5:00 p.m. (New York City time).
Closing Date means the date on which the Notes are originally issued under this Indenture.
Combination Settlement has the meaning specified in Section 4.03(a) .
Commission means the Securities and Exchange Commission.
Common Stock means the shares of common stock, par value $0.10 per share, of the Company as such shares of common stock exist on the date of this Indenture, subject to Section 4.07 .
Company means Navistar International Corporation, a Delaware corporation, and subject to the provisions of Article 6 , shall include its successors and assigns but not any of their respective subsidiaries.
Company Order means a written request or order signed in the name of the Company by two Officers of the Company.
Continuing Director means a director who either was a member of the Companys Board of Directors on October 7, 2013, or who becomes a member of the Companys Board of Directors subsequent to such date and whose appointment or election by the Companys Board of Directors or nomination for election by the Companys stockholders is approved (a) by the vote of at least a majority of the directors then still in office or whose appointment, election or nomination was previously so approved or recommended or (b) with respect to directors whose appointment or election to the Companys Board of Directors is made by the holders of the Companys non-convertible junior preference stock, series B, by the holders of such preference stock.
Conversion Agent means any conversion agent designated by the Company where Notes may be presented for conversion. The Conversion Agent shall initially be Citibank N.A.
Conversion Date has the meaning specified in Section 4.02(b) .
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Conversion Notice has the meaning specified in Section 4.02(b) .
Conversion Obligation has the meaning specified in Section 4.03(a) .
Conversion Price means, in respect of each Note, as of any date, $1,000, divided by the Conversion Rate as of such date.
Conversion Rate means, initially, 17.1233 shares of Common Stock per $1,000 principal amount of Notes, subject to adjustment as set forth herein.
Cook County Loan Agreement means the Loan Agreement, dated as of October 1, 2010, between the Company and the County of Cook, Illinois.
Corporate Trust Office means (i) with respect to the Trustee, the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Capital Markets, or such other address as the Trustee may designate from time to time by notice to the Noteholders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company), or (ii) with respect to the Agent: the principal office of the Agent at which its corporate trust business shall be administered, which office at the date hereof (A) solely for purposes of surrender for registration of transfer or exchange or for presentation for payment or repurchase or for conversion is located at 480 Washington Boulevard, 30th Floor, Jersey City, New Jersey, Attention: Global Transaction Services Navistar International Corp Convertible Notes due 2018, and (B) for all other purposes is located at 388 Greenwich St., 14th Floor, New York, New York 10013, Attention: Global Transaction Services Navistar International Corp Convertible Notes due 2018, or such other address as the Agent may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Agent (or such other address as such successor Agent may designate from time to time by notice to the Holders and the Company).
Custodian means the Paying Agent, as custodian with respect to the Notes (so long as the Notes constitute Global Notes), or any successor entity.
Daily Cash Amount has the meaning specified in Section 4.03(d) .
Daily Conversion Value means, for each of the 20 consecutive Trading Days during the Observation Period, 5% of the product of (i) the applicable Conversion Rate on such Trading Day and (ii) the Daily VWAP of the Common Stock on such Trading Day.
Daily Settlement Amount has the meaning specified in Section 4.03(d) .
Daily VWAP means, for each of the 20 consecutive Trading Days during the Observation Period, the per share volume-weighted average price as displayed
4
under the heading Bloomberg VWAP on Bloomberg page NAV <equity> AQR (or any successor thereto) 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 Common Stock on such Trading Day, determined using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for such purpose by the Company). The Daily VWAP will be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
Default means any event that is, or after notice or passage of time, or both, would be, an Event of Default.
Defaulted Interest means any interest on any Note that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date.
Depositary or Depository means, with respect to the Global Notes the Person specified in Section 2.06 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 such successor Depositary.
Designated Senior Indebtedness means (i) the Companys 8.25% Senior Notes due 2021, (ii) indebtedness under the Cook County Loan Agreement, (iii) indebtedness under the IFA Loan Agreement, (iv) the Companys guarantee of the Credit Agreement dated as of August 17, 2012, by and among Navistar, Inc., as borrower, the Company and the banks named therein and (v) any future Senior Indebtedness the principal amount of which is $15,000,000 or more and designated as such by the Company in an Officers Certificate to the Paying Agent.
Effective Date has the meaning specified in Section 4.06(c) .
Event of Default has the meaning specified in Section 5.01 .
Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Ex-Dividend Date means, in respect of any dividend or distribution, the first date upon which the shares of Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such dividend or distribution.
Fiscal Year means a fiscal year of the Company.
Free Trade Date means the date that is one year after the last date of the original issuance of the Notes.
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Fundamental Change will be deemed to have occurred at the time after the Notes are originally issued if any of the following occurs:
(1) a person or group within the meaning of Section 13(d) of the Exchange Act, other than the Company, its Subsidiaries, and its and their employee benefit plans, has become the direct or indirect beneficial owner, as defined in Rule 13d-3 under the Exchange Act, of the Companys common equity representing more than 50% of the voting power of the Companys outstanding common equity;
(2) consummation of (A) any recapitalization, reclassification or change of the Companys Common Stock (other than changes resulting from a subdivision or combination) as a result of which the Common Stock would be converted into, or exchanged for stock, other securities, other property or assets or (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 any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one of the Companys Subsidiaries; provided , however , that a transaction where the holders of all classes of the Companys common equity immediately prior to such transaction (each a pre-transaction holder) that is a share exchange, consolidation or merger 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 event shall not be a Fundamental Change, so long as the proportion of the respective ownership of each pre-transaction holder remains substantially the same relative to all other pre-transaction holders;
(3) Continuing Directors cease to constitute at least a majority of the Companys Board of Directors;
(4) the Companys stockholders approve any plan or proposal for the liquidation or dissolution of the Company; or
(5) the Common Stock (or other common stock into which the Notes are then convertible) ceases to be listed or quoted on a national securities exchange in the United States.
Notwithstanding the foregoing, a Fundamental Change as a result of clause (2) above will not be deemed to have occurred if at least 90% of the consideration received or to be received by the holders of the Common Stock, excluding cash payments for fractional shares, in connection with the transaction or transactions constituting the Fundamental Change consists of Publicly Traded Securities and as a result of such transaction or transactions the Notes become convertible into such Publicly Traded Securities, excluding cash payments for fractional shares, subject to the provisions set forth under Section 4.03 of this Indenture.
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Fundamental Change Company Notice has the meaning specified in Section 3.01(b) .
Fundamental Change Purchase Date has the meaning specified in Section 3.01(a) .
Fundamental Change Purchase Notice has the meaning specified in Section 3.01(a)(i) .
Fundamental Change Purchase Offer has the meaning specified in Section 3.01(a).
Fundamental Change Purchase Price has the meaning specified in Section 3.01(a) .
Global Note shall have the meaning specified in Section 2.06(b) .
Hedging Obligations means, with respect to the Company, the Companys obligations under (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, (ii) other agreements or arrangements designed to manage interest rates or interest rate risk, and (iii) other agreements or arrangements designed to manage or protect the Company against fluctuations in currency exchange rates or commodity prices.
Holder or Noteholder means a Person in whose name a Note is registered.
IFA Loan Agreement means the Loan Agreement, dated as of October 1, 2010, between the Company and the Illinois Finance Authority.
Indenture means this instrument, as originally executed and as supplemented from time to time by one or more indentures supplemental hereto.
Initial Notes has the meaning specified in Section 2.01 .
Initial Purchasers means the initial purchasers set forth in Schedule 1 to the Purchase Agreement.
Interest Payment Date means, with respect to the payment of interest on the Notes, each April 15 and October 15 of each year, beginning on April 15, 2014.
Last Reported Sale Price of the Common Stock on any date means the closing sale price per share of Common Stock (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the principal U.S. securities exchange on which the Common Stock is traded. If the Common Stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the Last Reported Sale Price shall be the last quoted bid price for
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the Common Stock in the over-the-counter market on the relevant date as reported by Pink OTC Markets Inc. or a similar organization. If the Common Stock is not so quoted, the Last Reported Sale Price shall be the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose.
Lien means, with respect to any property or assets, any mortgage or deed of trust, pledge, hypothecation, assignment, security interest, lien, encumbrance, or any other security arrangement of any kind or nature whatsoever on or with respect to such property or assets (including any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing).
Make-Whole Fundamental Change means any transaction or event that constitutes a Fundamental Change (determined after giving effect to any exceptions or exclusions to such definition, but without regard to the proviso in clause (2) of the definition of Fundamental Change).
Market Disruption Event means (i) a failure by the primary United States national or regional securities exchange or market on which the Common Stock is listed or admitted to trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for more than a one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Common Stock or in any options, contracts or future contracts relating to the Common Stock.
Measurement Period has the meaning specified in Section 4.01(a)(ii) .
Merger Event has the meaning specified in Section 4.07(a) .
NFC means Navistar Financial Corporation.
Note or Notes has the meaning specified in the fourth paragraph of the recitals of this Indenture, and shall include any Additional Notes issued pursuant to Section 2.01 hereof.
Note Register shall have the meaning specified in Section 2.06(a) .
Note Registrar shall have the meaning specified in Section 2.06(a) .
Observation Period with respect to any Note means (i) if the relevant Conversion Date occurs prior to April 15, 2018, and a Cash Settlement or a Combination Settlement applies, the 20 consecutive Trading Day period beginning on and including the second Scheduled Trading Day after such Conversion Date, (ii) if the relevant Conversion Date occurs on or after April 15, 2018, and regardless of the Settlement Method, the 20 consecutive Trading Days beginning on and including the 22 nd Scheduled
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Trading Day immediately preceding October 15, 2018, and (iii) notwithstanding the foregoing, if the relevant Conversion Date occurs after the date of the issuance of a Redemption Notice as described under Article 15 hereof, but prior to the close of business on the Business Day immediately preceding the applicable Redemption Date, the 20 consecutive trading-day period beginning on and including the 22nd scheduled trading day immediately preceding the applicable Redemption Date.
Offering Memorandum means the offering memorandum dated October 11, 2013 relating to the purchase and resale of the Notes.
Officer means, with respect to the Company, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary.
Officers Certificate means a certificate signed by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer or the principal 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 acceptable to the Trustee or the Agent (as the case may be) signed by legal counsel, who may be an employee of or counsel to the Company, that is delivered to the Trustee or the Agent, as the case may be. Each such opinion shall include the statements provided for in Section 14.05 if and to the extent required by the provisions of such Section.
outstanding , when used with reference to Notes, shall, subject to the provisions of Section 12.04 , mean, as of any particular time, all Notes authenticated and delivered by the Authenticating Agent under this Indenture, except:
(a) Notes theretofore canceled by the Authenticating Agent or accepted by the Authenticating Agent for cancellation;
(b) Notes, or portions thereof, for the payment or repurchase of which monies in the necessary amount shall have been deposited in trust with the Paying Agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent);
(c) Notes that have been paid pursuant to Section 2.07 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 2.07 unless proof satisfactory to the Authenticating Agent is presented that any such Notes are held by protected purchasers in due course; and
(d) Notes converted pursuant to Article 4 .
Paying Agent shall have the meaning specified in Section 9.02 .
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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 certificated Notes in definitive form that are not Global Notes.
Physical Settlement has the meaning specified in Section 4.03(a) .
Place of Payment means, for purposes of the Notes, New York, New York.
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 2.07 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.
Publicly Traded Securities means shares of common stock traded on a national securities exchange in the United States or which will be so traded or quoted when issued or exchanged in connection with a Fundamental Change.
Purchase Agreement means the purchase agreement dated as of October 7, 2013 between the Company and the Initial Purchasers.
Qualified Securitization Transaction means any transaction or series of transactions that have been or may be entered into by any of the Subsidiaries of the Company in connection with or reasonably related to a transaction or series of transactions in which any of the subsidiaries of the Company may sell, convey or otherwise transfer to
(1) a Securitization Subsidiary or
(2) any other person, or may grant a security interest in, any receivables or interests therein secured by the merchandise or services financed thereby (whether such receivables are then existing or arising in the future) of any of the subsidiaries of the Company, and any assets related thereto including, without limitation, all security or ownership interests in merchandise or services financed thereby, the proceeds of such receivables, and other assets which are customarily sold or in respect of which security interests are customarily granted in connection with securitization transactions involving such assets.
Redemption Date means the date specified for redemption of the Notes in accordance with the terms of the Notes and Article 15 .
Redemption Notice has the meaning specified in Section 15.04 .
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Redemption Price has the meaning specified in Section 15.01 .
Regular Record Date means, with respect to the payment of interest on the Notes, the April 1 (whether or not a Business Day) immediately preceding an Interest Payment Date on April 15 and the October 1 (whether or not a Business Day) immediately preceding an Interest Payment Date on October 15.
Reference Property has the meaning specified in Section 4.07(a) .
Resale Restriction Termination Date , (i) with respect to the Notes, shall have the meaning specified in the legend set forth in Section 2.04(a), and (ii) with respect to the Common Stock issued upon conversion of the Notes, shall have the meaning specified in the legend set forth in Section 2.04(b).
Responsible Officer means, when used with respect to the Trustee or the Agent (as applicable), any officer within the corporate trust department of the Trustee or the Agent (as applicable), including any vice president, assistant vice president, trust officer or any other officer of the Trustee or the Agent (as applicable) who customarily performs functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such persons knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.
Scheduled Trading Day means a day that is scheduled to be a Trading Day on the primary United States national 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.
Securitization Subsidiary means a Subsidiary of the Company existing on the date hereof or formed or acquired thereafter that engages principally in securitization transactions and in activities other than those reasonably related to or in connection with the entering into of securitization transactions:
(1) no portion of the indebtedness or any other obligations (contingent or otherwise) of which:
(i) is guaranteed by the Company or any Subsidiary of the Company,
(ii) is recourse to or obligates the Company or any Subsidiary of the Company in any way other than pursuant to representations, warranties and covenants (including those related to servicing) entered into in the ordinary course of business in connection with a Qualified Securitization Transaction (as defined below), or
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(iii) subjects any property or asset of the Company or any Subsidiary of the Company, directly or indirectly, contingently or otherwise, to any lien or to the satisfaction thereof, other than pursuant to representations, warranties and covenants (including those related to servicing) entered into in the ordinary course of business in connection with a Qualified Securitization Transaction;
(2) with which neither the Company nor any Subsidiary of the Company:
(i) provides any credit support or
(ii) has any contract, agreement, arrangement or understanding other than on terms that are fair and reasonable and that are no less favorable to the Company or such Subsidiary than could be obtained from an unrelated person (other than, in the case of subclauses (a) and (b) of this clause (2), representations, warranties and covenants (including those relating to servicing) entered into in the ordinary course of business in connection with a Qualified Securitization Transaction and intercompany notes relating to the sale of receivables to such Securitization Subsidiary); and
(3) with which neither the Company nor any Subsidiary of the Company has any obligation to maintain or preserve such Subsidiarys financial condition or to cause such Subsidiary to achieve certain levels of operating results. For purposes of the foregoing, Navistar Inc. shall not be deemed to be providing credit support to any Subsidiary of NFC that would otherwise qualify as a Securitization Subsidiary as a result of the terms of the Support Agreement in which Navistar Inc. agrees to provide credit support directly to NFC for the benefit of its lenders (but not any other provisions).
Senior Indebtedness means, in respect of the Company, whether now or hereafter incurred:
(i) the principal, premium, if any, interest and all other amounts owed in respect of the Companys (A) indebtedness for money borrowed and (B) indebtedness evidenced by securities, debentures, bonds or other similar instruments;
(ii) all of the Companys capital lease obligations;
(iii) all obligations issued or assumed by the Company as the deferred purchase price of property, all of the Companys conditional sale obligations and all of the Companys obligations under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business);
(iv) all of the Companys obligations for the reimbursement of any letter of credit, bankers acceptance, security purchase facility or similar credit transaction;
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(v) all obligations of the type referred to in clauses (i) through (iv) above of other Persons for the payment of which the Company is responsible or liable as obligor, guarantor or otherwise;
(vi) all obligations of the type referred to in clauses (i) through (v) above of other Persons secured by any lien on any of the Companys properties or assets (whether or not such obligation is assumed by the Company); and
(vii) all Hedging Obligations,
except for (x) any such indebtedness that is by its terms subordinated to or pari passu with the Notes or is subordinated to any other indebtedness, (y) any indebtedness between or among the Company or affiliates of the Company, including all other debt securities and guarantees in respect of those debt securities issued to any trust, or trustees of such trust, partnership or other entity affiliated with the Company that is, directly or indirectly, a financing vehicle of the Company (a Financing Entity ) in connection with the issuance by such Financing Entity of preferred securities or other securities that rank pari passu with, or junior to, the Notes and (z) accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities).
Senior Indebtedness Default Notice has the meaning specified in Section 8.03(a) .
Senior Subordinated Indebtedness means, with respect to the Company, the Notes, the Companys 3.0% Senior Subordinated Convertible Notes due 2014 and any other indebtedness of the Company that specifically provides that such indebtedness is to have the same rank as the Notes in right of payment and is not subordinated by its terms in right of payment to any indebtedness or other obligation of the Company that is not Senior Indebtedness.
Settlement Method means any of Cash Settlement, Physical Settlement or Combination Settlement.
Significant Subsidiary of any Person means any significant subsidiary of such Person within the meaning of Article 1, Rule 1-02(w) of Regulation S-X promulgated under the Securities Act.
Spin-Off has the meaning specified in Section 4.04(c) .
Stated Maturity means, with respect to any Note and the payment of the principal amount thereof, October 15, 2018.
Stock Price has the meaning specified in Section 4.06(b) .
Subordinated Indebtedness means, with respect to the Company, any indebtedness of the Company that specifically provides that such indebtedness is subordinated to the Notes.
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Subordinated Obligations has the meaning set forth in Section 8.01 hereof.
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.
Support Agreement means the side agreement dated as of July 1, 2005, as amended to the date of hereof between the Company and Navistar, Inc. (formerly known as International Truck and Engine Corporation), as it may be amended, modified, supplemented, restated or renewed from time to time; provided that such agreement shall not be amended, modified, supplemented, restated or renewed in a manner adverse in any material respect to the interests of the Company and its Subsidiaries taken as a whole.
Trading Day means, except as otherwise provided in Section 4.03(g) , a day on which (i) 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 Exchange, on the principal other United States national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a United States national or regional securities exchange, in the principal other market on which the Common Stock is then traded, and (ii) a Last Reported Sale Price for the Common Stock is available on such securities exchange or market. If the Common Stock (or other security for which a closing sale price must be determined) is not so listed or traded, 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 the Notes at approximately 3:30 p.m., New York City time, on such determination date from three independent nationally recognized securities dealers selected by the Company; provided that, if three bids cannot reasonably be obtained by the Bid Solicitation Agent but only 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 the Notes from a nationally recognized securities dealer, then the Trading Price per $1,000 principal amount of Notes will be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate.
Trading Price Condition has the meaning specified in Section 4.01(a)(ii) .
Trigger Event has the meaning specified in Section 4.04(c) .
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Trustee means the Person named as the Trustee in the first paragraph of this Indenture until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter Trustee shall mean or include each Person who is then a Trustee hereunder.
U.S. means the United States of America.
Valuation Period has the meaning specified in Section 4.04(c) .
ARTICLE 2
THE SECURITIES
SECTION 2.01. Designation and Amount. The Notes shall be designated as the 4.50% Convertible Senior Notes due 2018 . The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is limited to $200,000,000 (or $230,000,000 if the Initial Purchasers exercise their option to purchase additional Notes in full as set forth in the Purchase Agreement) (the Initial Notes ), except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of other Notes pursuant to Section 2.06 , Section 2.07 , Section 3.04 , Section 4.02 and Section 7.04 hereof.
The principal amount of Notes then outstanding shall be payable at Stated Maturity.
The Company may, without the consent of the Holders of the Notes, hereafter issue additional notes ( Additional Notes ) under the Indenture with the same terms (other than payment by the purchaser of interest accrued from the date hereof or the most recent Interest Payment Date, as applicable, to but excluding the issue date of such Additional Notes) and with the same CUSIP numbers (except to the extent necessary for securities law purposes) as the Initial Notes in an unlimited aggregate principal amount; provided that such Additional Notes must be part of the same issue as the Initial Notes for federal income tax purposes. Any such Additional Notes shall constitute a single series together with the Initial Notes for all purposes hereunder, including, without limitation, for purposes of any waivers, supplements or amendments to the Indenture requiring the approval of Holders of the Notes and any offers to purchase the Notes.
SECTION 2.02. Form of Notes . The Notes and the Authenticating Agents certificate of authentication to be borne by such Notes shall be substantially in the respective forms set forth in Exhibit A, which are incorporated in and made a part of this Indenture.
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.
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Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends or endorsements as the officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, or to conform to usage or to indicate any special limitations or restrictions to which any particular Notes are subject.
The Global Note shall represent such principal amount of the outstanding Notes as shall be specified therein and shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be increased or reduced to reflect repurchases, conversions, transfers or exchanges permitted hereby. Any endorsement of the Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Transfer Agent or the Custodian, at the direction of the Paying Agent, in such manner and upon instructions given by the holder of such Notes in accordance with this Indenture. Payment of principal, accrued and unpaid interest, and premium, if any (including any Fundamental Change Purchase Price or the Redemption Price in connection with an optional redemption), on the 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.
The Form of Note, the Form of Notice of Conversion, the Form of Fundamental Change Purchase Notice and the Form of Assignment and Transfer shall be substantially as set forth in Exhibits A, B, C and D, respectively, hereto, which are incorporated into and shall be deemed a part of this Indenture, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or as may, consistently herewith, be determined to be necessary or appropriate by the officers of the Company executing such Notes, as evidenced by their execution of the Notes.
SECTION 2.03. Date and Denomination of Notes; Payments of Interest . (a) The Notes shall be issuable in registered form without coupons in denominations of $1,000 principal amount and integral multiples thereof. Each Note shall be dated the date of its authentication and shall bear interest from the date specified on the face of the form of Note attached as Exhibit A hereto. Interest on the Notes shall be computed on the basis of a 360-day year comprised of twelve 30-day months.
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
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any Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date. Interest shall be payable at the office or agency of the Company maintained by the Company for such purposes, which shall initially be the Corporate Trust Office of the Paying Agent. The Company shall pay interest (a) on any Notes in certificated form by wire transfer in immediately available funds to that Persons account within the United States (which account is specified in writing by such Person at least three Business Days prior to such payment), which application shall remain in effect until such Person notifies, in writing, the Note Registrar to the contrary, or (b) on any Global Note by wire transfer of immediately available funds to the account of the Depositary or its nominee.
Any Defaulted Interest shall forthwith cease to be payable to the Noteholder on the relevant Regular Record Date by virtue of its having been such Noteholder, and such Defaulted Interest shall be paid by the Company, at its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest 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 Interest, which shall be fixed in the following manner. The Company shall notify the Trustee and the Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment (which shall be not less than 40 days after the receipt by the Trustee and the Paying Agent of such notice, unless the Trustee and the Paying Agent shall consent to an earlier date), and at the same time the Company shall deposit with the Paying Agent an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Paying Agent 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 Interest as in this clause provided. Thereupon the Company shall fix a special record date for the payment of such Defaulted Interest which shall be not more than fifteen days and not less than ten days prior to the date of the proposed payment, and not less than ten days after the receipt by the Trustee and the Paying Agent of the notice of the proposed payment. The Company shall promptly notify the Trustee and the Paying Agent in writing of such special record date and the Trustee and the Paying Agent, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first-class postage prepaid, to each holder at its address as it appears in the Note Register, not less than ten days prior to such special record date. Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names 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 (2) of this Section 2.03 .
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(2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, and upon such notice as may be required by such exchange or automated quotation system, if, after notice given by the Company to the Trustee and the Paying Agent of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Paying Agent.
SECTION 2.04. Rule 144A Information . (a) Every Note that bears or is required under this Section 2.04(a) to bear the legend set forth in this Section 2.04(a) (together with any Common Stock issued upon conversion of the Notes and required to bear the legend set forth in Section 2.04(b) , collectively, the Restricted Securities ) shall be subject to the restrictions on transfer set forth in this Section 2.04(a) (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 with written notice to the Trustee and the Paying Agent as provided below. The Holder of each such Restricted Security, by such Holders acceptance thereof, agrees to be bound by all such restrictions on transfer. As used in this Section 2.04(a) and Section 2.04(b) , the term transfer encompasses any sale, pledge, transfer or other disposition whatsoever of any Restricted Security.
Until the Resale Restriction Termination Date, 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 2.04(b) , 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 and the Paying Agent):
THIS NOTE AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS NOTE 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 PRIOR TO THE RESALE RESTRICTION TERMINATION DATE 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
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(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 (D) ABOVE, THE COMPANY, THE TRUSTEE, AND THE PAYING AGENT RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THE RESALE RESTRICTION TERMINATION DATE MEANS THE LATER OF: (A) THE DATE THAT IS ONE YEAR AFTER THE LAST ORIGINAL ISSUANCE DATE OF THE NOTES OR SUCH SHORTER PERIOD OF TIME PERMITTED BY RULE 144 OR ANY SUCCESSOR PROVISION THERETO; AND (B) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW.
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) as to which such restrictions on transfer shall have expired in accordance with their terms may, upon surrender of such Note for exchange to the Note Registrar in accordance with the provisions of this Section 2.04(a) , 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 2.04(a) and shall not be assigned a restricted CUSIP number. No later than the fifth day immediately following the Free Trade Date, the Company shall cause every beneficial interest in any Note represented by a Global Note that bears the restricted legend specified in this Section 2.04(a) to be automatically exchanged for beneficial interests in a Global Note that shall not bear such restrictive legend and shall not be assigned a restricted CUSIP number. To effect such exchange, the Company (A) will deliver to the Depositary an instruction letter for the Depositarys mandatory exchange process at least 15 days immediately prior to the Free Trade Date and (B) will deliver to each of the Trustee and the Note Registrar a duly completed free transferability certificate in the form set forth on Exhibit E (the Free Transferability Certificate ) promptly upon the occurrence of the Free Trade Date. Upon receipt of the Free Transferability Certificate by the Trustee and the Note Registrar, the legend set forth above shall be deemed removed from each Global Note specified in the Free Transferability Certificate and the restricted CUSIP number shall be deemed removed from each such Global Note and deemed replaced with an unrestricted CUSIP number, with no further action required by the Company, the Trustee, the Note Registrar, or, if applicable, the Depositary. Prior
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to the Companys delivery of the Free Transferability Certificate and afterwards, the Company, the Trustee, and the Note Registrar will comply with the rules and procedures of the Depositary and otherwise use reasonable efforts to cause each Global Note to be identified by an unrestricted CUSIP number in the facilities of the Depositary by the Free Trade Date or as promptly as possible thereafter. In addition, on the Free Trade Date or promptly thereafter, the Company, or the Trustee upon written instruction by the Company, will provide Bloomberg L.P. with a copy of the Free Transferability Certificate and will use reasonable efforts to cause Bloomberg L.P. to adjust its screen page for the Notes to indicate that the Notes are no longer Restricted Securities and are now identified by an unrestricted CUSIP number. Notwithstanding anything to the contrary in this paragraph, the Company will not be required to deliver or provide the Free Transferability Certificate if it reasonably believes that removal of the restrictive legend or the changes to the CUSIP number for the Notes could result in or facilitate transfers of the Notes in violation of applicable law; provided that, this sentence does not limit the application of Section 9.10 .
The Company shall promptly notify the Trustee, the Agent, and the Holders in writing 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.
(b) 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 Transfer Agent and any other transfer agent for the Common Stock):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT ), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO THE RESALE RESTRICTION TERMINATION DATE 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
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(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 (D) ABOVE, THE COMPANY AND THE TRANSFER AGENT FOR THE COMPANYS COMMON STOCK RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THE RESALE RESTRICTION TERMINATION DATE MEANS THE LATER OF: (A) THE DATE THAT IS ONE YEAR AFTER THE LAST ORIGINAL ISSUANCE DATE OF THE COMPANYS 4.50% SENIOR SUBORDINATED CONVERTIBLE NOTES DUE 2018 OR SUCH SHORTER PERIOD OF TIME PERMITTED BY RULE 144 OR ANY SUCCESSOR PROVISION THERETO; AND (B) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW.
Any such Common Stock as to which such restrictions on transfer shall have expired in accordance with their terms 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 2.04(b) .
(c) The Company shall not, and shall not permit any of the affiliates (as defined in Rule 144) it controls to, resell any of the Notes that constitute restricted securities under Rule 144 that have been reacquired by any of them.
SECTION 2.05. Execution, Authentication and Delivery of Notes. The Notes shall be signed in the name and on behalf of the Company by the manual or facsimile signature of its Chief Executive Officer, President, Treasurer, Secretary or any of its 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 Authenticating Agent for authentication, together with a Company Order for the authentication and delivery of such Notes, which order shall set forth the number of separate Note certificates, the principal amount of each of the Notes to be authenticated, the date on which the original issuance of Notes is to be authenticated, the registered holders of the said Notes and delivery instructions, and the Authenticating Agent in accordance with such Company Order shall authenticate and deliver such Notes.
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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 Authenticating Agent, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the 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 Authenticating Agent, 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 proper officers of the Company, although at the date of the execution of this Indenture any such person was not such an officer.
SECTION 2.06. Exchange and Registration of Transfer of Notes; Depositary. (a) The Company shall cause to be kept at the Corporate Trust Office of the Agent a register (the register maintained in such office or in any other office or agency of the Company designated pursuant to Section 9.02 being herein sometimes collectively referred to as the Note Register ) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes and of transfers of Notes. Such register shall be in written form or in any form capable of being converted into written form within a reasonable period of time. The Company initially appoints Citibank, N.A. as Note Registrar for the purpose of registering Notes and transfers of Notes as herein provided. The Company may appoint one or more co-registrars in accordance with Section 9.02 .
Upon surrender for registration of transfer of any Note to the Note Registrar or any co-registrar, and satisfaction of the requirements for such transfer set forth in this Section 2.06 , the Company shall execute, and the Authenticating Agent 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 9.02 . Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Authenticating Agent shall authenticate and deliver, the Notes that the holder making the exchange is entitled to receive, bearing registration numbers not contemporaneously outstanding.
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All Notes presented or surrendered for registration of transfer or for exchange, repurchase or conversion shall (if so required by the Company, the Transfer Agent, the Paying Agent, the Conversion Agent, the Note Registrar or any co-registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and duly executed by the holder thereof or its attorney-in-fact duly authorized in writing.
No service charge shall be charged to the Noteholder for any exchange or registration of transfer of Notes, but the Company, the Agent, or the Trustee may require payment of a sum sufficient to cover any tax, assessments or other governmental charges that may be imposed in connection therewith as a result of the name of the holder of the new Notes issued upon such exchange or registration of transfer of Notes being different from the name of the holder of the old Notes presented or surrendered for such exchange or registration of transfer.
None of the Company, the Trustee, the Agent, the Note Registrar or any co-registrar shall be required to exchange or register a transfer of (i) any Notes surrendered for conversion or, if a portion of any Note is surrendered for conversion, such portion thereof surrendered for conversion or (ii) any Notes, or a portion of any Note, surrendered for repurchase (and not withdrawn) in accordance with Article 3 hereof.
All Notes issued upon any registration of transfer or exchange of Notes in accordance with this Indenture shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.
(b) So long as the Notes are eligible for book-entry settlement with the Depositary, unless otherwise required by law, all Notes shall be represented by one or more Notes in global form (each, a Global Note ) registered in the name of the Depositary or the nominee of the Depositary. The transfer and exchange of beneficial interests in a Global Note that does not involve the issuance of a Physical Note shall be effected through the Depositary (but not the Transfer Agent, the Paying Agent, the Trustee or the Custodian) in accordance with this Indenture and the procedures of the Depositary therefor.
(c) Members of, or participants in, the Depositary ( Agent Members ) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary or under the Global Note, and the Depositary (including, for this purpose, its nominee) may be treated by the Company, the Transfer Agent, the Paying Agent, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Note for all purposes whatsoever.
(d) Notwithstanding any other provisions of this Indenture (other than the provisions set forth in this Section 2.04(a) ), 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
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the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary and (ii) for transfers of portions of a Global Note in certificated form made upon request of a member of, or a participant in, the Depositary (for itself or on behalf of a beneficial owner) by written notice given to the Trustee and the Agent by or on behalf of the Depositary in accordance with customary procedures of the Depositary and in compliance with this Section 2.04(a) .
The Depositary shall be a clearing agency registered under the Exchange Act. The Company initially appoints The Depository Trust Company ( DTC ) 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 Paying Agent as custodian for Cede & Co. Neither the Trustee, the Agent nor any agent thereof shall have any responsibility or liability for any actions taken or not taken by the Depositary.
If (i) the Depositary notifies the Company at any time that the Depositary is unwilling or unable to continue as depositary for the Global Notes and a successor depositary is not appointed within 90 days, (ii) the Depositary ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days, or (iii) an Event of Default with respect to the Notes has occurred and is continuing and a beneficial owner of any Note requests that its beneficial interest therein be issued as a Physical Note, the Company shall execute, and the Authenticating Agent, upon receipt of an Officers Certificate and a Company Order for the authentication and delivery of Notes, shall authenticate and deliver (x) in the case of clause (iii), a Physical Note to such beneficial owner in a principal amount equal to the principal amount of such Note corresponding to such beneficial owners 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 Paying Agent such Global Notes shall be canceled.
Physical Notes issued in exchange for all or a part of the Global Note pursuant to this Section 2.06 (d) 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, shall instruct the Note Registrar. Upon execution and authentication, the Agent shall deliver such Physical Notes to the Persons in whose names such Physical Notes are so registered.
At such time as all interests in a Global Note have been converted, canceled, repurchased or transferred, such Global Note shall be, upon receipt thereof, canceled by the Paying Agent in accordance with standing procedures and existing instructions between the Depositary and the Custodian. At any time prior to such cancellation, if any interest in a Global Note is exchanged for Physical Notes, converted, canceled, repurchased or transferred to a transferee who receives Physical Notes therefor or any Physical Note is exchanged or transferred for part of such Global Note, the principal amount of such Global Note shall, in accordance with standing procedures and existing instructions between the Depositary and the Custodian, be appropriately reduced
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or increased, as the case may be, and an endorsement shall be made on the Schedule of Exchanges of such Global Note, by the Transfer Agent or the Custodian, at the direction of the Paying Agent, to reflect such reduction or increase.
None of the Company, the Agent, the Trustee nor any agent of the Company, the Agent, or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Note or maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Notes. In case any Note shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon its written request the Authenticating Agent shall authenticate and deliver, a new Note, bearing a 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 and the 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 Agent 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 Authenticating Agent may authenticate any such substituted Note and deliver the same upon the receipt of such security or indemnity as the Trustee, the Agent, and the Company may require. Upon the issuance of any substitute Note, the Company or the Agent may require the payment by the holder of a sum sufficient to cover any tax, assessment or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. In case any Note that has matured or is about to mature or has been tendered for repurchase upon a Fundamental Change or in connection with an optional redemption or is about to be converted into cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable, 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, the Transfer Agent, the Paying Agent, the Conversion Agent, 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, including without limitation if a Note is replaced and subsequently presented or claimed for payment and, in every case of destruction, loss or theft, evidence satisfactory to the Company, the Transfer Agent, the Trustee and, if applicable, any Paying Agent or Conversion Agent evidence of their satisfaction of the destruction, loss or theft of such Note and of the ownership thereof.
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Every substitute Note issued pursuant to the provisions of this Section 2.07 by virtue of the fact that any Note is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note shall be found at any time, and shall be entitled to all the benefits of (but shall be subject to all the limitations set forth in) this Indenture equally and proportionately with any and all other Notes duly issued hereunder. To the extent permitted by law, all Notes shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment or conversion or repurchase of mutilated, destroyed, lost or stolen Notes and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment or conversion of negotiable instruments or other securities without their surrender.
SECTION 2.08. Temporary Notes. Pending the preparation of Notes in certificated form, the Company may execute and the Authenticating Agent shall, upon written request of the Company, authenticate and deliver temporary Notes (printed or lithographed). Temporary Notes shall be issuable in any authorized denomination, and substantially in the form of the Notes in certificated form 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 Authenticating Agent upon the same conditions and in substantially the same manner, and with the same effect, as the Notes in certificated form. Without unreasonable delay the Company will execute and deliver to the Authenticating Agent Notes in certificated form (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 9.02 and the Authenticating Agent shall authenticate and deliver in exchange for such temporary Notes an equal aggregate principal amount of Notes in certificated form. 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 Notes in certificated form authenticated and delivered hereunder.
SECTION 2.09. Cancellation of Notes Paid, Etc. All Notes surrendered for the purpose of payment, repurchase, conversion, exchange or registration of transfer, shall, if surrendered to the Company or any Paying Agent or any Note Registrar or any Conversion Agent, be surrendered to the Paying Agent and promptly canceled by it, and no Notes shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Paying Agent shall dispose of canceled Notes in accordance with its customary procedures. If the Company shall acquire any of the Notes, such acquisition shall not operate as satisfaction of the Indebtedness represented by such Notes unless and until the same are delivered to the Paying Agent for cancellation.
SECTION 2.10. CUSIP Numbers. In issuing the Notes, the Company may use CUSIP numbers (if then generally in use), and, if so, the Trustee and/or any Agent shall use CUSIP numbers in notices issued to Holders of the Notes as a convenience to them; 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
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notice and that reliance may be placed only on the other identification numbers printed on the Notes. The Company will promptly notify the Trustee and all Agents in writing of any change in the CUSIP numbers.
SECTION 2.11. Repurchases. The Company may from time to time repurchase the Notes in open market purchases or otherwise without prior notice to Holders of Notes. Any Notes repurchased by the Company will be immediately retired and not be outstanding for any purpose under this Indenture.
ARTICLE 3
FUNDAMENTAL CHANGES AND PURCHASES THEREUPON
SECTION 3.01. Purchase at Option of Holders Upon a Fundamental Change. (a) Generally . If a Fundamental Change occurs at any time prior to October 15, 2018, then each Holder of Notes shall have the right, at such Holders option, to require the Company to purchase for cash any or all of such Holders Notes, or any portion of the principal amount thereof, that is equal to $1,000 or a multiple of $1,000, on a date specified by the Company that is no earlier than the 20th calendar day following the date of, and no later than the 35th calendar day following the date of, delivery of the Fundamental Change Company Notice (as defined below) (the Fundamental Change Purchase Date ), at a purchase price equal to 100% of the principal amount thereof, together with accrued and unpaid interest thereon to, but excluding, the Fundamental Change Purchase Date (the Fundamental Change Purchase Price ); provided, however , that if a Fundamental Change Purchase Date is after a Regular Record Date and on or prior to the Interest Payment Date to which such Regular Record Date relates, the interest payable in respect of such Interest Payment Date shall be payable to the Holders of record as of the corresponding Regular Record Date and the Fundamental Change Purchase Price shall be equal to 100% of the principal amount of the Notes to be purchased pursuant to this Article 3 . Any Notes purchased by the Company will be paid for in cash. The requirement for the Company to purchase any Notes on the Fundamental Change Purchase Date will be subject to extension to comply with applicable law.
Purchases of Notes under this Section 3.01 shall be made, at the option of the Holder thereof, upon:
(i) delivery to the Paying Agent by a Holder of a duly completed notice (the Fundamental Change Purchase Notice ) in the form set forth on the reverse of the Note as Exhibit C thereto, if the Notes are Physical Notes, or in compliance with the Depositarys procedures for tendering interests in Global Notes, if the Notes are not Physical Notes, in each case prior to the close of business on the Business Day immediately preceding the Fundamental Change Purchase Date; and
(ii) delivery of the Notes, in the case of Physical Notes, to the Paying Agent appointed by the Company (together with all necessary endorsements for transfer), or book-entry transfer of the Notes, in compliance with the procedures of the Depositary, such delivery or transfer being a condition to receipt by the Holder of the Fundamental Change Purchase Price therefor;
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provided , however , that the Company shall have no obligation to deliver a Fundamental Change Company Notice or to purchase Notes pursuant to this Article 3 if:
(A) a third party delivers such notice and makes a fundamental change purchase offer (a Fundamental Change Purchase Offer ) in the manner, at the times and otherwise in compliance with the requirements set forth in this Article 3 applicable to a Fundamental Change Purchase Offer made by the Company and purchases all Notes properly tendered and not withdrawn under the fundamental change purchase offer;
(B) prior to or simultaneously with the Fundamental Change a Redemption Notice has been given pursuant to Article 15 hereof (unless and until there is a default in the payment of the applicable Redemption Price); or
(C) if the Companys obligations under this Indenture are discharged as described under Section 13.01 hereof on or promptly following the Fundamental Change.
The Fundamental Change Purchase Notice in respect of any Notes to be purchased shall state:
(i) if such Notes are Physical Notes, the certificate numbers of such Notes, or if such Notes are in global form, the Fundamental Change Purchase Notice must also comply with appropriate procedures of the Depositary;
(ii) the portion of the principal amount of such Notes, which must be $1,000 or a multiple thereof; and
(iii) that such Notes are to be purchased by the Company pursuant to the applicable provisions of the Notes and this Indenture.
A Fundamental Change Purchase Offer may be made in advance of a Fundamental Change and may be conditional upon the occurrence of a Fundamental Change if a definitive agreement is in place for the Fundamental Change at the time the Fundamental Change Purchase Offer is made.
Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Fundamental Change Purchase Notice contemplated by this Section 3.01 shall have the right to withdraw, in whole or in part, such Fundamental Change Purchase Notice at any time prior to the close of business on the Business Day immediately preceding the Fundamental Change Purchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 3.03 below.
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The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Purchase Notice or written notice of withdrawal thereof.
(b) Fundamental Change Company Notice . On or before the 20th calendar day after the occurrence of a Fundamental Change, the Company shall provide to all Holders of the Notes, the Trustee and the Paying Agent (in the case of any Paying Agent other than the Trustee) a notice (the Fundamental Change Company Notice ) of the occurrence of such Fundamental Change and of the purchase right at the option of the Holders arising as a result thereof. Such notice shall be sent by first class mail or, in the case of any Global Notes, in accordance with the procedures of the Depositary for providing notices. Simultaneously with providing such Fundamental Change Company Notice, the Company shall issue a press release or publish a notice containing the information included therein or shall publish such information on the Companys website or through such other public medium as the Company may use at such time.
Each Fundamental Change Company Notice shall specify:
(i) the events causing a Fundamental Change;
(ii) the date of the Fundamental Change;
(iii) the last date on which a Holder of Notes may exercise the repurchase right pursuant to this Article 3 ;
(iv) the Fundamental Change Purchase Price;
(v) the Fundamental Change Purchase Date;
(vi) the name and address of the Paying Agent and the Conversion Agent, if applicable;
(vii) if applicable, the applicable Conversion Rate and any adjustments to the applicable Conversion Rate;
(viii) if applicable, that the Notes with respect to which a Fundamental Change Purchase Notice has been delivered by a Holder may be converted only if the Holder withdraws the Fundamental Change Purchase Notice in accordance with the Indenture; and
(ix) the procedures that Holders must follow to require the Company to purchase their Notes.
No failure of the Company to give the foregoing notices and no defect therein shall limit the purchase rights of the Holders of Notes or affect the validity of the proceedings for the purchase of the Notes pursuant to this Section 3.01 .
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(c) No Payment During Events of Default . There shall be no purchase of any Notes pursuant to this Section 3.01 if there has occurred and is continuing an Event of Default with respect to the Notes (other than an Event of Default that is cured by the payment of the Fundamental Change Purchase Price of the Notes). The Paying Agent will promptly return to the respective Holders thereof any Physical Notes held by it during the continuance of an Event of Default (other than an Event of Default that is cured by the payment of the Fundamental Change Purchase Price with respect to the Notes) and shall deem canceled any instructions for book-entry transfer of the Notes in compliance with the procedures of the Depositary, in which case, upon such return and cancellation, the Fundamental Change Purchase Notice with respect thereto shall be deemed to have been withdrawn.
SECTION 3.02. Effect of Fundamental Change Purchase Notice. Upon receipt by the Paying Agent of the Fundamental Change Purchase Notice specified in Section 3.01 hereof, the Holder of the Note in respect of which such Fundamental Change Purchase Notice was given shall (unless such Fundamental Change Purchase Notice is withdrawn in accordance with Section 3.03 hereof) thereafter be entitled to receive solely the Fundamental Change Purchase Price in cash with respect to such Note. Such Fundamental Change Purchase Price shall be paid to such Holder, subject to receipt of funds by the Paying Agent, on the later of (x) the Fundamental Change Purchase Date with respect to such Note ( provided the conditions in Section 3.01 hereof have been satisfied) and (y) the time of delivery or book-entry transfer of such Note to the Paying Agent by the Holder thereof in the manner required by Section 3.01 hereof.
SECTION 3.03. Withdrawal of Fundamental Change Purchase Notice. A Fundamental Change Purchase Notice may be withdrawn (in whole or in part) by means of a written notice of withdrawal delivered to the Paying Agent in accordance with the Fundamental Change Company Notice at any time prior to the close of business on the date that is at least two Business Days prior to the Fundamental Change Purchase Date, specifying:
(i) the principal amount of the Notes with respect to which such notice of withdrawal is being submitted;
(ii) if Physical Notes have been issued, the certificate numbers of the withdrawn Notes, or if Physical Notes have not been issued, the notice must comply with appropriate procedures of the Depositary; and
(iii) the principal amount, if any, of such Notes that remains subject to the original Fundamental Change Purchase Notice, which portion must be in principal amounts of $1,000 or a multiple of $1,000.
The Paying Agent will promptly return to the respective Holders thereof any Physical Notes with respect to which a Fundamental Change Purchase Notice has been withdrawn in compliance with the provisions of this Section 3.03 .
SECTION 3.04. Deposit of Fundamental Change Purchase Price. Prior to 11:00 a.m. (local time in The City of New York) on the date that is at least one Business Day prior to the date on the Fundamental Change Purchase Date, the Company
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shall deposit with the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of them is acting as the Paying Agent, shall segregate and hold in trust as provided herein) an amount of money (in immediately available funds if deposited on such Business Day) sufficient to pay the Fundamental Change Purchase Price of all the Notes or portions thereof that are to be purchased as of the Fundamental Change Purchase Date; provided , however , that to the extent any such funds are received by the Paying Agent from the Company after 11:00 a.m. (local time in The City of New York) on such date, such funds will be deemed to have been deposited within one Business Day of the receipt thereof. If the Paying Agent holds cash sufficient to pay the Fundamental Change Purchase Price of the Notes for which a Fundamental Change Purchase Notice has been tendered and not withdrawn in accordance with this Indenture on the Fundamental Change Purchase Date, then as of such Fundamental Change Purchase Date, (a) such Notes will cease to be outstanding and interest will cease to accrue thereon (whether or not book-entry transfer of such Notes is made or such Notes have been delivered to the Paying Agent) and (b) all other rights of the Holders in respect thereof will terminate (other than the right to receive the Fundamental Change Purchase Price and previously accrued and unpaid interest upon delivery or book-entry transfer of such Notes).
SECTION 3.05. Notes Purchased in Whole or in Part. Any Note that is to be purchased, whether in whole or in part, shall be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so requires in the case of Physical Notes, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holders attorney duly authorized in writing) and the Company shall execute and the Authenticating Agent shall authenticate and deliver to the Holder of such Note, without service charge, a new Note or Notes, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Note so surrendered that is not purchased.
SECTION 3.06. Covenant to Comply With Applicable Laws Upon Purchase of Notes. In connection with any offer to purchase Notes under Section 3.01 hereof, the Company shall, in each case if required, (i) comply with Rule 13e-4, Rule 14e-1 and any other 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 so as to permit the rights and obligations under Section 3.01 to be exercised in the time and in the manner specified in Section 3.01 , and shall not be deemed to have breached its obligations under the Indenture by virtue of its compliance with such securities laws or regulations.
SECTION 3.07. Repayment to the Company. To the extent that the aggregate amount of cash deposited by the Company pursuant to Section 3.04 exceeds the aggregate Fundamental Change Purchase Price of the Notes or portions thereof that the Company is obligated to purchase as of the Fundamental Change Purchase Date, then, following the Fundamental Change Purchase Date, the Paying Agent shall promptly return any such excess to the Company.
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ARTICLE 4
CONVERSION
SECTION 4.01. Right to Convert. (a) Subject to and upon compliance with the provisions of this Indenture, each Holder of Notes shall have the right, at such Holders option, to convert the principal amount of any such Notes, or any portion of such principal amount equal to $1,000 or a multiple of $1,000 thereof, at the Conversion Rate in effect on the Conversion Date for such Notes, (x) prior to April 15, 2018, only upon satisfaction of one or more of the conditions described in clauses (i) through (v) below and (y) on or after April 15, 2018, at any time prior to the close of business on the second Scheduled Trading Day immediately preceding October 15, 2018 irrespective of the conditions described in clauses (i) through (v) below:
(i) Prior to April 15, 2018, a Holder of Notes may surrender all or a portion of its Notes for conversion during any fiscal quarter (and only during such fiscal quarter) commencing after October 31, 2013, if the Last Reported Sale Price of the Common Stock for at least 20 Trading Days (whether or not consecutive) during the period of 30 consecutive Trading Days ending on the last Trading Day of the immediately preceding fiscal quarter is greater than or equal to 130% of the applicable Conversion Price in effect on each applicable Trading Day. The Company shall notify the Trustee and the Conversion Agent if the Notes become convertible in accordance with this Section 4.01 (a)(i) .
(ii) Prior to April 15, 2018, a Holder of Notes may surrender its Notes for conversion during the five Business Day period after any five consecutive Trading Day period (the Measurement Period ) in which the Trading Price per $1,000 principal amount of Notes, as determined following a request by a Holder of Notes in accordance with the procedures set forth in this Section 4.01(a)(ii) , for each Trading Day of such period was less than 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate on such Conversion Date (the Trading Price Condition ). The Bid Solicitation Agent shall have no obligation to determine the Trading Price of the Notes in accordance with this Section 4.01(a)(ii) unless requested by the Company, and the Company shall have no obligation to make such request unless a Holder of Notes provides the Company with reasonable evidence that the Trading Price per $1,000 principal amount of Notes would be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate. The Company shall instruct the Bid Solicitation Agent to determine (or, if the Company is then acting as Bid Solicitation Agent, the Company shall determine) the Trading Price of the Notes beginning on the next Trading Day promptly following the receipt of such evidence and on each successive Trading Day until such Trading Day on which 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 applicable Conversion Rate. If the Company does not so instruct the Bid Solicitation Agent to obtain (or, if the Company is then acting as Bid Solicitation Agent, the Company does not obtain) bids when required, the Trading Price per
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$1,000 principal amount of the Notes shall be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate on each day the Company fails to do so. If the Trading Price Condition has been met, the Company shall so notify Holders, the Trustee and the Conversion Agent. If, at any time after the Trading Price Condition 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 Holders, the Trustee and the Conversion Agent.
(iii) If the Company elects to:
(A) issue to all or substantially all holders of Common Stock rights or warrants entitling them for a period of not more than 45 calendar days after the date of such issuance to subscribe for or purchase shares of Common Stock at less than the average of the Last Reported Sale Prices of a share of Common Stock for the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the date of announcement of such issuance; or
(B) distribute to all or substantially all holders of Common Stock assets, debt securities or rights to purchase securities of the Company, which distribution has a per share value, as reasonably determined by the Board of Directors, exceeding 10% of the Last Reported Sale Price of the Common Stock on the Trading Day preceding the date of announcement for such distribution,
then, in each case, the Company shall notify the Holders of the Notes at least 45 Scheduled Trading Days prior to the Ex-Dividend Date for such issuance or distribution. Once the Company has given such notice, Holders may surrender Notes for conversion at any time until the earlier of the close of business on the Business Day immediately prior to such Ex-Dividend Date or the Companys announcement that such issuance or distribution will not take place, even if the Notes are not otherwise convertible at such time.
(iv) If a transaction or event that constitutes a Fundamental Change or a Make-Whole Fundamental Change occurs, regardless of whether a Holder has the right to require the Company to purchase the Notes pursuant to Article 3 hereof, or if the Company is a party to a consolidation, merger, binding share exchange, or sale, transfer or lease of all or substantially all of the Companys assets, in each case, pursuant to which the Common Stock would be converted into cash, securities or other assets, Holders may surrender Notes for conversion at any time from or after the date which is 45 Scheduled Trading Days prior to the anticipated effective date of such transaction until 35 Trading Days after the actual effective date of such transaction (or, if such transaction also constitutes a Fundamental Change, until the related Fundamental Change Purchase Date). The Company shall notify Holders, the Conversion Agent and the Trustee as promptly as
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practicable following the date the Company publicly announces such transaction, but in no event less than 45 Scheduled Trading Days prior to the anticipated effective date of such transaction.
(v) If, at any time after October 15, 2016, the Company calls any or all of the Notes for redemption as described under Article 15 hereof, Holders of the Notes will have the right to convert their Notes at any time until the close of business on the Business Day immediately preceding the Redemption Date, after which time Holders will no longer have the right to convert their Notes on account of the Companys delivery of notice of such redemption, unless the Company defaults in the payment of the Redemption Price. If a Holder elects to convert its Notes in connection with a Redemption Notice issued by the Company, the Company shall:
(A) increase the conversion rate for the Notes as described under Section 4.06 hereof; and
(B) pay to such Holder an amount equal to accrued and unpaid interest (including additional amounts, if any) on the Notes that are surrendered for conversion to, but excluding, the conversion date; provided that if such conversion date occurs after a record date and on or prior to the corresponding Interest Payment Date, the Company shall pay the interest due (including Additional Interest, if any) on that Interest Payment Date to the Holder of record on the relevant record date and no additional payment will be made pursuant to this clause.
Failure by the Company to give any notice required by Section 4.01 , or any defect therein, shall not affect the legality or validity of the relevant transaction or event.
(b) Notes may not be converted after the close of business on the second Scheduled Trading Day immediately preceding October 15, 2018.
SECTION 4.02. Conversion Procedures. (a) Each Note shall be convertible at the office of the Conversion Agent and, if applicable, in accordance with the procedures of the Depositary.
(b) In order to exercise the conversion privilege with respect to any interest in a Global Note, the Holder must comply with the Depositarys procedures for converting an interest in a Global Note and, if required, pay the funds required by Section 4.03(e) and pay any taxes or duties if required pursuant to Section 4.08 , and the Conversion Agent must be informed of the conversion in accordance with the customary practice of the Depositary. In order to exercise the conversion privilege with respect to any Physical Notes, the Holder of any such Notes to be converted, in whole or in part, shall:
(i) complete and manually sign the conversion notice provided on the back of the Note (the Conversion Notice ) or a facsimile of the Conversion Notice;
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(ii) deliver the Conversion Notice, which is irrevocable, and the Note to the Conversion Agent;
(iii) if required, furnish appropriate endorsements and transfer documents,
(iv) make any payment required under Section 4.03(e) ; and
(v) if required, pay all transfer or similar taxes as set forth in Section 4.08 .
The date on which the Holder satisfies all of the applicable requirements set forth above is the Conversion Date . The Conversion Agent will, as promptly as possible, and in any event within two Business Days of the receipt thereof, provide the Company and the Trustee with notice of any conversion by a Holder of the Notes.
(c) Each Conversion Notice shall state the name or names (with address or addresses) in which any certificate or certificates for shares of Common Stock which shall be issuable on such conversion shall be issued. All such Notes surrendered for conversion shall, unless the shares issuable on conversion are to be issued in the same name as the registration of such Notes, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the Holder or his duly authorized attorney.
(d) In case any Notes of a denomination greater than $1,000 shall be surrendered for partial conversion, the Company shall execute and the Authenticating Agent shall authenticate and deliver to the Holder of the Notes so surrendered, without charge, new Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Notes.
(e) Each conversion shall be deemed to have been effected as to any Notes (or portion thereof) surrendered for conversion on the relevant Conversion Date, and with respect to any shares of Common Stock that are issuable upon such conversion: (i) if such conversion was subject to a Physical Settlement, the Person in whose name the certificate or certificates for such shares of Common Stock will be registered, shall become the holder of record of such shares as of the close of business on the Conversion Date; and (ii) if such conversion was subject to a Combination Settlement, the Person in whose name the certificate or certificates for such shares of Common Stock will be registered, shall become the holder of record of such shares as of the close of business on the last Trading Day of the related Observation Period.
(f) Upon the conversion of an interest in Global Notes, the Conversion Agent (or other Conversion Agent appointed by the Company) shall make a notation on such Global Notes as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in writing of any conversions of Notes effected through any Conversion Agent other than the Trustee.
(g) Notwithstanding the foregoing, a Note in respect of which a Holder has delivered a Fundamental Change Purchase Notice exercising such Holders option to require the Company to purchase such Note may be converted only if such notice of exercise is withdrawn in accordance with Article 3 hereof prior to the close of business on the Business Day prior to the relevant Fundamental Change Purchase Date.
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SECTION 4.03. Settlement Upon Conversion. (a) Except as provided in Section 4.06(b) , upon any conversion of any Note, the Company shall deliver to converting Holders, in respect of each $1,000 principal amount of Notes being converted, at the Companys election, in full satisfaction of the Companys Conversion Obligation, (1) shares of Common Stock, together with cash in lieu of fractional shares, if any (a Physical Settlement ), (2) a cash payment without any delivery of shares of Common Stock (a Cash Settlement ) or (3) a combination of cash and shares of Common Stock, together with cash in lieu of fractional shares, if any (a Combination Settlement ), in each case, as set forth below (the amounts so deliverable upon conversion of the Notes, the Conversion Obligation ):
For conversions:
(i) that occur prior to April 15, 2018, by the close of business on the Business Day following the Conversion Date, the Company shall notify converting Holders of the relevant Settlement Method and, if the Company elects a Combination Settlement, the dollar amount of the conversion obligation (the Cash Amount ) that will be settled in cash;
(ii) that occur on or after April 15, 2018, the Company shall notify all Holders of the relevant Settlement Method and, if applicable, the related Cash Amount, by notice on or prior to April 15, 2018 (which shall apply to all conversions on or following April 15, 2018).
If the Company does not specify a Settlement Method as set forth above, then Combination Settlement shall apply, and the related Cash Amount used in the settlement calculation set forth in paragraph (d) below will be $1,000. Any such notice of a Settlement Method may not be revoked.
(b) If the Company has elected a Physical Settlement with respect to any Notes tendered for conversion, the Company shall deliver, for each $1,000 principal amount of Notes, a number of shares of Common Stock equal to the Conversion Rate, together with cash in lieu of fractional shares. Except for conversions upon a Make-Whole Fundamental Change as provided in Section 4.06 , the Company shall deliver such shares of Common Stock (1) on the third Business Day following the Conversion Date, in the case of a Physical Settlement with respect to a Conversion Date on or prior to the Business Day immediately preceding April 15, 2018, or (2) on the third Business Day following the last day of the applicable Observation Period, in the case of a Physical Settlement with respect to a Conversion Date on or after April 15, 2018.
(c) If the Company has elected a Cash Settlement with respect to any Notes tendered for conversion, the Company shall deliver, for each $1,000 principal amount of Notes, a cash payment equal to the sum of the Daily Conversion Values for each of the twenty (20) consecutive Trading Days during the relevant Observation
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Period. Except for conversions upon a Make-Whole Fundamental Change as provided in Section 4.06 , the Company shall make such payment on the third Business Day following the last day of the applicable Observation Period.
(d) If the Company has elected or is deemed to have elected a Combination Settlement with respect to any Notes tendered for conversion, the Company shall deliver, for each $1,000 principal amount of Notes, the sum of the Daily Settlement Amounts for each of the twenty (20) consecutive Trading Days during the relevant Observation Period.
The Daily Settlement Amount for each of the twenty (20) consecutive Trading Days during the Observation Period shall consist of:
(i) cash in an amount equal to the lesser of (i) 5% of the cash amount specified by the Company in the notice regarding the chosen Settlement Method (the Daily Cash Amount ) and (ii) the Daily Conversion Value on such Trading Day; and
(ii) if the Daily Conversion Value on such Trading Day exceeds the Daily Cash Amount, a number of shares of Common Stock (together with cash in lieu of any fractional shares) equal to (i) the difference between such Daily Conversion Value and the Daily Cash Amount, divided by (ii) the Daily VWAP on such Trading Day.
Except for conversions upon a Make-Whole Fundamental Change as provided in Section 4.06 , the Company shall deliver such cash and shares of Common Stock on the third Business Day following the last day of the applicable Observation Period.
(e) Upon conversion of any Notes, Holders shall not receive any separate cash payment for accrued and unpaid interest, except to the extent specified below. The Companys delivery to the Holder of Common Stock, cash or a combination of cash and Common Stock, as applicable, together with any cash payment for any fractional share of Common Stock, into which a Note is convertible shall be deemed to satisfy in full the Companys obligation to pay (i) the principal amount of the Notes so converted and (ii) accrued and unpaid interest to, but not including, the Conversion Date. As a result, accrued and unpaid interest to, but not including, the Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Notes surrendered for conversion during the period from the close of business on any Regular Record Date to the open of business on the immediately following Interest Payment Date must be accompanied by funds equal to the amount of interest payable on the Notes so converted; provided that no such payment need be made (i) for conversions following the Regular Record Date immediately preceding April 15, 2018, (ii) if the Company has specified a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the corresponding Interest Payment Date, (iii) if the Company has specified a date for redemption of Notes that is after a Regular Record Date and on or prior to the corresponding Interest Payment Date, or (iv) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such Note.
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(f) The Company shall not issue fractional shares of Common Stock upon conversion of Notes. If multiple Notes shall be surrendered for conversion at one time by the same Holder, the number of full shares of Common Stock which shall be issuable upon conversion shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof to the extent permitted hereby) so surrendered. If any fractional share of Common Stock would be issuable upon the conversion of any Notes, the Company shall make payment therefor in cash in lieu of fractional shares of Common Stock based on:
(i) if Physical Settlement applies, on the Last Reported Sale Price of the Common Stock on the relevant Conversion Date, and
(ii) if Combination Settlement applies, the Daily VWAP of the Common Stock on the final Trading Day of the applicable Observation Period.
(g) Solely for purposes of determining the payments and deliveries due upon conversion under this Section 4.03 , and notwithstanding the definition of Trading Day contained in Section 1.02 , Trading Day means a day on which (i) there is no Market Disruption Event and (ii) 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 Exchange, on the principal other United States national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a United States national or regional securities exchange, on the principal other market on which the Common Stock is then traded. If the Common Stock (or other security for which a Daily VWAP must be determined) is not so listed or traded, Trading Day means a Business Day.
(h) Upon surrender of Notes for conversion in connection with a Make-Whole Fundamental Change or Redemption Notice, the Company shall deliver shares of Common Stock, cash or a combination of cash and shares of Common Stock, as set forth above, at the increased Conversion Rate as described in Section 4.06 .
SECTION 4.04. Adjustment of Conversion Rate. The Conversion Rate shall be adjusted from time to time by the Company if any of the following events occurs, except that the Company will not make any adjustment to the Conversion Rate if Holders of Notes participate, as a result of holding the Notes, in any of the transactions described under Section 4.04(a) (but only with respect to stock dividends or distributions), Section 4.04(b) , Section 4.04(c) , and Section 4.04(d) , at the same time as holders of the Common Stock participate, without having to convert their Notes, as if such Holders held a number of shares of Common Stock equal to the Conversion Rate in effect for each $1,000 principal amount of such Notes immediately prior to the Ex-Dividend Date for such event.
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(a) If the Company, at any time or from time to time while any of the Notes are outstanding, exclusively issues shares of its Common Stock as a dividend or distribution on shares of Common Stock, or if the Company effects a share split or share combination, then the Conversion Rate shall be adjusted based on the following formula:
where
CR 0 = | 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; | |
CR 1 = | The Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date or such effective date; | |
OS 0 = | The number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date or such effective date; and | |
OS 1 = | The number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination. |
Such adjustment shall become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution or the effective date for such share split or share combination. If any dividend or distribution of the type described in this Section 4.04(a) is declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate which would then be in effect if such dividend or distribution had not been declared.
(b) If the Company, at any time or from time to time while any of the Notes are outstanding, issues to all or substantially all holders of the Common Stock any rights or warrants entitling them for a period of not more than 45 calendar days after date of such issuance to subscribe for or purchase shares of the Common Stock at a price per share less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the Ex-Dividend Date for such issuance, the Conversion Rate shall be adjusted based on the following formula:
where
CR 0 = | The Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such issuance; | |
CR 1 = | The Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date; |
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OS 0 | = | 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 or warrants; and | ||
Y | = | The number of shares of Common Stock equal to the aggregate price payable to exercise such rights 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 the Trading Day immediately preceding the date of announcement of the issuance of such rights or warrants. |
Such adjustment shall become effective immediately after the open of business on the Ex-Dividend Date for such issuance. To the extent such rights or warrants are not exercised prior to their expiration or termination, the Conversion Rate shall be readjusted to the Conversion Rate which would be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of the delivery of only the number of shares of Common Stock actually delivered. In the event that such rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate which would then be in effect if the date fixed for the determination of shareholders entitled to receive such rights or warrants had not been fixed. For the purposes of this Section 4.04(b) , in determining whether any rights or warrants entitle the holders to subscribe for or purchase shares of Common Stock at less than the average of the Last Reported Sale Prices of Common Stock for the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the date of announcement of such issuance, and in determining the aggregate exercise price payable for such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights or warrants and any amount payable on the exercise thereof, with the value of such consideration, if other than cash, as shall be determined by the Board of Directors.
(c) If the Company, at any time or from time to time while the Notes are outstanding, distributes shares of any class of capital stock of the Company, evidences of its indebtedness, other assets or property of the Company or rights or warrants to acquire the Companys capital stock or other securities to all or substantially all holders of its Common Stock, excluding:
(i) dividends or distributions and rights or warrants as to which an adjustment was effected pursuant to Section 4.04(a) or Section 4.04(b) ;
(ii) dividends or distributions paid exclusively in cash (as set forth below in Section 4.04(d) ) ; and
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(iii) Spin-Offs to which the provisions set forth below in this Section 4.04(c) shall apply; then the Conversion Rate shall be adjusted based on the following formula:
CR 0 | = | the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such distribution; | ||
CR 1 | = | the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date; | ||
SP 0 | = | the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and | ||
FMV | = | the fair market value (as determined by the Board of Directors) of the shares of capital stock, evidences of indebtedness, assets, property, rights or warrants distributed with respect to each outstanding share of the Common Stock on the Ex-Dividend Date for such distribution |
Such adjustment shall become effective immediately after the open of business on the Ex-Dividend Date for such distribution. If the Board of Directors determines the FMV (as defined above) of any distribution for purposes of this Section 4.04(c) by reference to the actual or when issued trading market for any securities, it must in doing so consider the prices in such market over the same period used in computing the average of the Last Reported Sale Prices of the Common Stock. Notwithstanding the foregoing, if FMV (as defined above) is equal to or greater than SP 0 (as defined above), in lieu of the foregoing adjustment, each Holder of Notes shall receive, at the same time and upon the same terms as holders of the Common Stock, the amount and kind of securities, assets and property such Holder would have received as if such Holder owned a number of shares of Common Stock equal to, for each $1,000 principal amount of Notes, the Conversion Rate in effect on the record date for the distribution of the securities, assets or property.
With respect to an adjustment pursuant to this Section 4.04(c) where there has been a payment of a dividend or other distribution on the Common Stock of shares of capital stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit and such dividend or distribution is listed for trading on a securities exchange (a Spin-Off ), the Conversion Rate shall be increased based on the following formula:
where
CR 0 | = | the Conversion Rate in effect immediately prior to the end of the Valuation Period (as defined below); | ||
CR 1 | = | the Conversion Rate in effect immediately after the end of the Valuation Period; |
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FMV 0 | = | the average of the Last Reported Sale Prices of the capital stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock (determined for purposes of the definition of Last Reported Sale Price as if such capital stock or similar equity interest were the Common Stock) over the first 10 consecutive Trading Day period after, and including, the Ex-Dividend Date of the Spin-Off (the Valuation Period ); and | ||
MP 0 | = | the average of the Last Reported Sale Prices of Common Stock over the Valuation Period. |
The adjustment to the Conversion Rate under the preceding paragraph will occur on the last day of the Valuation Period; provided that in respect of any conversion during the Valuation Period, references above to 10 Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed between the Ex-Dividend Date of such Spin-Off and the Conversion Date in determining the applicable Conversion Rate.
For the purposes of this Section 4.04(c) (and subject in all respects to Section 4.12 ), rights or warrants distributed by the Company to all holders of its Common Stock entitling them to subscribe for or purchase shares of the Companys capital stock (either initially or under certain circumstances), which rights or warrants, until the occurrence of a specified event or events (a Trigger Event ): (1) are deemed to be transferred with such shares of Common Stock; (2) are not exercisable; and (3) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this Section 4.04(c) , (and no adjustment to the Conversion Rate under this Section 4.04(c) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 4.04(c) . If any such right or warrant, including any such existing rights or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights 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 of such deemed distribution (in which case the original rights or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders). In addition, in the event of any distribution or deemed distribution of rights or warrants, or any Trigger Event or other event (of the type described in the 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 4.04(c) was made, (1) in the case of any such rights or warrants which shall all have been redeemed or purchased without exercise by any Holders thereof, upon such final redemption or repurchase (x) the Conversion Rate shall be readjusted as if such rights 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 holders of Common Stock with respect to such rights or warrants (assuming each such holder had retained such rights 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 or warrants which shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights and warrants had not been issued.
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For the purposes of this Section 4.04(c) and subsections (a) and (b) of this Section 4.04 , any dividend or distribution to which this Section 4.04(c) applies which also includes one or both of:
(A) a dividend or distribution of shares of Common Stock to which Section 4.04(a) applies (the Clause A Distribution ); and
(B) a dividend or distribution of rights or warrants to which Section 4.04(b) applies (the Clause B Distribution ),
then (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 4.04(c) applies (the Clause C Distribution ) and any Conversion Rate adjustment required by this Section 4.04(c) with respect thereto 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 4.04(a) and Section 4.04(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 such effective date within the meaning of Section 4.04(a) or outstanding immediately prior to the open of business on such Ex-Dividend Date within the meaning of Section 4.04(b) .
(d) If the Company makes any cash dividend or distribution to all or substantially all holders of Common Stock, the Conversion Rate shall be adjusted based on the following formula:
where
CR 0 | = | The Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution; | ||
CR 1 | = | The Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution; | ||
SP 0 | = | 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 holders of the Common Stock. |
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In the case of an adjustment pursuant to this Section 4.04(d) , such adjustment shall become effective immediately after the open of business on the Ex-Dividend Date for the relevant dividend or distribution. If the portion of the cash so distributed applicable to one share of the Common Stock is equal to or greater than the Last Reported Sale Price of a share of Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution, in lieu of the adjustment set forth above, adequate provision shall be made so that each Holder of Notes shall have the right to receive on the date on which such cash dividend or distribution is distributed to holders of Common Stock, for each $1,000 principal amount of Notes, the amount of cash such Holder would have received had such Holder owned a number of shares of Common Stock equal to the Conversion Rate in effect immediately prior to the Ex-Dividend Date for such distribution.
(e) If the Company or any of its Subsidiaries makes a payment in respect of a tender offer or exchange offer for Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of Common Stock exceeds the Last Reported Sale Price per share of Common Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate shall be increased based on the following formula:
where
CR 0 | = | the Conversion Rate in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; | ||
CR 1 | = | the Conversion Rate in effect immediately after the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; | ||
AC | = | the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares purchased in such tender or exchange offer; | ||
OS 0 | = | the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires; | ||
OS 1 | = | 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 accepted for purchase or exchange in such tender or exchange offer); and | ||
SP 1 | = | the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on the Trading Day next succeeding the date such tender or exchange offer expires. |
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The adjustment to the Conversion Rate under this Section 4.04(e) shall occur as of the close of business on the tenth Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; provided that in respect of any conversion within 10 Trading Days immediately following, and including, the expiration date of any tender or exchange offer, references with respect to 10 Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed between the expiration date of such tender or exchange offer and the Conversion Date in determining the applicable Conversion Rate.
(f) The Company from time to time may increase the Conversion Rate by any amount for any period of time of at least 20 Business Days, so long as the increase is irrevocable during the period and the Board of Directors shall have made a determination that such increase would be in the best interests of the Company, which determination shall be conclusive. Whenever the Conversion Rate is increased pursuant to this Section 4.04 (f) , the Company shall mail to Holders of record of the Notes a notice of the increase at least one day prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.
(g) The Company may (but shall not be required to) increase the Conversion Rate, in addition to any adjustments pursuant to Section 4.04 (a) , 4.04(b) , 4.04(c) , 4.04(d) , 4.04(e) or 4.04(f) , if the Board of Directors considers such increase to be advisable to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event.
(h) All calculations under this Article 4 shall be made by the Company and shall be made to the nearest cent (including, in the case of any adjustment to the Conversion Rate, the resulting adjustment to the Conversion Price) or to the nearest one ten-thousandth of a share. No adjustment shall be required to be made for the Companys issuance of Common Stock or any securities convertible into or exchangeable for shares of Common Stock or rights to purchase shares of Common Stock or such convertible or exchangeable securities, other than as provided in this Section 4.04 and in Section 4.11 hereof.
(i) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee and any Conversion Agent an Officers Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee and the Conversion Agent shall have received such Officers Certificate, neither the Trustee nor the Conversion Agent shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has knowledge is still in effect. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Rate to each Holder of the Notes. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.
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(j) For purposes of this Section 4.04 , the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company so long as the Company does not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company, but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.
(k) Notwithstanding the foregoing, if the application of the foregoing formulas set forth in this Section 4.04 would result in a decrease in the Conversion Rate, no adjustment to the Conversion Rate shall be made (other than as a result of a reverse share split or share combination).
(l) Notwithstanding anything to the contrary in this Article 4 , no adjustment to the Conversion Rate shall be made:
(i) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Companys securities and the investment of additional optional amounts in shares of Common Stock under any plan;
(ii) upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of its Subsidiaries;
(iii) 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) above and outstanding as of the date the Notes were first issued;
(iv) for a change in the par value of the Common Stock; or
(v) for accrued and unpaid interest on the Notes.
(m) If a Conversion Rate adjustment becomes effective on any Ex-Dividend Date as described above, 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 shares of Common Stock as of the related Conversion Date as set forth in Section 4.02(e) based on an adjusted Conversion Rate for such Ex-Dividend Date, then, notwithstanding the Conversion Rate adjustment provisions above, the Conversion Rate adjustment relating to such Ex-Dividend Date shall not be made for such converting Holder. Instead, such Holder shall be deemed to be the record owner of shares of Common Stock on an unadjusted basis on such Conversion Date and participate in the related dividend, distribution or other event giving rise to such adjustment.
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(n) In the event of an increase in the Conversion Rate that would result in the Notes, in the aggregate, becoming convertible into Common Stock in excess of limitations imposed by the applicable certain listing standards of The New York Stock Exchange, the Company shall, at its option, either obtain stockholder approval of such issuances or pay cash in lieu of delivering any shares of Common Stock otherwise deliverable on the Conversion Date in excess of such limitations based on the Daily VWAP on each Trading Day of the relevant Observation Period in respect of which, in lieu of delivering shares of Common Stock, the Company delivers cash pursuant to this Section 4.04(n) .
SECTION 4.05. Certain Other Adjustments . Whenever a provision of this Indenture requires the calculation of Last Reported Sale Prices or Daily VWAP over a span of multiple days, the Board of Directors will make appropriate adjustments to such Last Reported Sale Prices or Daily VWAP, the Conversion Rate, or the amount due upon conversion 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 of the event occurs, at any time during the period from which such Last Reported Sale Prices or Daily VWAP are to be calculated.
SECTION 4.06. Adjustments Upon Certain Fundamental Changes or Redemption Notices. (a) If (i) a Make-Whole Fundamental Change occurs and a Holder elects to convert its Notes in connection with such Make-Whole Fundamental Change or (ii) on or after October 15, 2016, the Company gives notice to Holders of the Companys intention to redeem any or all of the Notes as provided under Article 15 hereof, 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 or Redemption Notice, as the case may be, if the notice of conversion or redemption of the Notes is received by the Conversion Agent from, and including, the Effective Date of the Make-Whole Fundamental Change or redemption up to, and including, the Business Day immediately prior to the related redemption or Fundamental Change Purchase Date (or, in the case of an event that would have been a Fundamental Change but for the proviso in clause (2) of the definition thereof, the 35th Trading Day immediately following the Effective Date of such Make-Whole Fundamental Change). A conversion of Notes will be deemed for these purposes to be in connection with a Redemption Notice if the notice of conversion of the Notes is received by the Conversion Agent from, and including, the date of the Redemption Notice until the close of business on the Business Day preceding the Redemption Date.
(b) Upon surrender of Notes for conversion in connection with a Make-Whole Fundamental Change, the Company shall have the right to deliver, in lieu of shares of Common Stock, including the Additional Shares, cash or a combination of cash and shares of Common Stock as provided under Section 4.03(a) ; provided, however , that if the consideration for the Common Stock in any Make-Whole Fundamental Change described in clause (2) of the definition of Fundamental Change is comprised entirely of cash, then, for any conversion of Notes following the Effective Date of such Make-
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Whole Fundamental Change, the amounts deliverable by the Company shall be calculated based solely on the Stock Price for the Make-Whole Fundamental Change and shall be deemed to be an amount equal to the applicable Conversion Rate (including any adjustment for Additional Shares described in this Section) multiplied by such Stock Price. In such event, the amounts deliverable by the Company shall be determined and paid to holders in cash on the third Business Day following the Conversion Date.
(c) The number of Additional Shares, if any, by which the Conversion Rate will be increased will be determined by reference to the table attached as Schedule A hereto, based on the date on which the Make-Whole Fundamental Change or the date of the Redemption Notice, as the case may be, occurs or becomes effective (each, an Effective Date ), and the price (the Stock Price ) paid (or deemed paid) per share of the Common Stock in the Make-Whole Fundamental Change or the redemption, as the case may be. If the holders of the Common Stock receive only cash in a Make-Whole Fundamental Change described in clause (2) of the definition of Fundamental Change, the Stock Price shall be the cash amount paid per share. Otherwise, the Stock Price shall be the average of the Last Reported Sale Prices of the Common Stock over the five Trading-Day period ending on, and including, the Trading Day preceding the Effective Date.
The exact Stock Prices and Effective Dates may not be set forth in the table in Schedule A, in which case:
(i) If the Stock Price is between two Stock Prices in the table or the Effective Date is between two Effective Dates in the table, the number of Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Prices and the earlier and later Effective Dates, as applicable, based on a 365-day year.
(ii) If the Stock Price is greater than $250.00 per share (subject to adjustment in the same manner as the Stock Prices set forth in the column headings of the table in Schedule A pursuant to subsection (d) below), no Additional Shares shall be added to the Conversion Rate.
(iii) If the Stock Price is less than $36.50 per share (subject to adjustments in the same manner as the Stock Prices set forth in the column headings of the table in Schedule A pursuant to subsection (d) below), no Additional Shares shall be added to the Conversion Rate.
Notwithstanding the foregoing, in no event shall the Conversion Rate exceed 27.3973 shares of Common Stock per $1,000 principal amount of Notes, subject to adjustments in the same manner as the Conversion Rate as set forth in Section 4.04 .
(d) The Stock Prices set forth in the column headings of the table in Schedule A hereto shall be adjusted as of any date on which the Conversion Rate of the Notes is otherwise adjusted. The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator
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of which is the Conversion Rate immediately prior to such adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of Additional Shares set forth in such table shall be adjusted in the same manner as the Conversion Rate as set forth in Section 4.04 .
(e) The Company shall notify the Holders of Notes of the Effective Date of any Make-Whole Fundamental Change and issue a press release announcing such Effective Date no later than five Business Days after such Effective Date.
SECTION 4.07. Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale . (a) If any of the following events occur:
(i) any recapitalization or reclassification of, or change in, the Common Stock (other than changes resulting from a subdivision or combination);
(ii) a consolidation, merger or combination involving the Company; or
(iii) a sale, lease or other transfer to a third party of the consolidated assets of the Company and its Subsidiaries substantially as an entirety, or
(iv) any statutory share exchange;
in each case as a result of which the Common Stock would be converted into, or exchanged for, or would be reclassified or changed into, stock, other securities, other property or assets (including cash or any combination thereof) (any such event, a Merger Event ), then 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 and the Agent a supplemental indenture providing that at and after the effective time of such Merger Event, the right to convert a Note will be changed into a right to convert such Note as set forth in this Indenture 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 Conversation Rate prior to such Merger Event would have owned or been entitled to receive (the Reference Property , with each unit of Reference Property meaning the type and amount of Reference Property that a holder of one share of Common Stock is entitled to receive) upon such Merger Event; provided, however , that at and after the effective time of the Merger Event the conversion obligation shall be calculated and settled in accordance with Section 4.03 such that (i) the amount payable in cash upon conversion of the Notes as set forth under Section 4.03 will continue to be payable in cash, (ii) the number of shares of Common Stock (if the Company elects Physical Settlement or Combination Settlement) deliverable upon conversion of the Notes under Section 4.03 will be instead deliverable in the amount and type of Reference Property that a holder of that number of shares of Common Stock would have been entitled to receive in such Merger Event and (iii) the Daily VWAP will be calculated based on the value of a unit of Reference Property.
If, as a result of the Merger Event, each share of Common Stock is 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 (x)
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the Reference Property into which the Notes will be convertible will be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election, and (y) the unit of Reference Property for purposes of the foregoing sentence shall refer to the consideration referred to in clause (x) attributable to one share of Common Stock.
The Company shall not become a party to any such Merger Event unless its terms are consistent with this Section 4.07(a) . Such supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 4 in the judgment of the Board of Directors or the board of directors of the successor Person. If, in the case of any such recapitalization, reclassification, change, consolidation, merger, combination, sale, lease, other transfer or statutory share exchange, the Reference Property receivable thereupon by a holder of Common Stock includes shares of stock, securities or other property or assets (including cash or any combination thereof) of a Person other than the successor or purchasing Person, as the case may be, in such reorganization, reclassification, change, consolidation, merger, combination, sale, lease, other transfer or statutory share exchange, then such supplemental indenture shall also be executed by such other Person.
(b) The Company shall cause notice of the execution of such supplemental indenture to be mailed to each Holder, at the address of such Holder as it appears on the register of the Notes maintained by the Note Registrar, within 20 calendar days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture. The above provisions of this Section 4.07 shall similarly apply to successive reclassifications, changes, consolidations, mergers, combinations, sales and conveyances. If this Section 4.07 applies to any Merger Event, Section 4.04 shall not apply.
SECTION 4.08. Taxes on Shares Issued. The Company will pay any documentary, stamp or similar issue or transfer tax due on the issue or delivery of shares of Common Stock on conversion of Notes pursuant hereto; provided, however , that if such documentary, stamp or similar issue or transfer tax is due because the Holder of such Notes has requested that shares of Common Stock be issued in a name other than that of the Holder of the Notes converted, then such taxes will be paid by the Holder, and the Company shall not be required to issue or deliver any stock certificate evidencing such shares unless and until the Holder shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.
SECTION 4.09. Reservation of Shares; Shares to be Fully Paid; Compliance With Governmental Requirements; Listing of Common Stock. The Company shall reserve, out of its authorized but unissued shares or shares held in treasury, sufficient shares of Common Stock to satisfy conversion of the Notes from time to time as such Notes are presented for conversion (assuming that, at the time of the computation of such number of shares or securities, all such Notes would be converted by a single Holder and that Physical Settlement would apply).
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The Company covenants that all shares of Common Stock that may be issued upon conversion of Notes shall be newly issued shares or treasury shares, shall be duly authorized, validly issued, fully paid and non-assessable and shall be free from preemptive rights and free from any tax, lien or charge (other than those created by the Holder).
The Company shall list or cause to have quoted any shares of Common Stock to be issued upon conversion of Notes on each national securities exchange or over-the-counter or other domestic market on which the Common Stock is then listed or quoted.
SECTION 4.10. Responsibility of Trustee and Conversion Agent . The Trustee and any Conversion Agent shall not at any time be under any duty or responsibility to any Holder of Notes to determine or calculate the Conversion Rate, to determine whether any facts exist which may require any adjustment of the Conversion Rate, or to confirm the accuracy of any such adjustment when made or the appropriateness of the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and the Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock or of any other securities or property that may at any time be issued or delivered upon the conversion of any Notes; and the Trustee and the Conversion Agent make no representations with respect thereto. Neither the Trustee nor the Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Notes for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article 4 . The rights, privileges, protections, immunities and benefits given to the Trustee and the Conversion Agent, including without limitation its right to be compensated, reimbursed, and indemnified, are extended to, and shall be enforceable by, the Trustee and the Conversion Agent in any other capacity either may hold hereunder, including, if either, is so appointed by the Company and accepts such appointment, as Bid Solicitation Agent.
SECTION 4.11. Notice to Holders Prior to Certain Actions . In case:
(a) the Company shall declare a dividend (or any other distribution) on its Common Stock that would require an adjustment in the Conversion Rate pursuant to Section 4.04 ; or
(b) the Company shall authorize the granting to the holders of all or substantially all of its Common Stock of rights or warrants to subscribe for or purchase any share of any class or any other rights or warrants that would require an adjustment in the Conversion Rate pursuant to Section 4.04 or Section 4.12 hereof; or
(c) of any reclassification or reorganization of the Common Stock of the Company (other than a change in par value, or from par value to no par value, or
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from no par value to par value), or of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale, lease or transfer of all or substantially all of the assets of the Company and its consolidated Subsidiaries; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company or any of its Subsidiaries;
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 and to be mailed to each Holder of Notes at such Holders address appearing on a list of Holders of Notes, which the Company shall provide to the Trustee and the Conversion Agent, as promptly as practicable but in any event at least 10 calendar days prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend (or any other distribution) or rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights or warrants are to be determined, or (y) the date on which such reclassification, reorganization, consolidation, merger, sale, lease, transfer, 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 reclassification, reorganization, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend (or any other distribution), reclassification, reorganization, consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
SECTION 4.12. Stockholder Rights Plan . Each share of Common Stock issued upon conversion of Notes pursuant to this Article 4 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 stockholder rights plan adopted by the Company, as the same may be amended from time to time. Notwithstanding the foregoing, if prior to any conversion such rights have separated from the shares of Common Stock in accordance with the provisions of the applicable stockholder rights agreement, the Conversion Rate shall be adjusted at the time of separation as if the Company had distributed to all holders of the Common Stock, shares of the Companys capital stock, evidences of indebtedness, assets, property, rights or warrants as described in Section 4.04(c) above, subject to readjustment in the event of the expiration, termination or redemption of such rights.
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ARTICLE 5
DEFAULTS AND REMEDIES
SECTION 5.01. Events of Default . Each of the following shall be an Event of Default :
(a) the Company defaults in the payment of interest, including any Additional Interest, on any Note when the same becomes due and payable and such default continues for a period of 30 days, whether or not such payment is prohibited pursuant to Article 8 ;
(b) the Company defaults in the payment of the principal of any Note when the same becomes due and payable at its Maturity, upon acceleration, upon any required repurchase, upon optional redemption, or otherwise, whether or not such payment is prohibited pursuant to Article 8 ;
(c) failure by the Company to comply with its obligation to convert the Notes in accordance with the Indenture upon exercise of a Holders conversion right in accordance with Article 4 hereof, whether or not prohibited pursuant to Article 8 ;
(d) failure by the Company to provide a Fundamental Change Company Notice pursuant to Section 3.01(b) or notice of a specified corporate transaction required by Section 4.01(a)(iii) or Section 4.01(a)(iv) in accordance with the relevant Section, in each case when due;
(e) failure by the Company to comply with its obligations under Section 6.01 hereof;
(f) the Company fails to perform or observe with any of the covenants or agreements contained in the Notes or Indenture (other than a default set forth in clauses (a), (b), (c), (d) or (e) above) for 30 days after written notice to the Company from the Trustee or to the Trustee from the Holders of at least 25% in principal amount of the Notes then outstanding;
(g) the entry by a court of competent jurisdiction of one or more judgments, orders or decrees against the Company or any subsidiary of the Company (other than a Securitization Subsidiary) or any of their respective property or assets in an aggregate amount in excess of $50.0 million, which judgments, orders or decrees have not been vacated, discharged, satisfied or stayed pending appeal within 30 days from the entry thereof and with respect to which legal enforcement proceedings have been commenced;
(h) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any indebtedness for money borrowed by the Company or any subsidiary of the Company (other than a Securitization Subsidiary) (or the payment of which is guaranteed by the
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Company or any subsidiary of the Company), which default is caused by a failure to pay principal of or premium, if any, on such indebtedness upon its stated maturity or which default results in the acceleration of such indebtedness prior to its express maturity and the principal amount of any such indebtedness, together with the principal amount of any other such indebtedness the maturity of which has been so accelerated, aggregates $50.0 million or more and such acceleration has not been rescinded or annulled or such indebtedness discharged in full within 30 days;
(i) the Company or any Significant Subsidiary of the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an involuntary case,
(C) consents to the appointment of a Bankruptcy Custodian of it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors; and
(j) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that remains unstayed and in effect for 90 days and that:
(A) is for the relief against the Company or any Significant Subsidiary of the Company as debtor in an involuntary case,
(B) appoints a Bankruptcy Custodian of the Company or any Significant Subsidiary of the Company or a Bankruptcy Custodian for all or substantially all of the property of any Significant Subsidiary of the Company, or
(C) orders the liquidation of the Company or any Significant Subsidiary of the Company.
SECTION 5.02. Additional Interest . Notwithstanding any provisions of the Indenture to the contrary, if the Company so elects, the sole remedy for an Event of Default relating to any obligation to file documents and reports with the Trustee as required by Section 9.06 of this Indenture shall for the first 180 days following the occurrence of such Event of Default consist exclusively of the right to receive additional interest on the Notes at a rate equal to 0.25% per annum of the principal amount of the Notes outstanding for each during the 90-day period beginning on, and including, the occurrence of such Event of Default during which such Event of Default is continuing, and at a rate equal to 0.50% per annum of the principal amount of the Notes outstanding for each day from the 91st day until the 364th day during which such Event of Default is continuing (in each case, Additional Interest ). In order to elect to pay Additional Interest as the sole remedy during the first 364 days after the occurrence of an Event of
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Default described in the preceding sentence, the Company must give notice to Holders of the Notes, the Trustee and the Paying Agent of such election on or prior to the close of business on the Business Day before the date on which such Event of Default would occur and on or prior to the close of business on the 91st day after the date on which such Event of Default first occurs. 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. Upon the failure to timely give all Holders, the Trustee and the Paying Agent such notice, the Notes will be subject to immediate acceleration as provided in Section 5.03 of this Indenture. On the 365th day after such Event of Default occurs (if such Event of Default is not cured or waived prior to such 365th day), the Notes shall be subject to acceleration as provided in Section 5.03 of the Indenture. This Section 5.02 shall not affect the rights of Holders of Notes in the event of the occurrence of any other Event of Default. Whenever in the Indenture there is mentioned, in any context, the payment of interest on, or in respect of, any Note, such mention shall be deemed to include mention of the payment of Additional Interest provided for in this Section 5.02 to the extent that, in such context, Additional Interest is, was or would be payable in respect thereof pursuant to the provisions of this Section 5.02 , and express mention of the payment of Additional Interest (if applicable) in any provision shall not be construed as excluding Additional Interest in those provisions where such express mention is not made.
SECTION 5.03. Acceleration. Subject to the provisions of Section 5.02 , if an Event of Default occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in aggregate principal amount of the outstanding Notes by notice to the Company and the Trustee, may, and the Trustee at the request of such holders shall, declare 100% of the principal of and accrued and unpaid interest on all the Notes to be due and payable. Upon such a declaration of acceleration, all principal and accrued and unpaid interest (including any Additional Interest) on the Notes will be due and payable immediately. However, upon an Event of Default arising out of Sections 5.01(i) or 5.01(j) , the aggregate principal amount and accrued and unpaid interest (including any Additional Interest) will be due and payable immediately, without any declaration, notice or other act on the part of the Trustee or Holder. The Holders of a majority in principal amount of the then outstanding Notes affected by such Event of Default, by written notice to the Trustee, may rescind an acceleration and its consequences (other than nonpayment of principal of or premium, if any, or interest on or any Additional Interest with respect to the Notes) if the rescission would not conflict with any judgment or decree and if all existing Events of Default with respect to the Notes have been cured or waived, except nonpayment of principal, premium, if any, interest or any Additional Interest that has become due solely because of the acceleration.
SECTION 5.04. Payments of Notes on Default ; Suit Therefor. If an Event of Default described in clause (a) or (b) of Section 5.01 shall have occurred and be continuing, the Company shall, upon demand of the Trustee, pay to it, for the benefit of the holders of the Notes, the whole amount then due and payable on the Notes for principal, premium, if any, and interest, with interest on any overdue principal, premium, if any, interest, 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 Agent and the
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Trustee under Section 11.06 . 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 monies 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 any Bankruptcy Law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Company or such other obligor, the property of the Company or such other obligor, or in the event of any other judicial proceedings relative to the Company or such other obligor upon the Notes, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 5.04 , 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 premium, if any, and accrued and unpaid interest 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 of Notes 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 the Trustee under Section 11.06 ; and any receiver, assignee or trustee in bankruptcy or reorganization, liquidator, custodian or similar official is hereby authorized by each of the Holders of Notes 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 of Notes, to pay to the Trustee any amount due it for reasonable compensation, expenses, advances and disbursements, including agents and counsel fees and expenses, and including any other amounts due to the Trustee under Section 11.06 hereof, 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 of Notes any plan of reorganization, arrangement, adjustment or composition affecting the Holder of Notes or the rights of any Holder of Notes thereof, or to authorize the Trustee to vote in respect of the claim of any Holder of Notes in any such proceeding.
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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 such waiver or rescission and annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company, the Holders of Notes, and the Trustee shall, subject to any determination in such proceeding, be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Company, the Holders of Notes, and the Trustee shall continue as though no such proceeding had been instituted.
SECTION 5.05. Application of Monies Collected by the Agent or the Trustee . Any monies collected by the Agent or the Trustee pursuant to this Article 5 with respect to the Notes shall be applied in the order following, at the date or dates fixed by the Agent or 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 and/or the Agent under Section 11.06 ;
Second, in case the principal of the outstanding Notes shall not have become due and be unpaid, to the payment of interest on the Notes, including any Additional Interest, in default in the order of the date due of the installments of such interest, with interest (to the extent that such interest has been collected by the Agent or the Trustee) upon the overdue installments of interest 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 the payment of the Fundamental Change Purchase Price and the cash component of the Conversion Obligation, if any, then owing and unpaid
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upon the Notes for principal and premium, if any, and interest, including any Additional Interest, with interest on the overdue principal and premium, if any, 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 and premium, if any, and interest without preference or priority of principal and premium, if any, over interest, or of interest over principal and premium, if any, 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 and premium, if any, and accrued and unpaid interest; and
Fourth, to the payment of the remainder, if any, to the Company.
SECTION 5.06. Proceedings by Holders of Notes . No holder of any Note shall have any right by virtue of or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture, or for the appointment of a receiver, trustee, liquidator, custodian or other similar official, or for any other remedy hereunder, unless such holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof, as hereinbefore provided, and unless also the holders of not less than 25% in aggregate principal amount of the Notes then outstanding shall have made written request to the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and 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, and the Trustee for 60 days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding and 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 in principal amount of the Notes outstanding within such 60-day period pursuant to Section 5.09 ; 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 Noteholders 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 Noteholder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Noteholders), 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 Noteholders (except as otherwise provided herein). For the protection and enforcement of this Section 5.06 , each and every Noteholder 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 of Notes to (i) receive payment of principal of and premium, if any, and interest and any Additional Interest when due, (ii) receive payment or delivery of the consideration due upon conversion, (iii) receive the Fundamental Change Purchase Price when due, (iv) receive the Redemption Price when due in
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connection with an optional redemption or (v) bring suit for the enforcement of any of (i), (ii), (iii) and (iv) above, is absolute and unconditional and shall not be impaired or affected without the consent of such Holder.
Anything in this Indenture or the Notes to the contrary notwithstanding, the holder of any Note, without the consent of either the Trustee or the holder of any other Note, on its own behalf and for its own benefit, may enforce, and may institute and maintain any proceeding suitable to enforce, its rights of conversion as provided herein.
SECTION 5.07. Proceedings by Trustee . In case of an Event of Default the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as are necessary to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.08. Remedies Cumulative and Continuing . Except as provided in the last paragraph of Section 2.07 and Section 5.02 , all powers and remedies given by this Article 5 to the Trustee or to the Noteholders 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 any acquiescence therein; and, subject to the provisions of Section 5.06 , every power and remedy given by this Article 5 or by law to the Trustee or to the Noteholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Noteholders.
SECTION 5.09. Direction of Proceedings and Waiver of Defaults by Majority of Holders of Notes . The Holders of a majority in aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 12.04 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 Notes; provided , however , that (a) such direction shall not be in conflict with any rule of law or with this Indenture, and (b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. The Trustee may refuse to follow any direction that it determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. The Holders of a majority in aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 12.04 by notice to the Trustee may waive an existing or past Default or Event of Default with respect to such Notes and its consequences, except (1) a continuing Default or Event of Default in the payment of premium, accrued and unpaid interest or any accrued and unpaid Additional Interest on, or the principal (including any
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Fundamental Change Purchase Price or the Redemption Price in connection with an optional redemption) of, the Notes when due, (2) a continuing Default or Event of Default in the payment or delivery of any consideration due upon conversion of any Note, or (3) a continued Default in respect of a provision that under Article 7 cannot be amended or supplemented without the consent of each Holder affected. Upon any such waiver, 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 shall extend to any subsequent or other Default or impair any right consequent thereon. Whenever any Default or Event of Default hereunder shall have been waived as permitted by this Section 5.09 , 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 5.10. Notice of Defaults . The Trustee shall, within 90 days after the occurrence and continuance of a Default or Event of Default of which a Responsible Officer has actual knowledge, mail to all Noteholders as the names and addresses of such holders appear upon the Note Register, notice of all Defaults or Events of Default known to a Responsible Officer, unless such Defaults or Events of Default shall have been cured or waived before the giving of such notice; and provided that, except in the case of a Default or in the payment of the principal of, or premium, if any, accrued and unpaid interest including any accrued and unpaid Additional Interest on any of the Notes, including without limiting the generality of the foregoing any Default or Event of Default in the payment of any Fundamental Change Purchase Price, the Redemption Price in connection with an optional redemption, or a Default or Event of Default in the payment or delivery of consideration due upon conversion of the Notes, then in any such event the Trustee shall be protected in withholding such notice if and so long as a committee of Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interests of the Noteholders.
SECTION 5.11. Undertaking to Pay Costs . All parties to this Indenture agree, and each holder of any Note by its acceptance thereof shall be deemed to have agreed, that any court may, in its discretion, require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Agent or the Trustee for any action taken or omitted by it as Agent or Trustee (as applicable), 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 5.11 (to the extent permitted by law) shall not apply to any suit instituted by the Trustee, to any suit instituted by any Noteholder, or group of Noteholders, holding in the aggregate more than 10% in principal amount of the Notes at the time outstanding determined in accordance with Section 12.04 , or to any suit instituted by any Noteholder for the enforcement of the payment of the principal of or premium, if any, accrued and unpaid interest, if any, on any Note (including, but not limited to, the Fundamental Change Purchase 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 in accordance with the provisions of Article 4 .
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ARTICLE 6
MERGER, SALE, CONVEYANCE AND LEASE
SECTION 6.01. Company May Consolidate, Etc. on Certain Terms. Subject to the provisions of Section 6.02 , the Company shall not consolidate with, merge with or into, any other Person, or sell, convey, transfer or lease all or substantially all of its property and assets, to any Person or permit any Person to merge with or into the Company, unless:
(a) the resulting, surviving or transferee Person (if not the Company) (the Successor ) is a corporation organized and validly existing under the laws of the United States of America, any state thereof or the District of Columbia and such corporation (if not the Company) expressly assumes by an indenture supplemental hereto, all of the Companys obligations for the due and punctual payment of the principal of and interest on all the Notes and the performance and observance of every covenant of this Indenture and the Notes on the part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;
(c) if as a result of such transaction the Notes become convertible into Reference Property issued by a third party, such third party fully and unconditionally guarantees all obligations of the Company and such successor Person under the Notes and this Indenture; and
(d) the Company or such successor Person shall have delivered to the Trustee and the Agent an Officers Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and such supplemental indenture comply with this Article and that all conditions precedent provided for in the Indenture relating to such transaction have been complied with.
SECTION 6.02. Successor Person Substituted. Upon any consolidation or merger of the Company or any sale, lease, conveyance, transfer or other disposition of all or substantially all of the assets of the Company in accordance with Section 6.01 , the Successor formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance, transfer or other disposition is made shall succeed to, and be substituted for, and may exercise every right and power of the Company under this Indenture and the Securities with the same effect as if such Successor had been named as the Company herein and the predecessor Company, in the case of a sale, conveyance, transfer or other disposition, shall be released from all obligations under this Indenture and the Securities.
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ARTICLE 7
SUPPLEMENTAL INDENTURES
SECTION 7.01. Amendments or Supplements Without Consent of Holders. The Company, when authorized by the resolutions of the Board of Directors, the Paying Agent, and the Trustee, at the Companys expense, may amend or supplement this Indenture or the Notes or waive any provision hereof or thereof without the consent of any Holder for one or more of the following purposes:
(a) cure any ambiguity, omission, defect or inconsistency that does not adversely affect Holders of the Notes;
(b) provide for the assumption by a successor corporation of the obligations of the Company under the Indenture;
(c) add guarantees with respect to the Notes;
(d) secure the Notes;
(e) add to the covenants of the Company for the benefit of the Holders or surrender any right or power conferred upon the Company;
(f) make any change that does not adversely affect the rights of any Holder;
(g) appoint a successor trustee or agent with respect to the Notes; or
(h) conform the provisions of the Indenture to the Description of notes section in the Offering Memorandum.
Upon the written request of the Company, the Trustee and the Paying Agent are hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations that may be therein contained, but neither the Trustee nor the Paying Agent shall be obligated to, but may in its discretion, enter into any supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section 7.01 may be executed by the Company, the Trustee and the Paying Agent without the consent of the Holders of any of the Notes at the time outstanding, notwithstanding any of the provisions of Section 7.02 .
SECTION 7.02. Amendments, Supplements or Waivers With Consent of Holders. With the consent of the Holders of at least a majority in aggregate principal amount of the Notes at the time outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), the Company, when authorized by the resolutions of the Board of Directors, the Paying
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Agent and the Trustee, at the Companys expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or any supplemental indenture or of modifying in any manner the rights of the Holders of the Notes or waiving any past default; provided, however , that no such supplemental indenture shall, without the consent of each Holder of an outstanding Note affected:
(a) reduce the amount of Notes whose Holders must consent to an amendment;
(b) reduce the rate of or extend the stated time for payment of interest, including Additional Interest, on any Note;
(c) reduce the principal of or extend the stated maturity of any Note;
(d) make any change that adversely affects the conversion rights of any Notes;
(e) reduce the Fundamental Change Purchase Price or Redemption Price of any Note or amend or modify in any manner adverse to the Holders of Notes the Companys obligation to make such payments, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;
(f) change the place or currency of payment of principal or interest including any Additional Interest in respect of any Note;
(g) change the ranking of the Notes;
(h) impair the right of any Holder to receive payment of principal and interest, including Additional Interest, on such Holders Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holders Notes; or
(i) make any change to the subordination provisions of the Indenture if such change would adversely affect the rights of Holders; or
(j) make any change in this Section 7.02 or Section 5.09 , except to increase any such percentage or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the Holder of each Note so affected.
Upon the written request of the Company, and upon the filing with the Trustee and the Paying Agent of evidence of the consent of Noteholders as aforesaid and subject to Section 7.05 , the Trustee and the Paying Agent shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustees or the Paying Agents own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee or the Paying Agent may in its discretion, but shall not be obligated to, enter into such supplemental indenture.
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It shall not be necessary for the consent of the Noteholders under this Section 7.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof. After an amendment under this Indenture becomes effective, the Company shall mail to the holders a notice briefly describing such amendment. 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 amendment.
SECTION 7.03. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture pursuant to the provisions of this Article 7 , 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 Agent, the Company and the Noteholders shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.
SECTION 7.04. Notation on Notes. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article 7.04 may, at the Companys expense, bear a notation in form approved by the Authenticating Agent as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Notes so modified as to conform, in the opinion of the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may, at the Companys expense, be prepared and executed by the Company, authenticated by the Authenticating Agent and delivered in exchange for the Notes then outstanding, upon surrender of such Notes then outstanding.
SECTION 7.05. Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee. In addition to the documents required by Section 14.05 , the Trustee and the Paying Agent shall receive an Officers Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article 7 and is permitted or authorized by the Indenture.
ARTICLE 8
SUBORDINATION OF NOTES
SECTION 8.01. Notes Subordinate to Senior Indebtedness. The Company covenants and agrees, and each holder of a Note, whether upon original issue or upon registration of transfer, assignment or exchange hereof, by his acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article 8 , the indebtedness represented by the Notes and the payment of
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the principal amount, premium, if any, any cash portion of the Conversion Obligation in respect of, and interest on all Notes (including, but not limited to, the Fundamental Change Purchase Price with respect to the Notes subject to repurchase in accordance with Article 3 as provided in this Indenture) (collectively, the Subordinated Obligations ) are hereby expressly made subordinate and junior in right of payment to the prior payment in full in cash or other payment satisfactory to the holders of Senior Indebtedness of all Senior Indebtedness and that said subordination is for the benefit of the holders of Senior Indebtedness and they and/or each of them severally may enforce such subordination. The Notes will be pari passu in right of payment to all Senior Subordinated Indebtedness of the Company and senior in right of payment to all Subordinated Indebtedness of the Company.
SECTION 8.02. Payment Over of Proceeds Upon Dissolution, Etc. In the event of (a) any dissolution, insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to the Company or to its creditors, as such, or to its assets, or (b) any liquidation, dissolution or other winding up of the Company, in each case whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or any other marshaling of assets and liabilities of the Company upon any payment or distribution of the Companys assets or securities, then and in any such event the holders of Senior Indebtedness shall be entitled to receive payment in full in cash, or other payment satisfactory to the holders of Senior Indebtedness, of all amounts due or to become due on or in respect of all Senior Indebtedness before the holders of the Notes are entitled to receive any payment or distribution on account of the Subordinated Obligations, and to that end the holders of Senior Indebtedness or their representative or representatives or the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, shall be entitled to receive from the liquidating trustee or agent or other Person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, ratably according to the aggregate amounts remaining unpaid on account of the Senior Indebtedness held or represented by each, to the extent necessary to make payment in full in cash or other payment satisfactory to the holders of Senior Indebtedness of all Senior Indebtedness remaining unpaid, for application to the payment thereof, any payment or distribution of any kind or character, whether in cash, property or securities, which may be payable or deliverable in respect of the Subordinated Obligations in any such case, proceeding, dissolution, liquidation or other winding up or event, assignment or marshalling.
The consolidation of the Company with, or the merger of the Company with or into, another Person or the liquidation or dissolution of the Company following the sale, conveyance, transfer or lease of all or substantially all of its properties and assets to another Person upon the terms and conditions set forth in Article 6 hereof shall not be deemed a dissolution, winding up, liquidation, reorganization, assignment for the benefit of creditors or marshaling of assets and liabilities of the Company for the purposes of this Section 8.02 if the Person formed by such consolidation or with or into which the Company is merged or which acquires by sale, conveyance, transfer or lease all or substantially all of such properties and assets, as the case may be, shall, as a part of such consolidation, merger, sale, conveyance, lease or transfer, comply with the conditions set forth in Article 6 hereof.
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SECTION 8.03. No Payment When Senior Indebtedness in Default. (a) The Company may not make any payment of or distribution with respect to the Subordinated Obligations nor may the Company acquire, defease or repurchase any Notes if (i) a payment default on any Senior Indebtedness has occurred and is continuing with respect thereto (unless and until such payment default shall have been cured or waived in writing by the holders of such Senior Indebtedness); or (ii) a default (other than a default referred to in the preceding clause (i)) on any Designated Senior Indebtedness occurs and is continuing that permits holders of such Senior Indebtedness to accelerate the maturity thereof and either such default is the subject of judicial proceedings or the Paying Agent receives a written notice of default thereof that blocks payment under the Notes from any Person who may give such notice pursuant to the instrument evidencing or document governing such Designated Senior Indebtedness (a Senior Indebtedness Default Notice ). If the Company receives a Senior Indebtedness Default Notice, then a similar notice received within nine months thereafter relating to the same default on the same issue of Senior Indebtedness shall not be effective to prevent the payment or acquisition of the Notes for purposes of this Section 8.03 .
The Company may resume payment on the Notes and may acquire Notes for cash if and when (x) the default referred to in clause (i) or (ii) of the preceding paragraph above is cured or waived in writing or ceases to exist; or (y) in the case of a default referred to in clause (ii) of the preceding paragraph, 179 or more days pass after the receipt by the Company of the Senior Indebtedness Default Notice, and this Article 8 otherwise permits the payment or acquisition at that time.
Nothing contained in this Article 8 or elsewhere in this Indenture or in any of the Notes shall prevent the conversion by a holder of any Notes into shares of Common Stock in accordance with the provisions for conversion of such Notes set forth in this Indenture.
(b) In the event of an acceleration of the Notes as a result of an Event of Default, then and in such event the Company shall promptly notify holders of Senior Indebtedness of such acceleration. The Company may not pay, or make any distribution with respect to, the Notes until the earlier of (i) the passage of 120 or more days have passed after such acceleration occurs or (ii) the payment in full in cash or other payment satisfactory to the holders of Senior Indebtedness of all Senior Indebtedness, and may thereafter pay, or make any distribution with respect to, the Notes if this Article 8 permits the payment or distribution at that time.
(c) In the event that, notwithstanding the foregoing provisions, any payment or distribution of any kind or character, whether in cash, property or securities (including, without limitation, by way of setoff or otherwise), prohibited by this Article 8 , shall be received by the Paying Agent or the holders of the Notes before all Senior Indebtedness is paid in full in cash or other payment satisfactory to the holders of such Senior Indebtedness, such payment or distribution shall be held in trust for the
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benefit of and shall be paid over or delivered to the holders of Senior Indebtedness or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any Senior Indebtedness may have been issued, as their respective interests may appear for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in cash or other payment satisfactory to the holders of such Senior Indebtedness, after giving effect to any concurrent payment or distribution, or provision therefor, to or for the holders of such Senior Indebtedness.
SECTION 8.04. Payment Permitted If No Default. Nothing contained in this Article 8 or any other provision relating to subordination elsewhere in this Indenture or in any of the Notes shall prevent the Company, at any time except in the circumstances described in Section 8.02 and Section 8.03 , from making payments at any time of the principal amount of the Notes, any cash portion of the Conversion Obligation, interest, the repurchase price with respect to Notes submitted for repurchase in accordance with Article 3 , as the case may be, as provided in this Indenture.
SECTION 8.05. Subrogation to Rights of Holders of Senior Indebtedness. Subject to the payment in full of all Senior Indebtedness in cash, and until the Notes are paid in full, the holders of the Notes shall be subrogated (equally and ratably with the holders of all Senior Subordinated Indebtedness) to the rights of the holders of such Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness to the extent that payments and distributions otherwise payable to holders of Notes have been applied to the payment of Senior Indebtedness as provided by this Article 8 . For purposes of such subrogation, no payments or distributions to the holders of the Senior Indebtedness of any cash, property or securities to which the Holders of the Notes or the Paying Agent would be entitled, except for the provisions of this Article 8 , and no payments over pursuant to the provisions of this Article 8 to the holders of Senior Indebtedness by Holders of the Notes or the Paying Agent, shall, as among the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Notes, be deemed to be a payment or distribution by the Company to or on account of the Notes.
SECTION 8.06. Provisions Solely To Define Relative Rights. The provisions of this Article 8 are and are intended solely for the purpose of defining the relative rights of the holders of the Notes on the one hand and the holders of Senior Indebtedness on the other hand. Nothing contained in this Article 8 or elsewhere in this Indenture or in the Notes is intended to or shall (a) impair, as among the Company, its creditors other than holders of Senior Indebtedness and the holders of the Notes, the obligation of the Company, which is absolute and unconditional (and which, subject to the rights under this Article 8 of the holders of Senior Indebtedness, is intended to rank equally with all other general obligations of the Company), to pay to the holders of the Notes the principal amount of the Notes, any cash portion of the Conversion Obligation, interest, the repurchase price with respect to Notes submitted for repurchase in accordance with Article 3 , as the case may be, as provided in this Indenture as and when the same shall become due and payable in accordance with their terms; or (b) affect the relative rights against the Company of the holders of the Notes and creditors of the
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Company other than the holders of Senior Indebtedness; or (c) prevent the Paying Agent or the Holder of any Note from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article 8 of the holders of Senior Indebtedness to receive cash, property and securities otherwise payable or deliverable to the Paying Agent or such holder. If the Company fails, as a result of this Article 8 , to pay to the holders of the Notes the principal amount of the Notes, any cash portion of the Conversion Obligation, interest, the repurchase price with respect to Notes submitted for repurchase in accordance with Article 3 , as the case may be, as provided in this Indenture as and when the same shall become due and payable in accordance with their terms, such failure shall still constitute a Default or an Event of Default.
SECTION 8.07. Paying Agent to Effectuate Subordination. Each holder of a Note by his acceptance thereof authorizes and directs the Paying Agent on his behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article 8 and appoints the Paying Agent his attorney-in-fact for any and all such purposes.
SECTION 8.08. No Waiver of Subordination Provisions. No right of any present or future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any non-compliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Paying Agent or the holders of the Notes, without incurring responsibility to the holders of the Notes and without impairing or releasing the subordination provided in this Article 8 or the obligations hereunder of the holders of the Notes to the holders of Senior Indebtedness, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew, exchange, increase or alter, Senior Indebtedness, or otherwise amend, modify or supplement in any manner Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness or any security thereof or guarantee thereof is outstanding; (ii) sell, exchange, release, surrender, realize upon, enforce or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii) release any Person liable in any manner for the collection of Senior Indebtedness; (iv) exercise or refrain from exercising any rights against the Company and any other Person; (v) apply any and all sums received from time to time to the Senior Indebtedness; provided that if any Senior Indebtedness is amended to provide that it shall be subordinated to any other Senior Indebtedness, such amended Senior Indebtedness shall no longer be considered Senior Indebtedness for purposes of this Article 8 .
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The provisions of this Article 8 shall continue to be effective or be reinstated as the case may be if at any time any payment of the Senior Indebtedness is rescinded or must otherwise be returned by the holder thereof upon the insolvency, bankruptcy or reorganization of the Company or otherwise, all as though such payment had not been made.
SECTION 8.09. Notice to Paying Agent. The Company shall give prompt written notice to Responsible Officers of the Paying Agent of any fact known to the Company which would prohibit the making of any payment to or by the Paying Agent in respect of the Notes. Notwithstanding the provisions of this Article 8 or any other provision of this Indenture, the Paying Agent shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or distribution by the Paying Agent in respect of the Notes, unless and until a Responsible Officers of the Paying Agent shall have received written notice thereof from the Company or a holder of Senior Indebtedness or from any trustee therefor; and, prior to the receipt of any such written notice, the Paying Agent, subject to the provisions of Section 11.01 , shall be entitled in all respects to assume that no such facts exist; provided, however , that if the Paying Agent shall not have received the notice provided for in this Section 8.09 at least two Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose, then, anything herein contained to the contrary notwithstanding, the Paying Agent shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within two Business Days prior to such date.
Subject to the provisions of the Indenture, the Paying Agent shall be entitled to rely conclusively on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness (or a trustee therefor) to establish that such notice has been given by a holder of Senior Indebtedness (or a trustee therefor). In the event that the Paying Agent determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article 8 (although the Paying Agent is not obligated to make such determination), the Paying Agent and the Agent (as applicable) may request such Person to furnish evidence to the reasonable satisfaction of the Paying Agent as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article 8 , and if such evidence is not furnished, the Paying Agent may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment.
SECTION 8.10. Reliance on Judicial Order or Certificate of Liquidating Agent. Upon any payment or distribution of assets of the Company referred to in this Article 8 , the Paying Agent, subject to the provisions of the Indenture, and the holders of the Notes shall be entitled to conclusively rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such
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payment or distribution, delivered to the Paying Agent or to the holders of Notes, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 8 .
SECTION 8.11. Paying Agent Not Fiduciary for Holders of Senior Indebtedness. The Paying Agent shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and (subject to Section 8.09 hereof) shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to holders of Notes or to the Company or to any other Person cash, property or securities to which any holders of Senior Indebtedness shall be entitled by virtue of this Article 8 or otherwise.
SECTION 8.12. Rights of Paying Agent as Holder of Senior Indebtedness; Preservation of Paying Agents Rights. The Paying Agent in its individual capacity shall be entitled to all the rights set forth in this Article 8 with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Paying Agent of any of its rights as such holder.
Nothing in this Article 8 shall apply to claims of, or payments to, the Trustee or the Paying Agent under or pursuant to Section 11.06 .
SECTION 8.13. [Reserved] .
SECTION 8.14. No Senior Subordinated Indebtedness. The Company shall not, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to any indebtedness that is subordinate or junior in right of payment to any Senior Indebtedness and senior in right of payment to the Notes.
SECTION 8.15. Amendment of Subordination Provisions. Any Senior Indebtedness will continue to be Senior Indebtedness and will be entitled to the benefits of the subordination provisions of this Article 8 irrespective of any amendment, modification or waiver of any of such subordination provisions.
ARTICLE 9
COVENANTS OF THE COMPANY
SECTION 9.01. Payment of Principal, Premium and Interest. The Company covenants and agrees that it will cause to be paid the principal of and premium, if any (including the Fundamental Change Purchase Price), and accrued and unpaid interest on each of the Notes at the places, at the respective times and in the manner provided herein and in the Notes.
SECTION 9.02. Maintenance of Office or Agency. The Company will maintain an office or agency where the Notes may be surrendered for registration of
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transfer or exchange or for presentation for payment or repurchase ( Paying Agent ) or for conversion ( Conversion Agent ) and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company will give prompt written notice to the Trustee and the Agent 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 and the Agent with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office.
The Company may also from time to time designate co-registrars, one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency for such purposes. The Company will give prompt written notice to the Trustee and the Agent 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 Citibank, N.A. as the Paying Agent, Note Registrar and Conversion Agent and the Corporate Trust Office of the Agent shall be considered as one such office or agency of the Company for each of the aforesaid purposes.
SECTION 9.03. Appointments to Fill Vacancies in Trustees and the Agents Office. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee or Agent, will appoint, in the manner provided in Section 11.10 , a Trustee or Agent (as applicable), so that there shall at all times be a Trustee and Agent hereunder.
SECTION 9.04. Provisions as to Paying Agent. (a) If the Company shall appoint a Paying Agent other than Citibank, N.A. or 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 9.04 :
(i) that it will hold all sums held by it as such agent for the payment of the principal of and premium, if any, and accrued and unpaid interest on the Notes in trust for the benefit of the holders of the Notes;
(ii) that it will give the Trustee prompt notice of any failure by the Company to make any payment of the principal of and premium, if any, and accrued and unpaid interest on the Notes when the same shall be due and payable; and
(iii) that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.
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The Company shall, by 11:00 a.m., New York City time at least one Business Day prior to each due date of the principal of, or premium (including the Fundamental Change Purchase Price or the Redemption Price in connection with an optional redemption), if any, or accrued and unpaid interest on the Notes, deposit with the Paying Agent a sum sufficient to pay such principal, premium (including the Fundamental Change Purchase Price or the Redemption Price in connection with an optional redemption), if any, or accrued and unpaid interest and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of any failure to take such action, provided , however , that to the extent any such funds are received by the Paying Agent from the Company after 11:00 a.m. (local time in The City of New York) on such date, such funds will be deemed to have been deposited within one Business Day of the receipt thereof.
(b) If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal of, premium (including the Fundamental Change Purchase Price or the Redemption Price in connection with an optional redemption), if any, 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, premium (including the Fundamental Change Purchase Price or the Redemption Price in connection with an optional redemption), if any, 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 of, premium (including the Fundamental Change Purchase Price or the Redemption Price in connection with an optional redemption), if any, accrued and unpaid interest on the Notes when the same shall become due and payable.
(c) Anything in this Section 9.04 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 or cause to be paid to the Agent all sums held in trust by the Company or any Paying Agent hereunder as required by this Section 9.04 , such sums to be held by the Trustee upon the trusts herein contained, and upon such payment by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from all further liability with respect to such sums.
(d) Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or premium (including the Fundamental Change Purchase Price or the Redemption Price in connection with an optional redemption), if any, or accrued and unpaid interest on any Note and remaining unclaimed for two years after such principal, premium (including the Fundamental Change Purchase Price or the Redemption Price in connection with an optional redemption) or interest has become due and payable shall be paid to the Company on request of the Company contained in an Officers Certificate, or (if then held by the Company) shall be discharged from such trust; and the holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however , that the Trustee or such Paying Agent, before being required to make
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any such repayment, shall at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 9.05. Existence. Subject to Article 6 , the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.
SECTION 9.06. Reports by the Company. (a) The Company shall deliver to the Agent within 15 days after the same is required to be filed with the Commission, copies of the quarterly and annual reports and of the information, documents and other reports, if any, that the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act). Any quarterly or annual report or other information, document or other report that the Company files with the Commission pursuant to Section 13 or 15(d) of the Exchange Act on the Commissions EDGAR system shall be deemed to constitute delivery of such filing to the Agent as of the time such documents are filed with EDGAR.
(b) Delivery of the reports, information and documents described in clause (a) above to the Agent is for informational purposes only, and the Agent does not have the duty to review such information, documents or reports, is not considered to have notice of the content of such information, documents or reports and does not have a duty to verify the accuracy of such information, documents or reports. The Agents receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Companys compliance with any of its covenants hereunder (as to which the Agent is entitled to rely exclusively on Officers Certificates).
(c) At any time the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company shall, so long as any of the Notes or any shares of Common Stock issuable upon conversion thereof shall, at such time, constitute restricted securities within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide to the Agent and shall, upon written request, provide 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. The Company shall take such further action as any Holder or beneficial owner of such Notes or such Common Stock may reasonably request to the extent from time to time required to enable such Holder or beneficial owner to sell such Notes or shares of Common Stock in accordance with Rule 144A, as such rule may be amended from time to time
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SECTION 9.07. Stay, Extension and Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law that would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the performance of this Indenture; and the Company (to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee or the Agent, but will suffer and permit the execution of every such power as though no such law had been enacted.
SECTION 9.08. Compliance Certificate; Statements as to Defaults. The Company shall deliver to the Trustee and the Agent, (i) within 120 days after the end of each Fiscal Year (beginning with the Fiscal Year ending on October 31, 2014), an Officers Certificate indicating whether or not the signers thereof have knowledge of the occurrence of any Event of Default under the Indenture during such fiscal year, and (ii) within 30 days after the occurrence thereof, written notice of any events that would constitute an Event of Default under the Indenture, the status of such events and the action that the Company is taking or proposes to take in respect thereof.
SECTION 9.09. Further Instruments and Acts. The Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.
SECTION 9.10. Rule 144A Information . (a) If, at any time during the six-month period beginning on, and including, the date that is six months after the last date of original issuance of the Notes, the Company fails to timely file any document or report that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace periods thereunder and other than current reports on Form 8-K), or the Notes are not otherwise freely tradable by Holders other than the Companys Affiliates or Holders that were the Companys Affiliates at any time during the three months preceding (as a result of restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes), the Company shall pay Additional Interest on the Notes. In such circumstances, for the first 90 days, Additional Interest shall accrue on the Notes at the rate of 0.25% per annum and for the remaining period at a rate of 0.50% per annum, in each case, of the principal amount of the Notes outstanding for each day during such period for which the Companys failure to file has occurred and is continuing or the Notes are not otherwise freely tradable by Holders other than the Companys Affiliates (or Holders that have been the Companys Affiliates at any time during the three months preceding) without restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes. As used in this Section 9.10(a) , documents or reports that the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act does not include documents or reports that the Company furnishes to the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
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(b) If, and for so long as, the restrictive legend on the Notes specified in Section 2.04(a) has not been removed (or deemed removed pursuant to this Indenture), the Notes are assigned a restricted CUSIP number or the Notes are not otherwise freely tradable by Holders other than the Companys Affiliates or Holders that were the Companys Affiliates at any time during the three months preceding as of the 370th day after the last date of original issuance of the Notes, the Company shall pay Additional Interest on the Notes at a rate equal to (i) 0.25% per annum of the principal amount of Notes outstanding for the first 90 days and (ii) 0.50% per annum of the principal amount of Notes outstanding following the first 90 days and, in the case of both clauses (i) and (ii), until the restrictive legend on the Notes has been removed in accordance with Section 2.05(c) , the Notes are assigned an unrestricted CUSIP and the Notes are freely tradable by Holders other than the Companys Affiliates (or Holders that were the Companys Affiliates at any time during the three months preceding) (without restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes).
(c) Additional Interest will be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on the Notes.
(d) Notwithstanding anything herein to the contrary, at no time shall the Company be required to pay both the Additional Interest that is payable in accordance with Section 9.10(a) or Section 9.10(b) and any Additional Interest that may be payable as a result of the Companys election pursuant to Section 5.02 .
(e) If Additional Interest is payable by the Company pursuant to Section 9.10(a) or Section 9.10(b) , the Company shall deliver to the Trustee and the Paying Agent an Officers Certificate to that effect stating (i) the amount of such Additional Interest that is payable and (ii) the date on which such Additional Interest is payable. Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Additional Interest is payable. If the Company has paid Additional Interest directly to the Persons entitled to it, the Company shall promptly deliver to the Trustee an Officers Certificate setting forth the particulars of such payment.
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ARTICLE 10
LISTS OF NOTEHOLDERS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 10.01. Lists of Noteholders. The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee and the Paying Agent, semi-annually, not more than fifteen days after each January 15 and July 15 in each year, beginning with January 15, 2010, and at such other times as the Trustee and the Paying Agent may request in writing, within 30 days after receipt by the Company of any such request (or such lesser time as the Trustee and the Paying Agent 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 and the Paying Agent may reasonably require of the names and addresses of the Noteholders as of a date not more than fifteen days (or such other date as the Trustee and the Paying Agent 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 10.02. Preservation and Disclosure of Lists. The Trustee and the Paying Agent shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the Noteholders contained in the most recent list furnished to it as provided in Section 10.01 or maintained the Note Registrar. The Trustee and the Paying Agent may destroy any list furnished to it as provided in Section 10.01 upon receipt of a new list so furnished.
SECTION 10.03. [Reserved].
ARTICLE 11
CONCERNING THE TRUSTEE AND THE AGENT
SECTION 11.01. Duties and Responsibilities of Trustee and Agent. The Trustee, except during the occurrence of an Event of Default, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee. In case an Event of Default has occurred (which has not been cured or waived) the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such persons 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 to the Trustee indemnity or security satisfactory to it against the costs, expenses and liabilities 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 or the Agent from liability for its own negligent action, its own negligent failure to act or its own intentional misconduct, except that:
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(a) prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default that may have occurred:
(i) the duties and obligations of the Trustee and the Agent shall be determined solely by the express provisions of this Indenture and the Trustee and the Agent 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 or the Agent; and
(ii) in the absence of intentional misconduct on the part of the Trustee or the Agent, the Trustee or the Agent 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 or the Agent 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 or the Agent, the Trustee or the Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein);
(b) neither the Trustee nor the Agent shall be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee or the Agent (as applicable), unless it shall be proved that the Trustee or the Agent, as applicable, was negligent in ascertaining the pertinent facts;
(c) neither the Trustee nor the Agent shall 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 in principal amount of the Notes at the time outstanding determined as provided in Section 12.04 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee or the Agent, or exercising any trust or power conferred upon the Trustee or the Agent, under this Indenture;
(d) whether or not therein provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Trustee or the Agent shall be subject to the provisions of this Section;
(e) neither the Trustee nor the Agent shall be liable in respect of any payment (as to the correctness of amount, entitlement to receive or any other matters relating to payment) or notice effected by the Company or any Paying Agent or any records maintained by any co-registrar with respect to the Notes;
(f) if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to the Trustee or the Agent, the Trustee or the Agent may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred, unless such Responsible Officer of the Trustee or the Agent had actual knowledge of such event;
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(g) in the absence of written investment direction from the Company, all cash received by the Trustee or the Agent shall be placed in a non-interest bearing trust account, and in no event shall the Trustee or the Agent be liable for the selection of investments or for investment losses incurred thereon or for losses incurred as a result of the liquidation of any such investment prior to its maturity date or the failure of the party directing such investments prior to its maturity date or the failure of the party directing such investment to provide timely written investment direction, and the Trustee or the Agent shall have no obligation to invest or reinvest any amounts held hereunder in the absence of such written investment direction from the Company;
(h) in the event that the Trustee or the Agent is also acting as Custodian, Note Registrar, Paying Agent, Conversion Agent or transfer agent hereunder, the rights and protections afforded to the Trustee or the Agent pursuant to this Article 11 shall also be afforded to such Custodian, Note Registrar, Paying Agent, Conversion Agent or transfer agent, as applicable;
(i) neither the Trustee nor the Agent shall have a duty to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind;
(j) neither the Trustee nor the Agent shall be required to give any bond or surety in respect of the powers granted hereunder;
(k) none of the provisions contained in this Indenture shall require the Trustee or the Agent 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;
(l) neither the Trustee nor the Agent shall be required to give any bond or surety in respect of the performance of its powers and duties hereunder; and
(m) the Trustee or the Agent 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; and
(n) no provision of this Indenture shall be deemed to impose any duty or obligation on the Agent or the Trustee to take or omit to take any action, or suffer any action to be taken or omitted, in the performance of its duties or obligations, or the exercise any right or power, to the extent that taking or omitting to take such action or suffering such action to be taken or omitted would violate applicable law binding upon it (which determination may be based on the advice or opinion of counsel).
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SECTION 11.02. Reliance on Documents, Opinions, Etc. Except as otherwise provided in Section 11.01 :
(a) the Trustee and the Agent may conclusively rely and shall be fully protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, Note, coupon or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any Board Resolution may be evidenced to the Trustee and the Agent by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) each of the Agent and the Trustee may consult with counsel of its selection and require an Opinion of Counsel and any advice of such counsel or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;
(d) each of the Agent and the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Noteholders pursuant to the provisions of this Indenture, unless such Noteholders shall have offered to the Trustee or the Agent, as applicable, security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred therein or thereby;
(e) neither the Agent nor the Trustee shall 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 or the Agent, in their respective discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee or Agent, as the case may be, shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company at reasonable times, in a reasonable manner and upon reasonable advance notice, personally or by agent or attorney at the expense of the Company and shall incur no liability of any kind by reason of such inquiry or investigation;
(f) each of the Agent and 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 or the Agent, as the case may be, 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;
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(g) the permissive rights of the Trustee and the Agent enumerated herein shall not be construed as duties; and
(h) neither the Trustee nor the Agent 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.
In no event shall the Trustee or the Agent be liable for any consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee or the Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. The Trustee and the Agent shall not be charged with knowledge of any Default or Event of Default, except (1) any Default or Event of Default of which a Responsible Officer shall have actual knowledge or (2) any Default or Event of Default of which written notice shall have been received by the Trustee or the Agent at their respective Corporate Trust Offices by the Company or by any holder of the Notes during any period it is serving as Note Registrar and Paying Agent for the Notes and such notice references the Notes and the Indenture, any Event of Default occurring pursuant to Sections 5.01(a) , 5.01(b) , 5.01(i) or 5.01(j) .
SECTION 11.03. No Responsibility for Recitals, Etc. The recitals contained herein and in the Notes (except in the Trustees or the Agents certificate of authentication) shall be taken as the statements of the Company, and the Trustee and the Agent assume no responsibility for the correctness of the same. The Trustee and the Agent make no representations as to the validity or sufficiency of this Indenture or of the Notes. Neither the Trustee nor the Agent shall 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 other than the Authenticating Agents certificate of authentication.
SECTION 11.04. Trustee, Paying Agents, Conversion Agents or Note Registrar May Own Notes. The Trustee, any Paying Agent, any Conversion Agent 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 or Note Registrar.
SECTION 11.05. Monies to be Held in Trust. All monies received by the Trustee or the Agent shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Money held by the Trustee or the Agent in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee and the Agent shall be under no liability for interest on any money received by it hereunder except as may be agreed in writing from time to time by the Company, the Trustee and the Agent.
SECTION 11.06. Compensation and Expenses of Trustee and Agent. The Company covenants and agrees to pay to the Trustee and the Agent from time to time, and the Trustee and the Agent shall be entitled to, such compensation as shall be agreed
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in writing between the Company and the Trustee or the Agent for all services rendered by them 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), and the Company will pay or reimburse the Trustee and the Agent upon their request for all reasonable expenses, disbursements and advances reasonably incurred or made and reasonably documented by the Trustee and the Agent in accordance with any of the provisions of this Indenture in any capacity thereunder (including the reasonable compensation and the expenses and disbursements of its agents and counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as shall have been caused by its gross negligence or intentional misconduct. The Company also covenants to indemnify the Trustee and the Agent in any capacity under this Indenture and any other document or transaction entered into in connection herewith and to hold it harmless against, any and all loss, claim, damage, liability or expense, including taxes (other than taxes based on the income of the Trustee and the Agent), incurred without gross negligence or intentional misconduct on the part of the Trustee or the Agent, as the case may be, and arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending the Trustee or the Agent against any claim (whether asserted by the Company, a Noteholder or any other Person) of liability in the premises. The obligations of the Company under this Section 11.06 to compensate or indemnify the Trustee and the Agent and to pay or reimburse the Trustee and the Agent 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 or the Agent, except, subject to the effect of Section 5.05 , funds held in trust herewith for the benefit of the holders of particular Notes. The Trustees or Agents right to receive payment of any amounts due under this Section 11.06 shall not be subordinate to any other liability or Indebtedness of the Company (even though the Notes may be so subordinated). The obligations of the Company under this Section 11.06 shall survive the satisfaction and discharge of this Indenture and the earlier resignation or removal or the Trustee or the Agent, as the case may be. 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 11.06 shall survive the termination or defeasance of this Indenture and the resignation or removal of the Trustee or the Agent, as the case may be. The Trustee or the Agent shall notify the Company promptly of any claim of which a Responsible Officer receives written notice for which it may seek indemnity.
Without prejudice to any other rights available to the Trustee or the Agent under applicable law, when the Trustee, the Agent and their agents and any authenticating agent incur expenses or render services after an Event of Default specified in clauses (i) or (j) of Section 5.01 occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy, insolvency or similar laws.
SECTION 11.07. Officers Certificate as Evidence. Except as otherwise provided in Section 11.01 , whenever in the administration of the provisions of this Indenture the Trustee or the Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter
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(unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by an Officers Certificate delivered to the Trustee or the Agent, and such Officers Certificate shall be full warrant to the Trustee or the Agent for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof.
SECTION 11.08. [Reserved] .
SECTION 11.09. Eligibility of Trustee and Agent. There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition. 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 11.10. Resignation or Removal of Trustee. (a) The Trustee and the Agent (as applicable) may at any time resign by giving written notice of such resignation to the Company and by mailing notice thereof to the Noteholders at their addresses as they shall appear on the Note Register. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee or agent (as applicable) 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 or Agent (as applicable) and one copy to the successor trustee or agent (as applicable). If no successor trustee or agent (as applicable) shall have been so appointed and have accepted appointment within 60 days after the mailing of such notice of resignation to the Noteholders, the resigning Trustee or Agent (as applicable) may, upon ten Business Days notice to the Company and the Noteholders, petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor trustee or agent (as applicable), or any Noteholder who has been a bona fide holder of a Note or Notes for at least six months may, subject to the provisions of Section 5.11 , on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee or agent (as applicable). Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee or agent (as applicable).
(b) In case at any time any of the following shall occur:
(i) the Trustee or Agent (as applicable) shall fail to comply with Section 11.08 within a reasonable time after written request therefor by the Company or by any Noteholder who has been a bona fide holder of a Note or Notes for at least six months, or
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(ii) the Trustee or Agent (as applicable) shall cease to be eligible in accordance with the provisions of Section 11.09 and shall fail to resign after written request therefor by the Company or by any such Noteholder, or
(iii) the Trustee or Agent (as applicable) shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, the Company may by a Board Resolution remove the Trustee or Agent (as applicable) and appoint a successor trustee or agent (as applicable) by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee or Agent so removed and one copy to the successor trustee or agent (as applicable), or, subject to the provisions of Section 5.11 , any Noteholder who has been a bona fide holder of a Note or Notes for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee or Agent (as applicable) and the appointment of a successor trustee or agent (as applicable). Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee or Agent (as applicable) and appoint a successor trustee or agent (as applicable).
(c) The holders of a majority in aggregate principal amount of the Notes at the time outstanding, as determined in accordance with Section 12.04 , may at any time remove the Trustee or Agent (as applicable) and nominate a successor trustee or agent (as applicable) that shall be deemed appointed as successor trustee or agent (as applicable) unless within ten days after notice to the Company of such nomination the Company objects thereto, in which case the Trustee or Agent (as applicable) so removed or any Noteholder, upon the terms and conditions and otherwise as in Section 11.10(a) provided, may petition, at the expense of the Company, any court of competent jurisdiction for an appointment of a successor trustee or agent (as applicable).
(d) Any resignation or removal of the Trustee or Agent (as applicable) and appointment of a successor trustee or agent (as applicable) pursuant to any of the provisions of this Section 11.10 shall become effective upon acceptance of appointment by the successor trustee or agent (as applicable) as provided in Section 11.11 .
SECTION 11.11. Acceptance by Successor Trustee or Agent. Any successor trustee or agent appointed as provided in Section 11.10 shall execute, acknowledge and deliver to the Company and to its predecessor trustee or agent an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee or agent shall become effective and such successor trustee or agent, without any further act, deed or conveyance, shall become vested with
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all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as trustee or agent herein; but, nevertheless, on the written request of the Company or of the successor trustee or agent, the trustee or agent ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 11.06 , execute and deliver an instrument transferring to such successor trustee or agent all the rights and powers of the trustee or agent so ceasing to act.
Upon the reasonable written request of any such successor trustee or agent, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee or agent all such rights and powers. Any trustee or Agent 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 or agent 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 11.06 .
No successor trustee or agent shall accept appointment as provided in this Section 11.11 unless at the time of such acceptance such successor trustee or agent shall be qualified under the provisions of Section 11.08 and be eligible under the provisions of Section 11.09 .
Upon acceptance of appointment by a successor trustee or agent as provided in this Section 11.11 , each of the Company and the successor trustee or agent, at the written direction and at the expense of the Company, shall mail or cause to be mailed notice of the succession of such trustee or agent hereunder to the Noteholders at their addresses as they shall appear on the Note Register. If the Company fails to mail such notice within ten days after acceptance of appointment by the successor trustee or agent, the successor trustee or agent shall cause such notice to be mailed at the expense of the Company.
SECTION 11.12. Succession by Merger, Etc. Any corporation or other entity into which the Trustee or Agent may be merged or converted or with which it may be consolidated, or any corporation or other entity resulting from any merger, conversion or consolidation to which the Trustee or Agent shall be a party, or any corporation or other entity succeeding to all or substantially all of the corporate trust business of the Trustee or the Agent, as the case may be (including the administration of this Indenture), shall be the successor to the Trustee or the Agent 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 or the Agent (as applicable), such corporation or other entity shall be qualified under the provisions of Section 11.08 and eligible under the provisions of Section 11.09 .
In case at the time such successor to the Trustee or the Agent, as the case may be, 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 or Agent may adopt the certificate of authentication of any predecessor authenticating agent, and deliver
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such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Authenticating Agent may authenticate such Notes either in the name of any predecessor trustee or agent hereunder or in the name of the successor trustee or agent; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Authenticating Agent shall have; provided, however , that the right to adopt the certificate of authentication of any predecessor Authenticating Agent or to authenticate Notes in the name of any predecessor Authenticating Agent shall apply only to its successor or successors by merger, conversion or consolidation.
SECTION 11.13. [Reserved].
SECTION 11.14. Trustees or Agents Application for Instructions from the Company. Any application by the Trustee or Agent 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 or Agent that affects the rights of the holders of the Notes under this Indenture) may, at the option of the Trustee or the Agent, set forth in writing any action proposed to be taken or omitted by the Trustee or the Agent under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. Neither the Trustee nor the Agent shall be liable for any action taken by, or omission of, the Trustee or the Agent, as the case may be, in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after the date any officer that the Company has indicated to the Trustee and the Agent should receive such application actually receives such application, unless any such officer shall have consented in writing to any earlier date), unless, prior to taking any such action (or the effective date in the case of any omission), the Trustee and the Agent shall have received written instructions in accordance with this Indenture in response to such application specifying the action to be taken or omitted.
ARTICLE 12
CONCERNING THE NOTEHOLDERS
SECTION 12.01. Action by Noteholders. Whenever in this Indenture it is provided that the holders of a specified percentage in 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 Noteholders in person or by agent or proxy appointed in writing, or (b) by the record of the Noteholders voting in favor thereof at any meeting of Noteholders, or (c) by a combination of such instrument or instruments and any such record of such a meeting of Noteholders. Whenever the Company, the Agent or the Trustee solicits the taking of any action by the holders of the Notes, the Company, the Agent or the Trustee may, but shall not be required to, fix in advance of such solicitation, a date as the record date for determining Noteholders 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.
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SECTION 12.02. Proof of Execution by Noteholders. Subject to the provisions of Section 11.01 and Section 11.02 , proof of the execution of any instrument by a Noteholder 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 the Agent or in such manner as shall be satisfactory to the Trustee or the Agent. The holding of Notes shall be proved by the Note Register or by a certificate of the Note Registrar.
SECTION 12.03. Who Are Deemed Absolute Owners. The Company, the Trustee, the Agent, any authenticating agent, any Paying Agent, any Conversion Agent and any Note Registrar may deem the Person in whose name a Note shall be registered upon the Note Register to be, and may treat it as, the absolute owner of such Note (whether or not such Note shall be overdue and notwithstanding any notation of ownership or other writing thereon made by any Person other than the Company or any Note Registrar) for the purpose of receiving payment of or on account of the principal of, premium, if any, and (subject to Section 2.03 ) accrued and unpaid interest on such Note, for conversion of such Note and for all other purposes; and neither the Company nor the Trustee nor any Paying Agent nor any Conversion Agent nor any Note Registrar shall be affected by any notice to the contrary. All such payments so made to any holder for the time being, or upon its order, shall be valid and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for monies payable upon any such Note. Notwithstanding anything to the contrary in this Indenture or the Notes following an Event of Default, any holder of a beneficial interest in a Global Note may directly enforce against the Company, without the consent, solicitation, proxy, authorization or any other action of the Depositary or any other Person, such holders right to exchange such beneficial interest for a Note in certificated form in accordance with the provisions of this Indenture.
SECTION 12.04. Company-Owned Notes Disregarded. In determining whether the holders of the requisite aggregate principal amount of Notes have concurred in any direction, consent, waiver or other action under this Indenture, Notes that are owned by the Company or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company 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 or the Agent shall be protected in relying on any such direction, consent, waiver or other action only Notes that a Responsible Officer actually knows are so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as outstanding for the purposes of this Section 12.04 if the pledgee shall establish to the satisfaction of the Trustee or the Agent the pledgees right to so act with respect to such Notes and that the pledgee is not the Company or a Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company. In the case of a dispute as to such right, any decision by the Trustee or the Agent 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 or the Agent promptly an Officers Certificate listing and
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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 11.01 , the Trustee or the Agent shall be entitled to accept such Officers Certificate as conclusive evidence of the facts therein set forth and of the fact that all Notes not listed therein are outstanding for the purpose of any such determination.
SECTION 12.05. Revocation of Consents; Future Noteholders Bound. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 12.01 , of the taking of any action by the holders of the percentage in 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 and the Agent at their Corporate Trust Office and upon proof of holding as provided in Section 12.02 , revoke such action so far as concerns such Note. Except as aforesaid, any such action taken by the holder of any Note shall be conclusive and binding upon such holder and upon all future holders and owners of such Note and of any Notes issued in exchange or substitution therefor or upon registration of transfer thereof, irrespective of whether any notation in regard thereto is made upon such Note or any Note issued in exchange or substitution therefor or upon registration of transfer thereof.
ARTICLE 13
SATISFACTION AND DISCHARGE
SECTION 13.01. Satisfaction and Discharge of the Indenture. When (i) the Company shall deliver to the Note Registrar for cancellation all Notes theretofore authenticated (other than any Notes that have been destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) and not theretofore canceled, or (ii) all the Notes not theretofore canceled or delivered to the Paying Agent for cancellation shall have become due and payable (whether at Stated Maturity for the payment of the principal amount thereof or on any Fundamental Change Purchase Date, optional redemption or upon conversion or otherwise or will become due and payable, due to the writing of a Redemption Notice or otherwise, in one year) and the Company shall deposit with the Paying Agent, in trust, or deliver to the Holders, as applicable, cash funds and/or (in the case of conversion) shares of Common Stock (subject to the Companys right to pay cash in lieu thereof), as applicable, sufficient to pay all amounts due or deliverable on all of such Notes (other than any Notes that shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) not theretofore canceled or delivered to the Paying Agent for cancellation, including principal and interest due, accompanied, except in the event the Notes are due and payable solely in cash at the Stated Maturity of the Notes or upon an earlier Fundamental Change Purchase Date or upon an optional redemption, by a verification report as to the sufficiency of the deposited amount from an independent certified accountant or other financial professional reasonably satisfactory to the Paying Agent (which may include any of the Initial Purchasers), and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect
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(except as to (A) rights hereunder of Holders of the Notes to receive all amounts owing upon the Notes and the other rights, duties and obligations of Holders of the Notes, as beneficiaries hereof with respect to the amounts, if any, so deposited with the Paying Agent and (B) the rights, obligations and immunities of the Paying Agent hereunder), and the Paying Agent, on written demand of the Company accompanied by an Officers Certificate and an Opinion of Counsel and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture; the Company, however, hereby agrees to reimburse the Paying Agent for any costs or expenses thereafter reasonably and properly incurred by the Paying Agent, including the fees and expenses of its counsel, and to compensate the Paying Agent for any services thereafter reasonably and properly rendered by the Paying Agent in connection with this Indenture or the Notes. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Agent and the Paying Agent under Section 11.06 shall survive.
SECTION 13.02. Deposit of Monies to be Held in Trust by Trustee. Subject to Section 13.04 , all monies deposited with the Paying Agent pursuant to Section 13.01 shall be held in trust for the sole benefit of the Holders of the Notes, and such monies shall be applied by the Paying Agent to the payment to the Holders of the particular Notes for the payment or redemption of which such monies have been deposited with the Paying Agent, of all sums due and to become due thereon for principal and interest, if any.
SECTION 13.03. Paying Agent to Repay Monies Held. Upon the satisfaction and discharge of this Indenture, all monies then held by the Paying Agent shall, upon written request of the Company, be repaid to it, and thereupon such Paying Agent shall be released from all further liability with respect to such monies.
SECTION 13.04. Return of Unclaimed Monies. Subject to the requirements of applicable law, any monies deposited with or paid to the Paying Agent for payment of the principal of or interest, if any, on the Notes and not applied but remaining unclaimed by the Holders of the Notes for two years after the date upon which the principal of or interest, if any, on such Notes, as the case may be, shall have become due and payable, shall be repaid to the Company by the Paying Agent on demand, and all liability of the Paying Agent shall thereupon cease with respect to such monies; and the Holder of any of the Notes shall thereafter look only to the Company for any payment that such Holder of the Notes may be entitled to collect unless an applicable abandoned property law designates another Person.
SECTION 13.05. Reinstatement. If the Paying Agent is unable to apply any money in accordance with Section 13.02 by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Companys obligations under the Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 13.01 until such time as the Paying Agent is permitted to apply all such money in accordance with Section 13.02 ; provided, however , that if the Company makes any payment of interest on or principal of any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Paying Agent.
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ARTICLE 14
MISCELLANEOUS
SECTION 14.01. Provisions Binding on Companys 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 14.02. Official Acts by Successor Corporation. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation or other entity that shall at the time be the lawful successor of the Company.
SECTION 14.03. Addresses for Notices, Etc. Any notice or demand that by any provision of this Indenture is required or permitted to be given or served by the Trustee, the Agent or by the Noteholders on the Company shall be deemed to have been sufficiently given or made, for all purposes if given or served by being deposited postage prepaid by registered or certified mail in a post office letter box addressed (until another address is filed by the Company with the Agent and the Trustee) to Navistar International Corporation, 4201 Winfield Road, Warrenville, IL 60555, Attention: Vice President and Treasurer with a copy to Kirkland & Ellis LLP, 300 North LaSalle Street, Chicago, IL 60654, Attention: Dennis Myers. Any notice, direction, request or demand hereunder to or upon the Trustee or the Agent shall be deemed to have been sufficiently given or made, for all purposes, if given or served by a facsimile transmission or by being deposited postage prepaid by registered or certified mail in a post office letter box addressed to its Corporate Trust Office. Any notice, direction, request or demand hereunder to or upon the Note Registrar, Paying Agent, Transfer Agent, Authenticating Agent or Conversion Agent shall be deemed to have been sufficiently given or made, for all purposes, if given or served by a facsimile transmission or by being deposited postage prepaid by registered or certified mail in a post office letter box addressed to its Corporate Trust Office.
The Trustee and the Agent, by notice to the Company, may designate additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder 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.
Failure to mail a notice or communication to a Noteholder or any defect in it shall not affect its sufficiency with respect to other Noteholders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.
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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 or the Agent (as applicable) shall constitute a sufficient notification for every purpose hereunder.
Notwithstanding any other provision of this Indenture or any Note, whenever notice is required to be given to a holder of a Global Note, such notice shall be sufficiently given if given to the Depositary for such Note (or its designee), pursuant to customary procedures of such Depositary.
SECTION 14.04. Governing Law. THIS INDENTURE AND EACH OF THE NOTES SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 14.05. Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee and Agent. (a) Upon any request or application by the Company to the Trustee or the Agent to take any action under this Indenture, the Company shall furnish to the Trustee and the Agent:
(i) an Officers Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with.
(b) Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:
(i) a statement that each person signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in such certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, the person has made such examination or investigation as is necessary to enable the person to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each such person, such condition or covenant has been complied with; provided , however , that, with respect to matters of fact, an Opinion of Counsel may rely on an Officers Certificate or certificates of public officials.
Notwithstanding anything to the contrary in this Section 14.05 , (i) if any provision in this Indenture specifically provides that the Trustee or Agent shall or may
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receive an Opinion of Counsel in connection with any action to be taken by the Trustee, the Agent, or the Company hereunder, the Trustee or the Agent, as applicable, shall be entitled to, or entitled to request, such Opinion of Counsel.
SECTION 14.06. Payments on Business Days . If any Interest Payment Date or the Stated Maturity of the Notes or any earlier required repurchase date would fall on a day that is not a Business Day, the required payment shall be made on the next succeeding Business Day and no interest on such payment shall accrue in respect of the delay.
SECTION 14.07. No Security Interest Created . Nothing in this Indenture or in the Notes, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.
SECTION 14.08. [Reserved].
SECTION 14.09. Benefits of Indenture . Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the parties hereto, any Paying Agent, any Conversion Agent, any Bid Solicitation Agent, any authenticating agent, any Note Registrar and their successors hereunder or the Holders of the Notes, any benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 14.10. Authenticating Agent . The Agent shall appoint an authenticating agent (together with its successors, assigns and validly appointed replacements, the 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 2.05 , Section 2.06 , Section 2.07 , Section 2.08 , Section 3.04 and Section 7.04 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 Agent and a certificate of authentication executed on behalf of the Agent by an authenticating agent shall be deemed to satisfy any requirement hereunder or in the Notes for the Agents certificate of authentication. Such authenticating agent shall at all times be a Person eligible to serve as trustee hereunder pursuant to Section 11.09 . The Agent initially appoints Citibank, N.A. as Authenticating Agent.
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 all or substantially all 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, 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, the Agent and to the Company. The Agent 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 Agent may appoint a successor authenticating agent, shall give written notice of such appointment to the Company and shall mail notice of such appointment to all Noteholders as the names and addresses of such holders appear on the Note Register.
The Company agrees to pay to the authenticating agent from time to time reasonable compensation for its services although the Company may terminate the authenticating agent, if it determines such agents fees to be unreasonable.
The provisions of Section 11.02, Section 11.03 , Section 11.04 , Section 12.03 and this Section 14.10 shall be applicable to any authenticating agent.
SECTION 14.11. Calculations. Except as otherwise provided in this Indenture, the Company shall be responsible for making all calculations called for under the Notes. These calculations include, but are not limited to, determinations of any Last Reported Sale Price of the Common Stock, the Daily VWAP, accrued interest payable on the Notes and the Conversion Rate. The Company shall make all these calculations in good faith and, absent manifest error, the Companys calculations shall be final and binding on Holders of Notes. The Company shall provide a schedule of its calculations to each of the Trustee, the Agent and the Conversion Agent (if different than the Trustee), and each of the Trustee, the Agent and Conversion Agent (if different than the Trustee) is entitled to rely conclusively upon the accuracy of the Companys calculations without independent verification. The Trustee or the Paying Agent will forward the Companys calculations to any Holder of Notes upon the request of that Holder at the sole cost and expense of the Company.
SECTION 14.12. Rules by Trustee, Paying Agent and Note Registrar . The Trustee may make reasonable rules for action by, or a meeting of, Holders. The Note Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 14.13. 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 14.14. 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.
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SECTION 14.15. 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 14.16. No Recourse Against Others . No director, officer, employee, stockholder, incorporator or agent of the Company will have any liability for any obligations of the Company under the Notes, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability.
SECTION 14.17. Waiver of Jury Trial . EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.
SECTION 14.18. Force Majeure. In no event shall the Trustee or the Agent be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee and the Agent shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
ARTICLE 15
REDEMPTION
SECTION 15.01. Right to Redeem. The Notes shall not be redeemable before October 15, 2016, and no sinking fund is provided for the Notes. On or after such date, the Company shall be entitled to redeem the Notes at its option, in whole or in part, provided that the last reported sale price of the Companys common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending within 10 trading days immediately prior to the date of the Redemption Notice exceeds 130% of the applicable Conversion Price for the Notes on each applicable trading day. The redemption price for the Notes to be redeemed on any Redemption Date (the Redemption Price ) will equal (a) 100% of the principal amount of the Notes being redeemed plus (b) accrued and unpaid interest (including additional interest), if any, to, but excluding, the Redemption Date, unless the Redemption Date falls after a record date but on or prior to the immediately succeeding interest payment date, in which case the Company shall instead pay the full amount of accrued and unpaid interest, including any additional interest, to the Holder of record as of the close of business on such record date. If Notes are redeemed on a date that is after a Regular Record Date for
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the payment of interest and on or prior to the corresponding Interest Payment Date, accrued and unpaid interest will not be paid to the Holder of Notes being redeemed, and instead the full amount of the relevant interest payment will be paid on such interest payment date to the Holder of record on such Regular Record Date.
SECTION 15.02. Notices to Paying Agent . If the Company elects to redeem Notes pursuant to the optional redemption provisions of the Notes, it shall notify the Paying Agent in writing of the Redemption Date, the principal amount of Notes to be redeemed and the paragraph of the Notes pursuant to which the redemption will occur.
The Company shall give each notice to the Paying Agent provided for in this Section at least 30 days before the Redemption Date unless the Paying Agent consents to a shorter period; provided , however , that if the Company mails a Redemption Notice to Holders more than 30 days prior to the Redemption Date, in accordance with Section 15.05 hereto, the Company shall immediately give notice to the Paying Agent. Such notice shall be accompanied by an Officers Certificate and an Opinion of Counsel from the Company to the effect that such redemption will comply with the conditions herein.
SECTION 15.03. Selection of Notes to Be Redeemed . In the event that the Company chooses to redeem less than all of the Notes at any time, selection of the Notes for redemption shall be made by the Paying Agent by lot or by such method as the Paying Agent shall deem fair and appropriate in accordance with DTC procedures. The Paying Agent shall make the selection from outstanding Notes not previously called for redemption. Notes and portions of them the Paying Agent selects shall be in principal amounts of $1,000 or multiples of $1,000. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. The Paying Agent shall notify the Company promptly of the Notes or portions of Notes to be redeemed.
SECTION 15.04. Notice of Redemption . At least 30 days but not more than 60 days before a date for redemption of Notes, the Company shall mail a notice of redemption (a Redemption Notice ) by first-class mail to each Holder of Notes to be redeemed at such Holders registered address, except that Redemption Notices may be mailed more than 60 days prior to the Redemption Date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture. Any inadvertent defect in the Redemption Notice, including an inadvertent failure to give notice, to any Holder selected for redemption shall not impair or affect the validity of the redemption of any other Note redeemed in accordance with provisions of this Indenture. Simultaneously with providing such Redemption Notice, the Company shall issue a press release or publish a notice containing the information included therein or shall publish such information on the Companys website or through such other public medium as the Company may use at such time.
The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
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(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price;
(v) if fewer than all the outstanding Notes are to be redeemed, the identification and principal amounts of the particular Notes to be redeemed;
(vi) that, unless the Company defaults in making such redemption payment, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the Redemption Date;
(vii) the CUSIP number, ISIN or Common Code number, if any, printed on the Notes being redeemed;
(viii) that no representation is made as to the correctness or accuracy of the CUSIP number, ISIN, or Common Code number, if any, listed in such notice or printed on the Notes;
(ix) that such Holder has a right to convert the Notes called for redemption upon satisfaction of the requirements therefor set in the Indenture, and the conversion rate applicable to such conversion; and
(x) the time at which such Holders right to convert the Notes called for redemption will expire, which will be the close of business on the Business Day immediately preceding the Redemption Date.
At the Companys request, the Paying Agent shall give the Redemption Notice in the Companys name and at the Companys expense. In such event, the Company shall provide the Paying Agent with the information required by this Section.
SECTION 15.05. Effect of Redemption Notice . Once a Redemption Notice is mailed, Notes called for redemption become due and payable on the Redemption Date and at the Redemption Price stated in the Redemption Notice. Upon surrender to the Paying Agent, such Notes shall be paid at the Redemption Price stated in the Redemption Notice, plus accrued interest to the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date), and such Notes shall be canceled by the Paying Agent. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.
SECTION 15.06. Deposit of Redemption Price . Prior to the Redemption Date, the Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the Redemption Price of and accrued interest on all Notes to be redeemed on that date other than Notes or portions of Notes called for redemption which have been delivered by the Company to the Paying Agent for cancellation.
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SECTION 15.07. Notes Redeemed in Part . Upon surrender of a Note that is redeemed in part, the Company shall execute and the Authenticating Agent shall authenticate for the Holder (at the Companys expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered.
SECTION 15.08. Effect of Redemptions in Part . In the event of any redemption in part, the Company shall not be required to (i) issue, register the transfer of or exchange any notes during a period beginning at the open of business 15 days before the mailing of a Redemption Notice and ending at the close of business on the earliest date on which the relevant Redemption Notice is deemed to have been given to all Holders of Notes to be redeemed or (ii) register the transfer of or exchange any Notes so selected for redemption, in whole or in part, except the unredeemed portion of any Notes being redeemed in part.
SECTION 15.09. Conditions to Redemption . No Notes may be redeemed if the principal amount of the Notes has been accelerated, 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 us in the payment of the applicable Redemption Price with respect to such Notes).
[ Remainder of the page intentionally left blank ]
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.
NAVISTAR INTERNATIONAL CORPORATION | ||
By: |
/s/ Walter G. Borst |
|
Name: | Walter G. Borst | |
Title: | Executive Vice President and Chief Financial Officer |
[ Navistar Indenture Signature Page ]
WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee | ||
By: |
/s/ Michael G. Oller, Jr. |
|
Name: | Michael G. Oller, Jr. | |
Title: | Assistant Vice President |
[ Navistar Indenture Signature Page ]
CITIBANK, N.A., | ||
as Note Registrar, Paying Agent, Transfer Agent, Authenticating Agent and Conversion Agent | ||
By: |
/s/ Jacqueline Suarez |
|
Name: | Jacqueline Suarez | |
Title: | Vice President |
[ Navistar Indenture Signature Page ]
SCHEDULE A
The following table sets forth the amount, if any, by which the Conversion Rate per $1,000 principal amount of Notes will increase pursuant to Section 4.06 of this Indenture for each Stock Price and Effective Date set forth below:
Effective Date |
$36.50 | $40.00 | $45.00 | $50.00 | $60.00 | $75.00 | $100.00 | $125.00 | $150.00 | $200.00 | $250.00 | |||||||||||
October 15, 2013 |
10.2739 | 8.9618 | 7.3858 | 6.1968 | 4.5531 | 3.1062 | 1.8896 | 1.2819 | 0.9294 | 0.5475 | 0.3495 | |||||||||||
October 15, 2014 |
10.2739 | 8.8968 | 7.2270 | 5.9788 | 4.2795 | 2.8248 | 1.6544 | 1.0982 | 0.7872 | 0.4599 | 0.2929 | |||||||||||
October 15, 2015 |
10.2739 | 8.7271 | 6.9461 | 5.6301 | 3.8747 | 2.4311 | 1.3440 | 0.8663 | 0.6136 | 0.3578 | 0.2288 | |||||||||||
October 15, 2016 |
10.2739 | 8.3977 | 6.4745 | 5.0753 | 3.2657 | 1.8729 | 0.9401 | 0.5843 | 0.4123 | 0.2451 | 0.1593 | |||||||||||
October 15, 2017 |
10.2739 | 7.9301 | 5.7633 | 4.2186 | 2.3304 | 1.0750 | 0.4453 | 0.2747 | 0.2020 | 0.1272 | 0.0846 | |||||||||||
October 15, 2018 |
10.2739 | 7.8767 | 5.0989 | 2.8767 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |
EXHIBIT A
[FORM OF FACE OF GLOBAL NOTE]
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS NOTE IS EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE 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) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS NOTE 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 NOTE 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 HEREON 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.
THIS NOTE AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS NOTE 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 PRIOR TO THE RESALE RESTRICTION TERMINATION DATE 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 (D) ABOVE, THE COMPANY, THE TRUSTEE, AND THE PAYING AGENT RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL
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OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THE RESALE RESTRICTION TERMINATION DATE MEANS THE LATER OF: (A) THE DATE THAT IS ONE YEAR AFTER THE LAST ORIGINAL ISSUANCE DATE OF THE NOTES OR SUCH SHORTER PERIOD OF TIME PERMITTED BY RULE 144 OR ANY SUCCESSOR PROVISION THERETO; AND (B) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW.
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NAVISTAR INTERNATIONAL CORPORATION
4.50% Senior Subordinated Convertible Note due 2018
No. [ ] | Initially $[ ] |
CUSIP No. 63934E AP3
Navistar International Corporation, a Delaware corporation (herein called the Company , which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay CEDE & CO., or registered assigns, [ ] DOLLARS ($[ ]) (or such greater or lesser principal amount as shall be specified in the Schedule of Exchanges of Securities attached hereto) on October 15, 2018 unless earlier converted or repurchased, and to pay interest thereon as set forth in the manner, at the rates and to the Persons set forth in the Indenture.
This Note shall bear interest at a rate of 4.50% per annum from October 11, 2013 or from the most recent date to which interest had been paid or provided to, but excluding, the next scheduled Interest Payment Date, until the principal hereof shall be repaid. Interest on this Note will be computed on the basis of a 360-day year composed of twelve 30-day months. Interest is payable semi-annually in arrears on each April 15 and October 15, commencing on April 15, 2014, to the Person in whose name this Note (or one or more predecessor securities) is registered at the close of business on the Regular Record Date for such interest. Additional Interest will be payable at the option of the Company on the terms set forth in Section 5.02 of the within-mentioned Indenture.
The Company will pay interest on overdue principal, and, to the extent lawful, on overdue interest, in each case at a rate of 4.50% per annum. Interest not paid when due and any interest on principal or interest not paid when due will be paid to Holders on a special record date, which will be the 15th day preceding the date fixed by the Company for the payment of such interest, whether or not such day is a Business Day. At least 15 days before a special record date, the Company will send to each Holder and to the Paying Agent a notice that sets forth the special record date, the payment date and the amount of interest to be paid.
The Company shall pay principal of and interest on this Note, so long as such Note is a Global Note, in immediately available funds to the Depositary or its nominee, as the case may be, as the registered Holder of such Note. The Company shall pay 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 Citibank, N.A. as its Paying Agent and Note Registrar in respect of the Notes and its agency in New York, New York as a place where Notes may be presented for payment or for registration of transfer. The Company may, however, change the Paying Agent or Note Registrar for the Notes without prior notice to the Holders thereof, and the Company may act as Paying Agent or Note Registrar. Interest on the Notes (other than
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Notes that are Global Notes) will be payable by wire transfer in immediately available funds to that Holders account within the United States, which application shall remain in effect until that Holder notifies, in writing, the Note Registrar to the contrary.
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
In the case of any conflict between this Note and the Indenture, the provisions of the Indenture shall control. This Note, for all purposes, shall be governed by and construed in accordance with the laws of the State of New York.
Unless the certificate of authentication hereon has been executed by the Authenticating Agent referred to on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
[ Remainder of page intentionally left blank ]
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IN WITNESS WHEREOF, NAVISTAR INTERNATIONAL CORPORATION has caused this instrument to be signed manually or by facsimile by its duly authorized officer.
Dated: October 11, 2013
NAVISTAR INTERNATIONAL CORPORATION | ||
By: |
|
|
Name: | ||
Title: |
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CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
Dated: October 11, 2013
CITIBANK, N.A., as Authenticating Agent | ||
By: |
|
|
Name: | ||
Authorized Signatory |
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[FORM OF REVERSE OF GLOBAL NOTE]
NAVISTAR INTERNATIONAL CORPORATION
4.50% Senior Subordinated Convertible Note due 2018
This Note is one of a duly authorized issue of Securities of the Company (herein called the Notes ), issued under and pursuant to an Indenture dated as of October 11, 2013 (herein called the Original Indenture ) by and among the Company, Wilmington Trust, National Association, herein called the Trustee and Citibank, N.A., as Note Registrar, Paying Agent, Transfer Agent, Authenticating Agent and Conversion Agent (the Agent), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the Note Registrar, the Paying Agent, the Transfer Agent, the Authenticating Agent, the Conversion Agent and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. Additional Notes may be issued in an unlimited aggregate principal amount, subject to certain conditions specified in the Indenture.
This Note is not subject to redemption at the option of the Company prior to October 15, 2016.
As provided in and subject to the provisions of the Indenture, upon the occurrence of a Fundamental Change, the Holder has the right, at such Holders option, to require the Company to repurchase all of such Holders Notes or any portion thereof (in principal amounts of $1,000 or integral multiples thereof) on the Fundamental Change Purchase Date at a price equal to the Fundamental Change Purchase Price.
Except as described below, the Notes shall not be redeemable before October 15, 2016, and no sinking fund is provided for the Notes. On or after such date, the Company shall be entitled to redeem the Notes at its option, in whole or in part, provided that the last reported sale price of the Companys common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending within 10 trading days immediately prior to the date of the Redemption Notice exceeds 130% of the applicable conversion price for the notes on each applicable trading day. The Redemption Price for the Notes to be redeemed on any Redemption Date will equal (a) 100% of the principal amount of the Notes being redeemed plus (b) accrued and unpaid interest (including additional interest), if any, to, but excluding, the Redemption Date, unless the Redemption Date falls after a record date but on or prior to the immediately succeeding interest payment date, in which case we will instead pay the full amount of accrued and unpaid interest, including any additional interest, to the Holder of record as of the close of business on such record date. If Notes are redeemed on a date that is after a Regular Record Date for the payment of interest and on or prior to the corresponding Interest Payment Date, accrued and unpaid interest will not be paid to the Holder of Notes being redeemed, and instead the full amount of the relevant interest payment will be paid on such interest payment date to the Holder of record on such Regular Record Date.
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Notice will be given not less than 30 nor more than 60 days prior to the Redemption Date, and such notice will state, among other things: (a) that such Holder has a right to convert the Notes called for redemption upon satisfaction of the requirements therefor set forth in the Indenture, and the conversion rate applicable to such conversion; and (b) the time at which such Holders right to convert the Notes called for redemption will expire, which will be the close of business on the Business Day immediately preceding the Redemption Date. Any inadvertent defect in the Redemption Notice, including an inadvertent failure to give notice, to any Holder selected for redemption will not impair or affect the validity of the redemption of any other Note redeemed in accordance with provisions of the Indenture.
As provided in and 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 October 15, 2018, to convert this Note or a portion thereof that is $1,000 or an integral multiple thereof, into cash, shares of Common Stock or a combination thereof, at the Companys discretion, at the applicable Conversion Rate specified in the Indenture, as adjusted from time to time as provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the Company will make all payments and deliveries in respect of the Fundamental Change Purchase Price and the principal amount of the Notes on the Stated Maturity thereof, as the case may be, to the holder who surrenders a Note to the 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 permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes to be effected under the Indenture at any time by the Company, the Agent and the Trustee with the consent of the Holders of a majority in principal amount of the Notes at the time outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes at the time outstanding, on behalf of the Holders of all Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, in case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of and interest on all Notes may be declared due and payable, by either the Trustee or Holders of not less than 25% in aggregate principal amount of Notes then outstanding, and upon said declaration shall become due and payable, in the manner, with
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the effect and subject to the conditions provided in the Indenture; provided that upon the occurrence of an Event of Default specified in clauses (i) and (j) of Section 5.01 of the Indenture, the principal amount of, and interest on, all the Notes shall automatically become due and payable.
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 the principal of and any premium and interest on this Note at the time, place and rate, and in the coin and currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Note Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Note Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Agent, the Trustee and any agent of the Company or Trustee may treat the Person in whose name the Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Agent, the Trustee nor any such agent shall be affected by notice to the contrary.
All defined terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture.
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ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM - as tenants in common |
UNIF GIFT MIN ACT |
Custodian | ||
(Cust) | ||||
TEN ENT - as tenants by the entireties |
|
|||
(Minor) | ||||
JT TEN - as joint tenants with right of Survivorship and not as tenants in common | Uniform Gifts to Minors Act | (State) |
Additional abbreviations may also be used though not in the above list.
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SCHEDULE A
SCHEDULE OF EXCHANGES OF SECURITIES
NAVISTAR INTERNATIONAL CORPORATION
4.50% Senior Subordinated Convertible Notes due 2018
The initial principal amount of this Global Note is [ ] DOLLARS ($[ ]). The following, exchanges, purchases or conversions of a part of 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 |
EXHIBIT B
[FORM OF NOTICE OF CONVERSION]
To: Navistar International Corporation
The undersigned owner of this Note hereby irrevocably exercises the option to convert this Note, or a portion hereof (which is $1,000 or an integral multiple hereof) below designated, into cash, shares of Common Stock or a combination thereof, at the Companys discretion, in accordance with the terms of the Indenture referred to in this Note, and directs that any cash payable and any shares of Common Stock issuable and deliverable upon conversion, together with any check in payment for fractional shares of Common Stock, and any Notes representing any unconverted principal amount hereof, be paid or issued and delivered, as the case may be, to the registered Holder hereof unless a different name has been indicated below. Subject to certain exceptions set forth in the Indenture, if this notice is being delivered on a date after the close of business on a Regular Record Date and prior to the open of business on the related Interest Payment Date, this notice is accompanied by payment of an amount equal to the interest payable on such Interest Payment Date of the principal of this Note to be converted. If any shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect hereto. Any amount required to be paid by the undersigned on account of interest accompanies this Note.
Principal amount to be converted (in an integral multiple of $1,000, if less than all):
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Signature(s) |
Signature(s) must be guaranteed by an institution which is a member of one of the following recognized signature Guarantee Programs: |
(i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP) or (iv) another guarantee program acceptable to the Agent. |
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Signature Guarantee |
B-1
Fill in for registration of any shares of Common Stock and Notes if to be issued otherwise than to the registered Holder.
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(Name) |
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(Address) |
Please print Name and Address |
(including zip code number) |
Social Security or other Taxpayer |
Identifying Number |
B-2
EXHIBIT C
[FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE]
To: Navistar International Corporation
The undersigned registered owner of this Note hereby acknowledges receipt of a notice from Navistar International Corporation (the Company ) as to the occurrence of a Fundamental Change with respect to the Company and specifying the Fundamental Change Purchase Date and requests and instructs the Company to repay to the registered holder hereof in accordance with the applicable provisions of this Note and the Indenture referred to in this Note (1) the entire principal amount of this Note, or the portion thereof (that is $1,000 principal amount or an integral multiple thereof) below designated, and (2) if such Fundamental Change Purchase 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 thereon to, but excluding, such Fundamental Change Purchase Date.
In the case of certificated Notes, the certificate numbers of the Notes to be repurchased are as set forth below:
Dated:
Signature(s) |
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Social Security or Other Taxpayer Identification Number
principal amount to be repaid (if less than all): |
$ , 000 |
NOTICE: The signature on the Fundamental Change Purchase Notice 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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EXHIBIT D
[FORM OF ASSIGNMENT AND TRANSFER]
For value received hereby sell(s), assign(s) and transfer(s) unto (Please insert social security or Taxpayer Identification Number of assignee) the within Note, and hereby irrevocably constitutes and appoints to transfer the said Note on the books of the Company, with full power of substitution in the premises.
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Signature(s) |
Signature(s) must be guaranteed by an institution which is a member of one of the following recognized signature |
Guarantee Programs: |
(i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP) or (iv) another guarantee program acceptable to the Agent. |
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Signature Guarantee |
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EXHIBIT E
[FORM OF FREE TRANSFERABILITY CERTIFICATE]
To: Wilmington Trust, National Association
Dear Sir or Madam:
Whereas the 4.50% Senior Subordinated Convertible Notes due 2018 (the Notes ) have become freely tradable without restriction by non-affiliates of Navistar International Corporation (the Company ) pursuant to Rule 144(b)(1) under the Securities Act of 1933, as amended, in accordance with Section 2.04(a) of the indenture, dated as of October 11, 2013 (the Indenture ), among the Company, Wilmington Trust, National Association, as trustee, and Citibank, N.A., as Note Registrar, Paying Agent, Transfer Agent, Authenticating Agent and Conversion Agent, pursuant to which the Notes were issued, the Company hereby instructs you that:
(i) | the restrictive legends described in Section 2.04(a) of the Indenture and set forth on the Notes and Common Stock issued or issuable upon conversion of the Notes will be deemed removed from the global securities representing such securities, in accordance with the terms and conditions of the Notes and as provided in the Indenture, without further action on the part of holders; and |
(ii) | the restricted CUSIP number for the Notes will be deemed removed from the Global Notes and replaced with the unrestricted CUSIP number 63934E AQ1, in accordance with the terms and conditions of the Notes and as provided in the Indenture, without further action on the part of holders. |
Capitalized terms used but not defined herein have the meanings set forth in the Indenture.
Very truly yours, | ||
NAVISTAR INTERNATIONAL CORPORATION | ||
By: |
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Name: | ||
Title: |
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Exhibit 10.1
EXECUTION VERSION
$200,000,000
NAVISTAR INTERNATIONAL CORPORATION
4.5% Senior Subordinated Convertible Notes due 2018
Purchase Agreement
October 7, 2013
J.P. Morgan Securities LLC
As Representative of the
several Initial Purchasers listed
in Schedule 1 hereto
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Ladies and Gentlemen:
Navistar International Corporation, a Delaware corporation (the Company ), proposes to issue and sell to the several initial purchasers listed in Schedule 1 hereto (the Initial Purchasers ), for whom you are acting as representative (the Representative ), $200,000,000 aggregate principal amount (the Firm Securities ) of its 4.5% Senior Subordinated Convertible Notes due 2018 (the Notes ) and, at the option of the Initial Purchasers, up to an additional $30,000,000 aggregate principal amount (the Option Securities ) of Notes as set forth in Section 2 below. The Firm Securities and the Option Securities are herein referred to as the Securities . Upon the satisfaction of certain conditions, the Securities are convertible, at the option of the holders, at a conversion rate (the Conversion Rate ) set forth and as described in the Time of Sale Information (as defined below) and the Offering Memorandum (as defined below), and upon any such conversion the Company may elect to satisfy its conversion obligation through the delivery of shares of common stock, par value $0.10 per share, of the Company ( Common Stock ), cash or a combination of cash and shares of Common Stock. The Securities will be issued pursuant to an indenture to be dated as of October 11, 2013 (the Indenture ) between the Company and Wilmington Trust, National Association, as trustee (the Trustee ).
The Securities will be sold to the Initial Purchasers without being registered under the Securities Act of 1933, as amended (the Securities Act ), in reliance upon an exemption therefrom. The Company has prepared a preliminary offering memorandum dated October 7, 2013 (the Preliminary Offering Memorandum ) and will prepare an offering memorandum dated the date hereof (the Offering Memorandum ) setting forth information concerning the Company and the Securities. Copies of the Preliminary Offering Memorandum have been, and copies of the Offering Memorandum will be, delivered by the Company to the Initial Purchasers pursuant to the terms of this purchase agreement (the Agreement ). The Company hereby confirms that it has authorized the
use of the Preliminary Offering Memorandum, the other Time of Sale Information (as defined below) and the Offering Memorandum in connection with the offering and resale of the Securities by the Initial Purchasers in the manner contemplated by this Agreement. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Preliminary Offering Memorandum. References herein to the Preliminary Offering Memorandum, the Time of Sale Information and the Offering Memorandum shall be deemed to refer to and include any document incorporated by reference therein and any reference to amend, amendment or supplement with respect to the Preliminary Offering Memorandum or the Offering Memorandum shall be deemed to refer to and include any documents filed after such date and incorporated by reference therein. References herein to the Preliminary Offering Memorandum, the Time of Sale Information and the Offering Memorandum also shall be deemed to refer to and include the preliminary Canadian offering memorandum dated October 7, 2013 (the Preliminary Canadian Offering Memorandum ) and the Canadian offering memorandum dated the date hereof (the Final Canadian Offering Memorandum ), respectively.
At or prior to the time when sales of the Securities were first made (the Time of Sale ), the Company had prepared the following information (collectively, the Time of Sale Information ): the Preliminary Offering Memorandum, as supplemented and amended by the written communications listed on Annex A hereto.
The Company intends to use the net proceeds of the offering of the Securities for general corporate purposes, which may include funding capital expenditures and repurchasing a portion of its 3.0% Senior Subordinated Convertible Notes due October 2014.
The Company hereby confirms its agreement with the several Initial Purchasers concerning the purchase and resale of the Securities, as follows:
1. Purchase and Resale of the Securities .
(a) The Company agrees to issue and sell the Firm Securities to the several Initial Purchasers as provided in this Agreement, and each Initial Purchaser, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Company the respective principal amount of Firm Securities set forth opposite such Initial Purchasers name in Schedule 1 hereto at a price equal to 98.0% of the principal amount thereof (the Purchase Price ) plus accrued interest, if any, from October 11, 2013 to the Closing Date (as defined below). The Company will not be obligated to deliver any of the Securities except upon payment for all the Securities to be purchased as provided herein.
In addition, the Company agrees to issue and sell the Option Securities to the several Initial Purchasers as provided in this Agreement, and the Initial Purchasers, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, shall have the option to purchase, severally and not jointly, from the Company the Option Securities at the Purchase Price plus accrued interest, if any, from the Closing Date to the date of payment and delivery.
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If any Option Securities are to be purchased, the amount of Option Securities to be purchased by each Initial Purchaser shall be the amount of Option Securities that bears the same ratio to the aggregate amount of Option Securities being purchased as the amount of Firm Securities set forth opposite the name of such Initial Purchaser in Schedule 1 hereto (or such amount increased as set forth in Section 10 hereof) bears to the aggregate amount of Firm Securities being purchased from the Company by the several Initial Purchasers, subject, however, to such adjustments to securities in denominations other than $1,000 as the Representative in its sole discretion shall make.
The Initial Purchasers may exercise the option to purchase Option Securities at any time in whole, or from time to time in part, on or before the thirtieth day following the date of the Offering Memorandum, by written notice from the Representative to the Company. Such notice shall set forth the aggregate amount of Option Securities as to which the option is being exercised and the date and time when the Option Securities are to be delivered and paid for, which may be the same date and time as the Closing Date (as hereinafter defined) but shall not be earlier than the Closing Date or later than the tenth full business day (as hereinafter defined) after the date of such notice (unless such time and date are postponed in accordance with the provisions of Section 10 hereof). Any such notice shall be given at least two business days prior to the date and time of delivery specified therein; provided , however , that in the event that such date and time of delivery is to be the Closing Date, the requirement in this sentence shall be waived.
(b) The Company understands that the Initial Purchasers intend to offer the Securities for resale on the terms set forth in the Time of Sale Information. Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that:
(i) it is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act (a QIB ) and an accredited investor within the meaning of Rule 501(a) of Regulation D under the Securities Act ( Regulation D );
(ii) it has not solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act; and
(iii) it has not solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities as part of their initial offering except within the United States to persons whom it reasonably believes to be QIBs in transactions pursuant to Rule 144A under the Securities Act ( Rule 144A ) and in connection with each such sale, it has taken or will take reasonable steps to ensure that the purchaser of the Securities is aware that such sale is being made in reliance on Rule 144A.
(c) Each Initial Purchaser acknowledges and agrees that the Company and, for purposes of the no registration opinions to be delivered to the Initial Purchasers pursuant to Sections 6(f) and 6(h), counsel for the Company and counsel for the Initial
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Purchasers, respectively, may rely upon the accuracy of the representations and warranties of the Initial Purchasers, and compliance by the Initial Purchasers with their agreements, contained in paragraph (b) above, and each Initial Purchaser hereby consents to such reliance.
(d) The Company acknowledges and agrees that the Initial Purchasers may offer and sell Securities to or through any affiliate of an Initial Purchaser and that any such affiliate may offer and sell Securities purchased by it to or through any Initial Purchaser.
(e) The Company acknowledges and agrees that each Initial Purchaser is acting solely in the capacity of an arms length contractual counterparty to the Company with respect to the offering of Securities contemplated hereby (including in connection with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person. Additionally, neither the Representative nor any other Initial Purchaser is advising the Company or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Company shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and neither the Representative nor any other Initial Purchaser shall have any responsibility or liability to the Company with respect thereto. Any review by the Representative or any Initial Purchaser of the Company and the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Representative or such Initial Purchaser, as the case may be, and shall not be on behalf of the Company or any other person.
2. Payment and Delivery .
(a) Payment for and delivery of the Securities shall be made at the offices of Cravath, Swaine & Moore LLP at 10:00 A.M., New York City time, on October 11, 2013, or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representative and the Company may agree upon in writing or, in the case of the Option Securities, on the date and at the time and place specified by the Representative in the written notice of the Initial Purchasers election to purchase such Option Securities. The time and date of such payment and delivery for the Firm Securities is referred to herein as the Closing Date , and the time and date for such payment for the Option Securities, if other than the Closing Date, is herein referred to as the Additional Closing Date .
(b) Payment for the Securities to be purchased on the Closing Date or the Additional Closing Date, as the case may be, shall be made by wire transfer in immediately available funds to the account specified by the Company to the Representative against delivery to the nominee of The Depository Trust Company ( DTC ), for the respective accounts of the several Initial Purchasers of the Securities to be purchased on such Closing Date or Additional Closing Date, as the case may be, of one or more global notes representing the Securities (collectively, the Global Note ), with any transfer taxes payable in connection with the sale of such Securities duly paid by the Company. A copy of the Global Note will be made available for inspection by the
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Representative at the office of Cravath, Swaine & Moore LLP not later than 1:00 P.M., New York City time, on the business day prior to the Closing Date or the Additional Closing Date, as the case may be.
3. Representations and Warranties of the Company . The Company represents and warrants to each Initial Purchaser that:
(a) Preliminary Offering Memorandum, Time of Sale Information and Offering Memorandum. The Preliminary Offering Memorandum, as of its date, did not, the Time of Sale Information, at the Time of Sale, did not, and at the Closing Date, will not, and the Offering Memorandum, in the form first used by the Initial Purchasers to confirm sales of the Securities and as of the Closing Date, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the Representative expressly for use in the Preliminary Offering Memorandum, the Time of Sale Information or the Offering Memorandum, it being understood and agreed that the only such information furnished by any Initial Purchaser consists of the information described as such in Section 7(b) hereof.
(b) Additional Written Communications . The Company (including its agents and representatives, other than the Initial Purchasers in their capacity as such) has not prepared, made, used, authorized, approved or referred to and will not prepare, make, use, authorize, approve or refer to any written communication that constitutes an offer to sell or solicitation of an offer to buy the Securities (each such communication by the Company or its agents and representatives (other than a communication referred to in clauses (i) and (ii) below) an Issuer Written Communication ) other than (i) the Preliminary Offering Memorandum, (ii) the Offering Memorandum, (iii) the documents listed on Annex A hereto, including a term sheet substantially in the form of Annex B hereto (the Pricing Supplement ), which constitute part of the Time of Sale Information, and (iv) any electronic road show and any other written communications approved in writing in advance by the Representative, in each case used in accordance with Section 4(c). Each such Issuer Written Communication, when taken together with the Time of Sale Information at the Time of Sale, did not, and at the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation or warranty with respect to any statements or omissions made in each such Issuer Written Communication in reliance upon and in conformity with information relating to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the Representative expressly for use in any Issuer Written Communication, it being understood and agreed that the only such information furnished by any Initial Purchaser consists of the information described as such in Section 7(b) hereof.
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(c) Incorporated Documents. The documents incorporated by reference in each of the Time of Sale Information and the Offering Memorandum, when filed with the Securities and Exchange Commission (the Commission ), complied as to form in all material respects with the requirements of the Exchange Act, and the rules and regulations of the Commission thereunder, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Time of Sale Information or the Offering Memorandum, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(d) Financial Statements. (i) The financial statements and the related notes thereto included or incorporated by reference in each of the Time of Sale Information and the Offering Memorandum comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as applicable, and present fairly the consolidated financial position of the Company, Blue Diamond Parts, LLC ( Blue Diamond ) and their consolidated subsidiaries, as applicable, and the results of their respective operations and the changes in their respective consolidated cash flows, as of the dates and for the periods indicated, and said financial statements have been prepared in conformity with generally accepted accounting principles in the United States ( GAAP ) applied on a consistent basis throughout the periods covered thereby, and any supporting schedules included or incorporated by reference in the Offering Memorandum present fairly the information required to be stated therein; and the other financial information included or incorporated by reference in each of the Time of Sale Information and the Offering Memorandum has been derived from the accounting records of the Company, Blue Diamond and their consolidated subsidiaries, as applicable, and presents fairly the information shown thereby; and (ii) the selected financial data for the fiscal years ended October 31, 2008, and October 31, 2009, incorporated by reference in the Time of Sale Information and the Offering Memorandum, have been derived from the Companys reclassified financial statements on a basis consistent with the reclassified consolidated financial statements included in the Companys Current Report on Form 8-K filed with the Commission on March 25, 2013, and incorporated by reference in the Time of Sale Information and the Offering Memorandum.
(e) No Material Adverse Change. Since the respective dates as of which information is given in each of the Time of Sale Information and the Offering Memorandum (exclusive of any amendment or supplement thereto), except as disclosed therein, there has not been (A) any material change in the issued capital stock, warrants or options except pursuant to the terms of the instruments governing the same or pursuant to the exercise of such options or warrants, or the issuance of certain options of the Company or any of its Subsidiaries (as defined herein), or (B) any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, the management, business, financial position, stockholders equity or results of operations, of the Company and its Subsidiaries, taken as a whole (a
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Material Adverse Change ). Since the respective dates as of which information is given in each of the Time of Sale Information and the Offering Memorandum (exclusive of any amendment or supplement thereto), except as disclosed therein, (i) there have been no transactions entered into by the Company or any of its Subsidiaries, including those entered into in the ordinary course of business, that are material to the Company and its Subsidiaries taken as a whole; and (ii) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock, except for quarterly dividends in accordance with the past practices of the Company.
(f) Organization and Good Standing of the Company and its Subsidiaries. The Company and each Subsidiary has been duly incorporated or organized under the laws of its jurisdiction of incorporation or organization; is validly existing and in good standing under the laws of its jurisdiction of incorporation or organization; is duly qualified to do business and is in good standing in each other jurisdiction in which it owns or leases property or conducts any business so as to require such qualification, except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, have a material adverse effect on the business, properties, management, financial position, stockholders equity, results of operations or prospects of the Company and its Subsidiaries taken as a whole or on the performance by the Company of its obligations under the Transaction Documents (as defined below) (a Material Adverse Effect ).
(g) Capitalization. The Company has an authorized capitalization as set forth in each of the Time of Sale Information and the Offering Memorandum under the heading Capitalization; all the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and are not subject to any pre-emptive or similar rights; and except as described in or expressly contemplated by the Time of Sale Information and the Offering Memorandum (including all outstanding equity awards granted under the Companys employee benefit plans), there are no outstanding rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company or any of its Subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of the Company or any such Subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options; the capital stock of the Company conforms in all material respects to the description thereof contained in the Time of Sale Information and the Offering Memorandum; and except as described in the Time of Sale Information and the Offering Memorandum, the Company owns, directly or indirectly, free and clear of any mortgage, pledge, security interest, lien, claim or other encumbrance or restriction on transferability or voting (other than as may be imposed by the Securities Act and the various state securities laws or under the Companys Term Loan Facility), all of the outstanding capital stock of each of its Significant Subsidiaries. All of the outstanding capital stock of each Subsidiary of the Company has been duly authorized and validly issued and is fully paid and non-assessable.
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(h) Due Authorization. The Company has the requisite power and authority to execute and deliver this Agreement, the Indenture and the Securities (collectively, the Transaction Documents ) and to perform its obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization, execution and delivery by it of each of the Transaction Documents and the consummation by it of the transactions contemplated hereby and thereby has been duly and validly taken.
(i) The Indenture . The Indenture has been duly authorized by the Company and on the Closing Date and on the Additional Closing Date, as the case may be, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors rights generally or by equitable principles relating to enforceability (collectively, the Enforceability Exceptions ).
(j) Purchase Agreement. This Agreement has been duly authorized, executed and delivered by the Company.
(k) The Securities . The Securities to be issued and sold by the Company hereunder have been duly authorized for issuance and, when duly executed, authenticated, issued and delivered as provided in the Indenture and paid for by the Initial Purchasers in accordance with the terms hereof, will be duly and validly issued and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.
(l) Underlying Securities. Upon the issuance and delivery of the Securities in accordance with this Agreement and the Indenture, upon the satisfaction of certain conditions, the Securities are convertible, at the option of the holders, at the Conversion Rate; upon any such conversion, the Company may elect to satisfy its conversion obligation through the delivery of shares of Common Stock, cash or a combination of cash and shares of Common Stock (all such shares of Common Stock issuable upon conversion of the Securities being referred to herein as the Underlying Securities ); the Underlying Securities reserved for issuance upon conversion of the Securities have been duly authorized and, when issued upon conversion of the Securities in accordance with the terms of the Securities, will be validly issued, fully paid and non-assessable, and the issuance of the Underlying Securities will not be subject to any pre-emptive or similar rights.
(m) Descriptions of the Transaction Documents . Each Transaction Document conforms in all material respects to the description thereof contained in each of the Time of Sale Information and the Offering Memorandum.
(n) No Violation or Default. None of the Company or any of its Subsidiaries is (i) in violation of its Certificate of Incorporation, by-laws or similar organizational documents (in the case of the Companys Subsidiaries that are not Significant Subsidiaries only, in any material respect); (ii) in breach or violation of any of the terms or provisions of, or with the giving of notice or lapse of time, or both, would be in default under, any contract, indenture, mortgage, deed of trust, loan agreement, note, lease,
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partnership agreement or other agreement or instrument to which the Company or any Subsidiary is a party or by which any of them may be bound or to which any of their properties or assets may be subject; except, in the case of this clause (ii), for any such breach, violation or default that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(o) No Conflicts . The execution and delivery by the Company and the performance by the Company of all of the provisions of, and its obligations under, the Transaction Documents and the consummation by the Company of the transactions herein and therein contemplated and as set forth in the Time of Sale Information and the Offering Memorandum will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any properties or assets of the Company or of any Subsidiary pursuant to, any indenture, mortgage, deed of trust, loan agreement, note, lease, partnership agreement or other agreement or instrument to which the Company or any such Subsidiary is a party or by which any of them is bound or to which any of their respective properties or assets may be subject; (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of the Company or any of its Subsidiaries; or (iii) result in the violation of any applicable law or statute, rule or regulation (other than the securities or Blue Sky laws of the various states of the United States of America) or any judgment, order or decree of any government, governmental instrumentality, agency, body or court, domestic or foreign, having jurisdiction over the Company or any such Subsidiary or any of their respective properties or assets, except, in the case of clauses (i) and (iii) above, for any such violation, conflict, breach or default that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
(p) No Consents Required . No authorization, approval, consent, order, registration, qualification or license of, or filing with, any court or arbitrator or governmental or regulatory authority is required for the execution, delivery and performance by the Company of each of the Transaction Documents, the issuance and sale of the Securities and the consummation of the transactions contemplated by the Time of Sale Information and the Offering Memorandum, other than such authorizations, approvals, consents, orders and registrations or qualifications as may be required under applicable state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Initial Purchasers, except where the failure to obtain such authorization, approval, consent, order, registration, qualification or license or to make any such filing would not reasonably be expected, individually or in the aggregate, to have a material adverse effect on the consummation of the transactions contemplated by, or the fulfillment of the terms of, this Agreement or the Time of Sale Information and the Offering Memorandum.
(q) Legal Proceedings. Except as described in each of the Time of Sale Information and the Offering Memorandum, there is no action, suit or proceeding before or by any government, governmental instrumentality, agency, body or court, domestic or foreign, now pending or, to the best knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, that could reasonably be expected to have a Material Adverse Effect or that could have a material adverse effect on the
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consummation of the transactions contemplated by, or the fulfillment of the terms of, this Agreement or the Time of Sale Information and the Offering Memorandum; there is no action, suit or proceeding before or by any government, governmental instrumentality, agency, body or court now pending or, to the best knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries that would be required to be described by Item 103 of Regulation S-K under the Securities Act if the issuance of the Notes was being registered under the Securities Act, but is not described in the Time of Sale Information and the Offering Memorandum.
(r) Independent Accountants. KPMG LLP, which has certified certain financial statements of the Company and its Subsidiaries, is an independent registered public accounting firm with respect to the Company and its Subsidiaries within the applicable rules and regulations adopted by the Commission and the Public Company Accounting Oversight Board (United States) (the PCAOB ) and as required by the Securities Act.
(s) Title to Real and Personal Property. The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them, in each case, that is material to the business of the Company and its Subsidiaries and, in each case, free and clear of all liens, encumbrances and defects except (i) as described in the Time of Sale Information and the Offering Memorandum, (ii) to the extent the failure to have such title, or the existence of such liens, encumbrances or defects, would not reasonably be expected to have a Material Adverse Effect and (iii) for such liens and encumbrances granted under the Term Loan Facility and the ABL Facility (as defined in the Preliminary Offering Memorandum).
(t) Title to Intellectual Property. The Company and its Subsidiaries own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know how, patents, copyrights, confidential information and other intellectual property (collectively, intellectual property rights ) necessary to conduct the business now operated by them, or presently employed by them, and have not received any notice of infringement of or conflict with asserted rights of others with respect to any intellectual property rights that would individually or in the aggregate reasonably be expected to have a Material Adverse Effect.
(u) No Undisclosed Relationships. No relationship, direct or indirect, exists between or among the Company or any of its Subsidiaries, on the one hand, and the directors, officers, stockholders, customers, suppliers or other affiliates of the Company or any of its Subsidiaries, on the other, that would be required by the Securities Act to be described in a registration statement on Form S-1 to be filed with the Commission and that is not so described in each of the Time of Sale Information and the Offering Memorandum.
(v) Investment Company Act. The Company is not, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Time of Sale Information and the Offering Memorandum will not be, an investment company or an entity controlled by an investment company as such terms are defined in the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, the Investment Company Act ).
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(w) Taxes. The Company and its Subsidiaries have satisfied all federal, state, local and foreign taxes and filed all tax returns required to be paid or filed through the date hereof; and except as otherwise disclosed in the Time of Sale Information and the Offering Memorandum, there is no material tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its Subsidiaries or any of their respective properties or assets.
(x) Licenses and Permits. Each of the Company and its Subsidiaries has all licenses, franchises, permits, authorizations, approvals and orders and other concessions of and from all governmental or regulatory authorities that are necessary to own or lease its properties and conduct its businesses as described in the Time of Sale Information and the Offering Memorandum, except where the failure to have such licenses, franchises, permits, authorizations, approvals and orders would not, individually or in the aggregate, have a Material Adverse Effect.
(y) No Labor Disputes. No labor dispute with the employees of the Company or any of its Subsidiaries exists or, to the knowledge of the Company, is imminent that could have a Material Adverse Effect.
(z) Compliance With Environmental Laws. Except as described in the Time of Sale Information and the Offering Memorandum, there has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission or other release of any kind of toxic or other wastes or other hazardous substances by, due to or caused by, to the best knowledge of the Company, the Company and each of its Subsidiaries or any other entity (including any predecessor) for whose acts or omissions any of the Company or its Subsidiaries is or could reasonably be expected to be liable, upon any of the property now or previously owned or leased by the Company or its Subsidiaries, or upon any other property, in violation of any statute or any ordinance, rule, regulation, order, judgment, decree or permit or that would, under any statute or any ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability, except for any violation or liability that could not reasonably be expected to have, singularly or in the aggregate with all such violations and liabilities, a Material Adverse Effect; and except as described in the Time of Sale Information and the Offering Memorandum, there has been no disposal, discharge, emission or other release of any kind onto such property or into the environment surrounding such property of any toxic or other wastes or other hazardous substances with respect to which the Company has knowledge, except for any such disposal, discharge, emission or other release of any kind that could not reasonably be expected to have, singularly or in the aggregate with all such discharges and other releases, a Material Adverse Effect.
(aa) Compliance with ERISA. Except as set forth in the Time of Sale Information and the Offering Memorandum or as would not reasonably be expected to have a Material Adverse Effect, (i) each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
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( ERISA ), for which the Company or any member of its Controlled Group (defined as any organization that is (x) a member of a controlled group of corporations or (y) a trade or business that is under common control within the meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the Code )) would have any liability (each, a Plan ) has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations including, without limitation, ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan, excluding transactions effected pursuant to a statutory or administrative exemption; (iii) neither the Company nor any member of the Controlled Group has failed to make any required contribution to any Plan that is subject to Title IV of ERISA when due under Section 412 and 430 of the Code and Sections 303 and 304 of ERISA, the conditions for imposition of a lien under Section 430(k) of the Code and Section 303(k) of ERISA have not been met with respect to any Plan and, except with respect to the Navistar, Inc. Non-Contributory Retirement Plan and the Navistar, Inc. Retirement Plan for Salaried Employees, no determination that a Plan is in at risk status (within the meaning of Section 430(i) of the Code and Section 303(i) of ERISA) has been made; (iv) no reportable event (within the meaning of Section 4043(c) of ERISA or the regulations thereunder for which the reporting requirements have not been waived) has occurred or is reasonably expected to occur (for which the reporting requirements are not reasonably expected to be waived); and (v) neither the Company nor any member of the Controlled Group has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the Pension Benefit Guaranty Corporation, in the ordinary course and without default) in respect of a Plan (including a multiemployer plan, within the meaning of Section 4001(a)(3) of ERISA).
(bb) Disclosure Controls . The Company maintains and will maintain disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported in accordance with the Exchange Act and the rules and regulations thereunder. The Company has carried out and will carry out evaluations, under the supervision and with the participation of the Companys management, of the effectiveness of the design and operation of the Companys disclosure controls and procedures in accordance with Rule 13a-15 of the Exchange Act.
(cc) Accounting Controls. Except as disclosed in the Time of Sale Information and the Offering Memorandum, the Company maintains a system of internal controls, including, without limitation, internal controls over accounting matters and financial reporting, an internal audit function and legal and regulatory compliance controls (collectively, Internal Controls ) that comply with (a) the Sarbanes-Oxley Act of 2002 ( Sarbanes-Oxley ), (b) the Securities Act, (c) the Exchange Act, (d) the auditing principles, rules, standards and practices applicable to auditors of issuers (as defined in Sarbanes-Oxley) promulgated or approved by the PCAOB and (e) as applicable, the rules of the New York Stock Exchange (the Exchange and, such rules, the Exchange Rules ) (clauses (a) through (e), collectively, the Securities Laws ) and are sufficient to provide reasonable assurances that (i) transactions are executed in accordance with managements general or specific authorizations, (ii) transactions are recorded as
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necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with managements general or specific authorization, (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences and (v) interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Time of Sale Information and the Offering Memorandum fairly presents the information called for in all material respects and is prepared in accordance with the Commissions rules and guidelines applicable thereto. The Internal Controls are, and upon consummation of the offering of the Securities will be, overseen by the Audit Committee (the Audit Committee ) of the Board of Directors of the Company (the Board ) in accordance with the Exchange Rules. Except as disclosed in the Time of Sale Information and the Offering Memorandum, the Company has not publicly disclosed or reported to the Audit Committee or the Board, and has no plans or current intentions to publicly disclose or report to the Audit Committee or the Board, any material weakness, material change in Internal Controls or fraud involving management or other employees who have a significant role in Internal Controls (each, an Internal Control Event ), any material violation of, or material failure to comply with, the Securities Laws or any other matter that, if determined adversely, would have a Material Adverse Effect.
(dd) Absence of Accounting Issues . Except as set forth in the Time of Sale Information and the Offering Memorandum, the Audit Committee is not reviewing or investigating, and neither the Companys independent auditors nor its internal auditors have recommended that the Audit Committee review or investigate, (i) adding to, deleting, changing the application of or changing the disclosure of the Company with respect to, any of the material accounting policies of the Company, (ii) any matter that could result in a restatement of the financial statements of the Company for any annual or interim period during the current fiscal year or the three prior fiscal years or (iii) any Internal Control Event.
(ee) eXtensible Business Reporting Language. The interactive data in eXtensible Business Reporting Language included or incorporated by reference in the Time of Sale Information and the Offering Memorandum fairly presents the information called for in all material respects and has been prepared in accordance with the Commissions rules and guidelines applicable thereto.
(ff) Insurance. The Company and its Significant Subsidiaries have insurance covering their respective properties, operations, personnel and businesses, including business interruption insurance, which insurance is in amounts and insures against such losses and risks as are adequate to protect the Company and its Significant Subsidiaries and their respective businesses; and neither the Company nor any of its Significant Subsidiaries has (i) received notice from any insurer or agent of such insurer that capital improvements or other material expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business.
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(gg) Money Laundering, OFAC and FCPA . The Company and its Subsidiaries, and to the Companys actual knowledge, its affiliates and any of their respective officers, directors, supervisors, managers, agents or employees, have not violated, through their participation in the offering will not violate and have instituted and maintain policies and procedures designed to ensure continued compliance with, each of the following laws: (a) anti-bribery laws including, without limitation, any applicable law, rule or regulation of any locality including, without limitation, any law, rule or regulation promulgated to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed December 17, 1997, the U.S. Foreign Corrupt Practices Act of 1977, the Bribery Act 2010 of the United Kingdom or any other law, rule or regulation of similar purpose and scope, (b) anti-money laundering laws including, without limitation, applicable federal, state, international, foreign or other laws, regulations or government guidance regarding anti-money laundering including, without limitation, Title 18 U.S. Code Sections 1956 and 1957, the Patriot Act, the Bank Secrecy Act, and international anti-money laundering principals or procedures promulgated by any intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation the United States representative to the group or organization continues to concur, all as amended, and any Executive Order, directive or regulation pursuant to the authority of any of the foregoing, or any orders or licenses issued thereunder and (c) laws and regulations imposing U.S. economic sanctions measures (collectively, Sanctions ), including, without limitation, the International Emergency Economic Powers Act, the Trading with the Enemy Act, the United Nations Participation Act and the Syria Accountability and Lebanese Sovereignty Act, all as amended, and any Executive Order, directive or regulation pursuant to the authority of any of the foregoing, including the regulations of the United States Treasury Department set forth under 31 CFR, Subtitle B, Chapter V, as amended, or any orders or licenses issued thereunder. The Company will not directly or indirectly use the proceeds of the offering of the Securities, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture, partner or any other person or entity, (y) to fund any activities of or business with any person in any country or territory that, at the time of such funding, is the subject of Sanctions or (z) in any other manner that will result in a violation by any person (including, without limitation, any Initial Purchaser) of Sanctions.
(hh) Solvency. On and immediately after the Closing Date, the Company and its Subsidiaries taken as a whole (after giving effect to the issuance and sale of the Securities and the other transactions related thereto as described in each of the Time of Sale Information and the Offering Memorandum) will be Solvent. As used in this paragraph, Solvent means, with respect to a particular date and entity, that on such date (i) the fair value (and present fair saleable value) of the assets of such entity is not less than the total amount required to pay the probable liability of such entity on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured; (ii) such entity is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business; (iii) assuming consummation of the issuance and sale of the Securities as contemplated by this Agreement, the Time of Sale Information and the Offering Memorandum, such entity does not have, intend to incur or believe that it will incur debts or liabilities beyond its ability to pay such debts and liabilities as they mature;
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(iv) such entity is not engaged in any business or transaction for which its property would constitute unreasonably small capital; and (v) such entity is not a defendant in any civil action that would result in a judgment that such entity is or would become unable to satisfy.
(ii) No Brokers Fees. Except as disclosed in the Time of Sale Information and the Offering Memorandum, there are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any Initial Purchaser for a brokerage commission, finders fee or other like payment in connection with this offering.
(jj) Rule 144A Eligibility. On the Closing Date, the Securities will not be of the same class as securities listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in an automated inter-dealer quotation system; and each of the Preliminary Offering Memorandum and the Offering Memorandum, as of its respective date, contains or will contain all the information that, if requested by a prospective purchaser of the Securities, would be required to be provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the Securities Act.
(kk) No Integration. Neither the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation D) has, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act.
(ll) No General Solicitation or Directed Selling Efforts. None of the Company or any of its affiliates or any other person acting on its or their behalf (other than the Initial Purchasers, as to which no representation is made) has (i) solicited offers for, or offered or sold, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act or (ii) engaged in any directed selling efforts within the meaning of Regulation S under the Securities Act ( Regulation S ), and all such persons have complied with the offering restrictions requirement of Regulation S.
(mm) Securities Law Exemptions. Assuming the accuracy of the representations and warranties of the Initial Purchasers contained in Section 1(b) and their compliance with their agreements set forth therein, it is not necessary, in connection with the issuance and sale of the Securities to the Initial Purchasers and the offer, resale and delivery of the Securities by the Initial Purchasers in the manner contemplated by this Agreement, the Time of Sale Information and the Offering Memorandum, to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act.
(nn) No Stabilization. Except as the Initial Purchasers may stabilize as described in the Offering Memorandum, the Company has not taken, directly or indirectly, any action that is designed to or that has constituted or that would reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
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(oo) Margin Rules . Neither the issuance, sale and delivery of the Securities nor the application of the proceeds thereof by the Company as described in the Time of Sale Information and the Offering Memorandum will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.
(pp) Statistical and Market Data . Any third-party statistical and market-related data included or incorporated by reference in the Time of Sale Information and the Offering Memorandum is based on or derived from sources that the Company believes to be reliable and accurate.
(qq) Sarbanes-Oxley Act . The Company is in compliance in all material respects with the applicable provisions of Sarbanes-Oxley that are effective and the rules and regulations of the Commission that have been adopted and are effective thereunder.
4. Further Agreements of the Company . The Company covenants and agrees with each Initial Purchaser that:
(a) Delivery of Copies. The Company will deliver, without charge, to the Initial Purchasers as many copies of the Preliminary Offering Memorandum, any other Time of Sale Information, any Issuer Written Communication and the Offering Memorandum (including all amendments and supplements thereto) as the Representative may reasonably request.
(b) Offering Memorandum, Amendments or Supplements. Before finalizing the Offering Memorandum or making or distributing any amendment or supplement to any of the Time of Sale Information or the Offering Memorandum or filing with the Commission any document that will be incorporated by reference therein, the Company will furnish to the Representative and counsel for the Initial Purchasers a copy of the proposed Offering Memorandum or such amendment or supplement or document to be incorporated by reference therein for review, and will not distribute any such proposed Offering Memorandum, amendment or supplement or file any such document with the Commission to which the Representative reasonably objects.
(c) Additional Written Communications. Before making, preparing, using, authorizing, approving or referring to any Issuer Written Communication, the Company will furnish to the Representative and counsel for the Initial Purchasers a copy of such written communication for review and will not make, prepare, use, authorize, approve or refer to any such written communication to which the Representative reasonably objects.
(d) Notice to the Representative. The Company will advise the Representative promptly, and confirm such advice in writing, (i) of the issuance by any governmental or regulatory authority of any order preventing or suspending the use of any of the Time of Sale Information, any Issuer Written Communication or the Offering Memorandum or the initiation or threatening of any proceeding for that purpose; (ii) of the occurrence of any event at any time prior to the completion of the initial offering of the Securities as a result of which any of the Time of Sale Information, any Issuer Written Communication or the Offering Memorandum as then amended or supplemented
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would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when such Time of Sale Information, Issuer Written Communication or the Offering Memorandum is delivered to a purchaser, not misleading; and (iii) of the receipt by the Company of any notice with respect to any suspension of the qualification of the Securities for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Company will use its reasonable best efforts to prevent the issuance of any such order preventing or suspending the use of any of the Time of Sale Information, any Issuer Written Communication or the Offering Memorandum or suspending any such qualification of the Securities and, if any such order is issued, will obtain as soon as possible the withdrawal thereof.
(e) Time of Sale Information. If at any time prior to the Closing Date (i) any event shall occur or condition shall exist as a result of which any of the Time of Sale Information as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (ii) it is necessary to amend or supplement the Time of Sale Information to comply with law, the Company will immediately notify the Initial Purchasers thereof and forthwith prepare and, subject to paragraph (c) above, furnish to the Initial Purchasers such amendments or supplements to the Time of Sale Information (or any document to be filed with the Commission and incorporated by reference therein) as may be necessary so that the statements in any of the Time of Sale Information as so amended or supplemented (including such documents to be incorporated by reference therein) will not, in the light of the circumstances under which they were made, be misleading or so that any of the Time of Sale Information will comply with law.
(f) Ongoing Compliance of the Offering Memorandum. If at any time prior to the completion of the initial offering of the Securities (i) any event shall occur or condition shall exist as a result of which the Offering Memorandum as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Offering Memorandum is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Offering Memorandum to comply with law, the Company will promptly notify the Initial Purchasers thereof and forthwith prepare and, subject to paragraph (b) above, furnish to the Initial Purchasers such amendments or supplements to the Offering Memorandum (or any document to be filed with the Commission and incorporated by reference therein) as may be necessary so that the statements in the Offering Memorandum as so amended or supplemented (including such document to be incorporated by reference therein) will not, in the light of the circumstances existing when the Offering Memorandum is delivered to a purchaser, be misleading or so that the Offering Memorandum will comply with law.
(g) Blue Sky Compliance. The Company will qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representative shall reasonably request and will continue such qualifications in effect so long as required for the offering and resale of the Securities; provided that the Company shall not be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in
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any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.
(h) Clear Market. For a period of 90 days after the date of the Offering Memorandum, the Company will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, or file with the Commission a registration statement under the Securities Act relating to, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, or publicly disclose the intention to make any such offer, sale, pledge, disposition or filing or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of Common Stock or any such other securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, in each case without the prior written consent of the Representative, other than (1) the Securities to be sold hereunder; (2) any shares of Common Stock granted or issued upon the exercise of options granted under the Companys equity benefit plans; (3) any shares issued in accordance with the terms of any convertible securities outstanding on the date of this Agreement; and (4) the filing of any registration statement as required under the Registration Rights Agreement, dated as of October 5, 2012, among the Company and other persons and entities signatory thereto (the Registration Rights Agreement ).
(i) Use of Proceeds. The Company will apply the net proceeds from the sale of the Securities as described in each of the Time of Sale Information and the Offering Memorandum under the heading Use of proceeds and, except as disclosed in the Time of Sale Information and the Offering Memorandum, the Company does not intend to use any of the proceeds from the sale of the Securities hereunder to repay any outstanding debt owed to any affiliate of any Initial Purchaser.
(j) Supplying Information. While the Securities remain outstanding and are restricted securities within the meaning of Rule 144(a)(3) under the Securities Act, the Company will, during any period in which the Company is not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, furnish to holders of the Securities and prospective purchasers of the Securities designated by such holders, upon the request of such holders or such prospective purchasers, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(k) DTC. The Company will assist the Initial Purchasers in arranging for the Securities to be eligible for clearance and settlement through DTC.
(l) No Resales by the Company. During the period of one year after the Closing Date, the Company will not, and will not permit any of its affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Securities that have been acquired by any of them, except for Securities purchased by the Company or any of its affiliates and resold in a transaction registered under the Securities Act.
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(m) No Integration. Neither the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation D) will, directly or through any agent, sell, offer for sale, solicit offers to buy or otherwise negotiate in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act.
(n) No General Solicitation or Directed Selling Efforts. None of the Company or any of its affiliates or any other person acting on its or their behalf (other than the Initial Purchasers, as to which no covenant is given) will (i) solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act or (ii) engage in any directed selling efforts within the meaning of Regulation S, and all such persons will comply with the offering restrictions requirement of Regulation S.
(o) No Stabilization. Except as the Initial Purchasers may stabilize as described in the Offering Memorandum, the Company will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, stabilization or manipulation of the price of any securities of the Company to facilitate the sale or resale of the Securities.
(p) Underlying Securities. The Company will reserve and keep available at all times, free of pre-emptive rights, shares of Common Stock for the purpose of enabling the Company to satisfy all obligations to issue the Underlying Securities upon conversion of the Securities (assuming for the purposes of the determination of the applicable number of Underlying Securities that, upon conversion, the conversion obligation is settled solely in shares of Common Stock based upon the Conversion Rate and the maximum number of additional shares issuable pursuant to the make whole fundamental change provisions of the Indenture). The Company will use its best efforts to list the Underlying Securities, subject to notice of issuance, on the Exchange.
5. Certain Agreements of the Initial Purchasers . Each Initial Purchaser hereby represents and agrees that it has not and will not use, authorize use of, refer to, or participate in the planning for use of, any written communication that constitutes an offer to sell or the solicitation of an offer to buy the Securities other than (i) the Preliminary Offering Memorandum and the Offering Memorandum, (ii) any written communication that contains either (a) no issuer information (as defined in Rule 433(h)(2) under the Securities Act) or (b) issuer information that was included (including through incorporation by reference) in the Time of Sale Information or the Offering Memorandum, (iii) any written communication listed on Annex A or prepared pursuant to Section 4(c) above (including any electronic road show), (iv) any written communication prepared by such Initial Purchaser and approved by the Company in advance in writing or (v) any written communication relating to or that contains the terms of the Securities and/or other information that was included (including through incorporation by reference) in the Time of Sale Information or the Offering Memorandum.
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6. Conditions of Initial Purchasers Obligations. The obligation of each Initial Purchaser to purchase Firm Securities on the Closing Date or the Option Securities on the Additional Closing Date, as the case may be, as provided herein is subject to the performance by the Company of its covenants and other obligations hereunder and to the following additional conditions:
(a) Representations and Warranties. The representations and warranties of the Company contained herein shall be true and correct on the date hereof and on and as of the Closing Date or the Additional Closing Date, as the case may be; and the statements of the Company and its officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date or the Additional Closing Date, as the case may be.
(b) No Downgrade. Except as otherwise disclosed in the Time of Sale Information and the Offering Memorandum, subsequent to the earlier of (A) the Time of Sale and (B) the execution and delivery of this Agreement, (i) no downgrading shall have occurred in the rating accorded the Securities or any other debt securities or preferred stock issued or guaranteed by the Company or any of its Subsidiaries by any nationally recognized statistical rating organization, as such term is defined in Section 3(a)(62) of the Exchange Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of the Securities or of any other debt securities or preferred stock issued or guaranteed by the Company or any of its Subsidiaries (other than an announcement with positive implications of a possible upgrading).
(c) No Material Adverse Change. No event or condition of a type described in Section 3(e) hereof shall have occurred or shall exist, which event or condition is not described in each of the Time of Sale Information (excluding any amendment or supplement thereto) and the Offering Memorandum (excluding any amendment or supplement thereto) and the effect of which in the judgment of the Representative makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the Offering Memorandum.
(d) Officers Certificate. The Representative shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, a certificate of the chief financial officer or chief accounting officer of the Company and one additional senior executive officer of the Company who is satisfactory to the Representative (i) confirming that such officers have carefully reviewed the Time of Sale Information and the Offering Memorandum and, to the knowledge of such officers, the representations set forth in Sections 3(a) and 3(b) hereof are true and correct, (ii) confirming that the other representations and warranties of the Company in this Agreement are true and correct and that the Company has complied in all material respects with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date or the Additional Closing Date, as the case may be, and (iii) to the effect set forth in paragraphs (b) and (c) above.
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(e) Comfort Letters. On the date of this Agreement and on the Closing Date or the Additional Closing Date, as the case may be, KPMG LLP shall have furnished to the Representative, at the request of the Company, letters, dated the respective dates of delivery thereof and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Representative, containing statements and information of the type customarily included in accountants comfort letters to underwriters with respect to the financial statements and certain financial information of the Company and its Subsidiaries contained or incorporated by reference in each of the Time of Sale Information and the Offering Memorandum; provided that the letter delivered on the Closing Date or the Additional Closing Date, as the case may be, shall use a cut-off date no more than three business days prior to such Closing Date or such Additional Closing Date, as the case may be.
(f) Opinion and 10b-5 Statement of Counsel for the Company. Kirkland & Ellis LLP, counsel for the Company, shall have furnished to the Representative, at the request of the Company, their written opinion and 10b-5 statement, dated the Closing Date or the Additional Closing Date, as the case may be, and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Representative, substantially to the effect set forth in Annex C hereto.
(g) Opinion of General Counsel for the Company . Steven K. Covey, as General Counsel for the Company, shall have furnished to the Representative, at the request of the Company, his written opinion and 10b-5 statement, dated the Closing Date or the Additional Closing Date, as the case may be, and addressed to the Initial Purchasers, in form and substance reasonably satisfactory to the Representative, substantially to the effect set forth in Annex D hereto.
(h) Opinion and 10b-5 Statement of Counsel for the Initial Purchasers. The Representative shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, an opinion and 10b-5 statement, addressed to the Initial Purchasers, of Cravath, Swaine & Moore LLP, counsel for the Initial Purchasers, with respect to such matters as the Representative may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.
(i) No Legal Impediment to Issuance. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent the issuance or sale of the Securities; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent the issuance or sale of the Securities.
(j) Good Standing . The Representative shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, satisfactory evidence of the good standing of the Company and its Subsidiaries in their respective jurisdictions of organization and their good standing as foreign entities in such other jurisdictions as the Representative may reasonably request, in each case in writing or any standard form of telecommunication from the appropriate governmental authorities of such jurisdictions.
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(k) DTC. The Securities shall be eligible for clearance and settlement through DTC.
(l) Indenture and Securities . The Indenture shall have been duly executed and delivered by a duly authorized officer of the Company and the Trustee, and the Securities shall have been duly executed and delivered by a duly authorized officer of the Company and duly authenticated by the Trustee.
(m) Exchange Listing . The Underlying Securities shall have been listed on the Exchange, subject only to notice of issuance.
(n) Lock-up Agreements. The lock-up agreements, each substantially in the form of Exhibit A hereto (with such exceptions as shall have been agreed upon by the Representative), between you and the executive officers and directors of the Company relating to sales and certain other dispositions of shares of Common Stock or certain other securities, delivered to you on or before the date hereof, shall be in full force and effect on the Closing Date or Additional Closing Date, as the case may be.
(o) Additional Documents. On or prior to the Closing Date or the Additional Closing Date, as the case may be, the Company shall have furnished to the Representative such further certificates and documents as the Representative may reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Initial Purchasers.
7. Indemnification and Contribution .
(a) Indemnification of the Initial Purchasers. The Company agrees to indemnify and hold harmless each Initial Purchaser, its affiliates, directors and officers and each person, if any, who controls such Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum, any of the other Time of Sale Information, any Issuer Written Communication or the Offering Memorandum (or any amendment or supplement thereto) or any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Initial Purchaser furnished to the
22
Company in writing by such Initial Purchaser through the Representative expressly for use therein, it being understood and agreed that the only such information furnished by any Initial Purchaser consists of the information described as such in subsection (b) below.
(b) Indemnification of the Company. Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Initial Purchaser furnished to the Company in writing by such Initial Purchaser through the Representative expressly for use in the Preliminary Offering Memorandum, any of the other Time of Sale Information, any Issuer Written Communication or the Offering Memorandum (or any amendment or supplement thereto), it being understood and agreed that the only such information furnished by any Initial Purchaser consists of the following information in the Offering Memorandum furnished on behalf of each Initial Purchaser: the information contained in the fourth and fifth sentences of the eighth paragraph under the caption Plan of distribution and the information contained in the thirteenth and fourteenth paragraphs under the caption Plan of distribution, in each case in the Preliminary Offering Memorandum and the Offering Memorandum.
(c) Notice and Procedures. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such person (the Indemnified Person ) shall promptly notify the person against whom such indemnification may be sought (the Indemnifying Person ) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under paragraph (a) or (b) above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided , further , that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under paragraph (a) or (b) above. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any
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such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid or reimbursed as they are incurred. Any such separate firm for any Initial Purchaser, its affiliates, directors and officers and any control persons of such Initial Purchaser shall be designated in writing by J.P. Morgan Securities LLC and any such separate firm for the Company, its directors, its officers and any control persons of the Company shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Initial Purchasers on the other, from the offering of the Securities or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company, on the one hand, and the Initial Purchasers on the other, in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Initial Purchasers on the other, shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the Company from the sale of the Securities and the total discounts and commissions
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received by the Initial Purchasers in connection therewith, as provided in this Agreement, bear to the aggregate offering price of the Securities. The relative fault of the Company, on the one hand, and the Initial Purchasers on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Initial Purchasers and the parties relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
(e) Limitation on Liability. The Company and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to paragraph (d) above were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of paragraphs (d) and (e), in no event shall an Initial Purchaser be required to contribute any amount in excess of the amount by which the total discounts and commissions received by such Initial Purchaser with respect to the offering of the Securities exceeds the amount of any damages that such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers obligations to contribute pursuant to paragraphs (d) and (e) are several in proportion to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.
8. Termination . This Agreement may be terminated in the absolute discretion of the Representative, by notice to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date or, in the case of the Option Securities, prior to the Additional Closing Date (i) trading generally shall have been suspended or materially limited on or by any of the Exchange, the Nasdaq Stock Market, the Chicago Board Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade; (ii) trading of any securities issued or guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either within or outside the United States, that, in the judgment of the Representative, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the Offering Memorandum.
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9. Defaulting Initial Purchaser .
(a) If, on the Closing Date or the Additional Closing Date, as the case may be, any Initial Purchaser defaults on its obligation to purchase the Securities that it has agreed to purchase hereunder on such date (the Defaulting Initial Purchaser ), the non-defaulting Initial Purchasers may in their discretion arrange for the purchase of such Securities by other persons satisfactory to the Company on the terms contained in this Agreement. If, within 36 hours after any such default by any Initial Purchaser, the non-defaulting Initial Purchasers do not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Initial Purchasers to purchase such Securities on such terms. If other persons become obligated or agree to purchase the Securities of a defaulting Initial Purchaser, either the non-defaulting Initial Purchasers or the Company may postpone the Closing Date or the Additional Closing Date, as the case may be, for up to five full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Initial Purchasers may be necessary in the Time of Sale Information, the Offering Memorandum or in any other document or arrangement, and the Company agrees to promptly prepare any amendment or supplement to the Time of Sale Information or the Offering Memorandum that effects any such changes. As used in this Agreement, the term Initial Purchaser includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this Section 9, purchases Securities that a defaulting Initial Purchaser agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the Company as provided in paragraph (a) above, the aggregate principal amount of such Securities that remains unpurchased on the Closing Date or the Additional Closing Date, as the case may be, does not exceed one-eleventh of the aggregate principal amount of all the Securities to be purchased on such date, then the Company shall have the right to require each non-defaulting Initial Purchaser to purchase the aggregate principal amount of Securities that such Initial Purchaser agreed to purchase hereunder on such date plus such Initial Purchasers pro rata share (based on the aggregate principal amount of Securities that such Initial Purchaser agreed to purchase on such date) of the Securities of such defaulting Initial Purchaser or Initial Purchasers for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the Company as provided in paragraph (a) above, the aggregate principal amount of such Securities that remains unpurchased on the Closing Date or the Additional Closing Date, as the case may be, exceeds one-eleventh of the aggregate principal amount of all the Securities to be purchased on such date, or if the Company shall not exercise the right described in paragraph (b) above, then this Agreement or, with respect to any Additional Closing Date, the obligation of the Initial Purchasers to
26
purchase Securities on such Additional Closing Date, as the case may be, shall terminate without liability on the part of the non-defaulting Initial Purchasers. Any termination of this Agreement pursuant to this Section 9 shall be without liability on the part of the Company, except that the Company will continue to be liable for the payment of expenses as set forth in Section 10 hereof and except that the provisions of Section 7 hereof shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Initial Purchaser of any liability it may have to the Company or any non-defaulting Initial Purchaser for damages caused by its default.
10. Payment of Expenses .
(a) Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company will pay or cause to be paid all costs and expenses incident to the performance of its obligations hereunder, including without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Securities and any taxes payable in that connection; (ii) the costs incident to the preparation and printing of the Preliminary Offering Memorandum, any other Time of Sale Information, any Issuer Written Communication and the Offering Memorandum (including all exhibits, amendments and supplements thereto) and the distribution thereof; (iii) the costs of reproducing and distributing each of the Transaction Documents; (iv) the fees and expenses of the Companys counsel and independent accountants; (v) the fees and expenses incurred in connection with the registration or qualification of the Securities under the state or foreign securities or blue sky laws of such jurisdictions as the Representative may designate and the preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and expenses of counsel for the Initial Purchasers); (vi) any fees charged by rating agencies for rating the Securities; (vii) the fees and expenses of the Trustee and any paying agent (including related fees and reasonable expenses of any counsel to such parties); (viii) all expenses and application fees incurred in connection with any filing with, and clearance of the offering by, FINRA, if any, and the approval of the Securities for book-entry transfer by DTC; (ix) all expenses incurred by the Company in connection with any road show presentation to potential investors (other than costs incurred by employees of the Representative); (x) any fees charged by investment rating agencies for rating the Securities; and (xi) all expenses and application fees related to the listing of the Underlying Securities on the Exchange.
(b) If (i) this Agreement is terminated pursuant to Section 8(ii), (ii) the Company for any reason fails to tender the Securities for delivery to the Initial Purchasers or (iii) the Initial Purchasers decline to purchase the Securities for any reason permitted under this Agreement (other than upon a termination of this Agreement under Section 8), the Company agrees to reimburse the Initial Purchasers for all out-of-pocket costs and expenses (including the fees and expenses of their counsel) reasonably incurred by the Initial Purchasers in connection with this Agreement and the offering contemplated hereby; provided that the Company shall not be required to reimburse any out-of-pocket costs or expenses of a Defaulting Initial Purchaser. It is understood, however, that, except as provided in this Section 10 and Sections 7 and 12, the Initial Purchasers will pay the fees of their counsel.
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11. Persons Entitled to Benefit of Agreement . This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and any controlling persons referred to herein, and the affiliates of each Initial Purchaser referred to in Section 7 hereof. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Securities from any Initial Purchaser shall be deemed to be a successor merely by reason of such purchase.
12. Survival . The respective indemnities, rights of contribution, representations, warranties and agreements of the Company and the Initial Purchasers contained in this Agreement or made by or on behalf of the Company or the Initial Purchasers pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Securities and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Company or the Initial Purchasers.
13. Certain Defined Terms . For purposes of this Agreement, (a) except where otherwise expressly provided, the term affiliate has the meaning set forth in Rule 405 under the Securities Act; (b) the term business day means any day other than a day on which banks are permitted or required to be closed in New York City; (c) the term Subsidiary means the Companys consolidated subsidiaries (each a Subsidiary, and collectively, the Subsidiaries ); (d) the term Significant Subsidiary has the meaning set forth in Rule 1-02 of Regulation S-X under the Exchange Act; (e) the term Exchange Act means the Securities Exchange Act of 1934, as amended; and (f) the term written communication has the meaning set forth in Rule 405 under the Securities Act.
14. Miscellaneous .
(a) Authority of the Representative. Any action by the Initial Purchasers hereunder may be taken by the Representative, on behalf of the Initial Purchasers, and any such action taken by the Representative shall be binding upon the Initial Purchasers.
(b) Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication. Notices to the Initial Purchasers shall be given to the Representative c/o J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179 (fax: 212-270-1063); Attention: Santosh Sreenivasan. Notices to the Company shall be given to it at Navistar International Corporation, 2701 Navistar Drive, Lisle, Illinois, 60532, (fax: 331-332-2573); Attention: Treasurer.
(c) Governing Law. This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in such state.
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(d) Submission to Jurisdiction . The Company hereby submits to the exclusive jurisdiction of the U.S. federal and New York state courts in the Borough of Manhattan in the City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. The Company waives any objection that it may now or hereafter have to the laying of venue of any such suit or proceeding in such courts. The Company agrees that final judgment in any such suit, action or proceeding brought in such court shall be conclusive and binding upon the Company and may be enforced in any court to the jurisdiction of which the Company is subject by a suit upon such judgment.
(e) Waiver of Jury Trial. Each of the parties hereto hereby waives any right to trial by jury in any suit or proceeding arising out of or relating to this Agreement.
(f) Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.
(g) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.
(h) Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.
(i) Patriot Act. In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Initial Purchasers are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include the name and address of their respective clients, as well as other information that will allow the Initial Purchasers to properly identify their respective clients.
[ Remainder of this page intentionally left blank ]
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If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.
Very truly yours, | ||
NAVISTAR INTERNATIONAL CORPORATION | ||
By: |
/s/ Walter G. Borst |
|
Name: | Walter G. Borst | |
Title: | Executive Vice President and Chief Financial Officer |
[ Signature Page to Purchase Agreement ]
The foregoing Purchase Agreement is hereby
confirmed and accepted as of the date first above
written.
J.P. MORGAN SECURITIES LLC
For itself and on behalf of the
several Initial Purchasers listed
in Schedule 1 hereto.
By: |
/s/ Tim Oeljeschlager |
|
Name: | Tim Oeljeschlager | |
Title: | Vice President |
[ Signature Page to Purchase Agreement ]
SCHEDULE 1
Initial Purchaser |
Principal Amount
of Securities |
|||
J.P. Morgan Securities LLC |
$ | 120,000,000 | ||
Merrill Lynch, Pierce, Fenner & Smith Incorporated |
$ | 40,000,000 | ||
Credit Suisse Securities (USA) LLC |
$ | 40,000,000 | ||
Total |
$ | 200,000,000 |
ANNEX A
Additional Time of Sale Information
1. Pricing term sheet containing the terms of the Securities, dated October 7, 2013, substantially in the form of Annex B (the Pricing Supplement ).
ANNEX B
[Pricing Term Sheet Attached]
PRICING TERM SHEET
DATED OCTOBER 7, 2013
NAVISTAR INTERNATIONAL CORPORATION
$200,000,000 principal amount of
4.50% Senior Subordinated Convertible Notes due 2018
(the Convertible Notes Offering)
The information in this pricing term sheet supplements Navistar International Corporations preliminary offering memorandum, dated October 7, 2013 (the Preliminary Offering Memorandum), and supersedes the information in the Preliminary Offering Memorandum to the extent inconsistent with the information in the Preliminary Offering Memorandum. In all other respects, this term sheet is qualified in its entirety by reference to the Preliminary Offering Memorandum. Terms used herein but not defined herein shall have the respective meanings as set forth in the Preliminary Offering Memorandum.
Issuer: | Navistar International Corporation, a Delaware corporation (the Issuer). | |
Ticker / Exchange for Common Stock: | NAV / The New York Stock Exchange. | |
Pricing Date: | October 7, 2013. | |
Expected Settlement Date: | October 11, 2013 (T+3). | |
Notes: | 4.50% Senior Subordinated Convertible Notes due 2018 (the Notes). | |
Distribution: | Rule 144A without registration rights. | |
Aggregate Principal Amount: | $200,000,000 principal amount of Notes (or a total of $230,000,000 principal amount of Notes if the initial purchasers over-allotment option to purchase up to $30,000,000 principal amount of Notes is exercised in full). | |
Maturity: | October 15, 2018, unless earlier converted, redeemed or repurchased. | |
Interest Payment Dates: | Interest will accrue from the Settlement Date and will be payable semiannually in arrears on April 15 and October 15 of each year, beginning on April 15, 2014, to holders of record as of the close of business on the immediately preceding April 1 or October 1, as the case may be. | |
Reference Price: | $36.50 per share of the Issuers common stock (Common Stock), the last reported sale price of the Common Stock on October 7, 2013. | |
Conversion Premium: | 60% above the Reference Price. | |
Initial Conversion Price: | Approximately $58.40 per share of Common Stock. | |
Initial Conversion Rate: | 17.1233 shares of Common Stock per $1,000 principal amount of the Notes. | |
Conversion Trigger Price: | Approximately $75.92, which is 130% of the Initial Conversion Price. | |
Joint Book-Running Managers: |
J.P. Morgan Securities LLC Merrill Lynch, Pierce, Fenner & Smith Incorporated Credit Suisse Securities (USA) LLC |
|
CUSIP / ISIN Numbers: | 63934E AP3 / US63934EAP34 | |
Optional Redemption: | On or after October 15, 2016, the Notes will be subject to redemption, in whole or in part, at the Issuers option, at a redemption price equal to 100% of the principal amount of Notes to be redeemed, plus accrued and unpaid interest (including any additional interest) to, but excluding, the redemption date, if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending within 10 trading days immediately prior to the date of the redemption notice exceeds 130% of the applicable conversion price for the Notes on each applicable trading day. If the Issuer calls any or all of the Notes for redemption, holders of the Notes will have the right to convert their Notes at any time until the close of business on the business day preceding the redemption date. If a holder elects to convert its notes |
in connection with a redemption notice, the Issuer will increase the conversion rate as set forth under Description of notesConversion rightsAdjustment to shares delivered upon conversion upon a make-whole fundamental change or notice of redemption in the Preliminary Offering Memorandum. | ||
Repurchase at Option of Holders: | If a fundamental change (as defined in the Preliminary Offering Memorandum) occurs, holders may, at their option, require the Issuer to purchase for cash all or any portion of their Notes. The fundamental change purchase price will equal 100% of the principal amount of the Notes to be purchased plus accrued and unpaid interest (including any additional interest) to but excluding the fundamental change purchase date. | |
Adjustment to Shares Delivered upon Certain Conversions: | The following table sets forth the number of additional shares of the Common Stock by which the conversion rate shall be increased for certain conversions in connection with a make-whole fundamental change or a notice of redemption based on the stock price and effective date for such make-whole fundamental change or notice of redemption: |
Effective Date |
$36.50 | $40.00 | $45.00 | $50.00 | $60.00 | $75.00 | $100.00 | $125.00 | $150.00 | $200.00 | $250.00 | |||||||||||||||||||||||||||||||||
October 15, 2013 |
10.2739 | 8.9618 | 7.3858 | 6.1968 | 4.5531 | 3.1062 | 1.8896 | 1.2819 | 0.9294 | 0.5475 | 0.3495 | |||||||||||||||||||||||||||||||||
October 15, 2014 |
10.2739 | 8.8968 | 7.2270 | 5.9788 | 4.2795 | 2.8248 | 1.6544 | 1.0982 | 0.7872 | 0.4599 | 0.2929 | |||||||||||||||||||||||||||||||||
October 15, 2015 |
10.2739 | 8.7271 | 6.9461 | 5.6301 | 3.8747 | 2.4311 | 1.3440 | 0.8663 | 0.6136 | 0.3578 | 0.2288 | |||||||||||||||||||||||||||||||||
October 15, 2016 |
10.2739 | 8.3977 | 6.4745 | 5.0753 | 3.2657 | 1.8729 | 0.9401 | 0.5843 | 0.4123 | 0.2451 | 0.1593 | |||||||||||||||||||||||||||||||||
October 15, 2017 |
10.2739 | 7.9301 | 5.7633 | 4.2186 | 2.3304 | 1.0750 | 0.4453 | 0.2747 | 0.2020 | 0.1272 | 0.0846 | |||||||||||||||||||||||||||||||||
October 15, 2018 |
10.2739 | 7.8767 | 5.0989 | 2.8767 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |
The exact stock prices and effective dates may not be set forth in the table above, in which case:
| if the stock price is between two stock prices in the table or the effective date is between two effective dates in the table, the number of additional shares will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock prices and the earlier and later effective dates, as applicable, based on a 365-day year; |
| if the stock price is greater than $250.00 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to the conversion rate; or |
| if the stock price is less than $36.50 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table above), no additional shares will be added to the conversion rate. |
Notwithstanding the foregoing, in no event will the total number of shares of Common Stock issuable upon conversion exceed 27.3973 shares per $1,000 principal amount of Notes, subject to adjustments in the same manner as the conversion rate set forth under Description of notesConversion rate adjustments in the Preliminary Offering Memorandum.
Additional Information
1. The risk factor under the caption Past and potential further downgrades in our debt ratings may adversely affect our liquidity, competitive position and access to capital markets on page 26 of the Preliminary Offering Memorandum is amended to read as follows:
The major debt-rating agencies routinely evaluate and rate our debt according to a number of factors, among which are our perceived financial strength and transparency with rating agencies and timeliness of financial reporting. In 2012 and 2013, the major debt-rating agencies downgraded our ratings, including a downgrade by Standard & Poors Rating Services on October 7, 2013. Further, Standard & Poors Ratings Services currently has our rating outlook as developing. Any further downgrade in our credit ratings and the negative publicity as a result of any such further downgrade could adversely affect our continued access to trade credit on customary terms as well as our ability to access capital in the future under acceptable terms and conditions.
2
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.
3
ANNEX C
[Form of Kirkland & Ellis LLP Opinion and 10b-5 Attached]
300 North LaSalle Chicago, Illinois 60654 |
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www.kirkland.com |
Facsimile: 312 862-2200 |
***SUBJECT TO K&E OPINION COMMITTEE REVIEW***
October [ ], 2013
J. P. Morgan Securities LLC
As Representative of the
several Initial Purchasers listed
in Schedule 1 to the Purchase Agreement (as defined below)
c/o J. P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Re: | Navistar International Corporation |
Ladies and Gentlemen:
We are issuing this letter in our capacity as special counsel for Navistar International Corporation, a Delaware corporation (the Company ), in response to the requirement in Section 6(f) of the Purchase Agreement, dated October [ ], 2013 (the Purchase Agreement ), among the Company and you, as representative of the several Initial Purchasers listed in Schedule 1 thereto (the Initial Purchasers ). Every term that is defined or given a special meaning in the Purchase Agreement and that is not given a different meaning in this letter has the same meaning whenever it is used in this letter as the meaning it is given in the Purchase Agreement.
In connection with the preparation of this letter, we have, among other things, read:
(a) | the Preliminary Offering Memorandum, dated October [ ], 2013, covering the offer and sale of the Notes, as supplemented or amended by the Pricing Supplement, dated October [ ], 2013, containing the terms of the Notes (in each case including all documents specifically incorporated by reference therein) (collectively, the Time of Sale Information ); |
(b) | the Final Offering Memorandum, dated October [ ], 2013, covering the offer and sale of the Notes (including all documents specifically incorporated by reference therein) (the Offering Memorandum ); |
(c) | an executed copy of the Purchase Agreement; |
(d) | an executed copy of the Indenture; |
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(e) | a specimen certificate of the Notes; |
(f) | certified copies of resolutions adopted by (i) the Companys board of directors on October 2, 2013; and (ii) the pricing committee of the Companys board of directors on October [7], 2013; |
(g) | a certificate, dated October [ ], 2013, from the Secretary of the State of Delaware as to the good standing of the Company, together with a facsimile bringdown thereof dated October [ ], 2013; |
(h) | documents listed on Exhibit A hereto (the Specified Contracts ); |
copies of all certificates and other documents delivered today at the closing of the purchase and sale of the Notes under the Purchase Agreement; and
(i) | such other documents, records and other instruments as we have deemed necessary or appropriate in order to deliver the opinions set forth herein. |
The Purchase Agreement, the Indenture and the Notes are collectively referred to herein as the Transaction Documents .
Subject to the assumptions, qualifications, exclusions and other limitations which are identified in this letter, we advise you that:
1. | Each Transaction Document has been duly authorized, executed and delivered by the Company. |
2. | The Indenture is a valid instrument, legally binding on the Company and enforceable against the Company in accordance with its terms. |
3. | When paid for by the Initial Purchasers in accordance with the terms of the Purchase Agreement (assuming due authorization, execution and delivery of the Indenture by the Trustee and due authentication and delivery of the Notes by the Trustee in accordance with the Indenture), the Notes will constitute valid and binding obligations of the Company, and will be enforceable against the Company in accordance with their terms. |
4. | When the Notes are delivered to the Initial Purchasers, (i) the Notes will be convertible, at the option of the holders, into shares of the Companys common stock, par value $0.10 per share (the Common Stock ), in accordance with the terms of the Indenture, (ii) the shares of such Common Stock initially issuable upon conversion of the Notes have been duly authorized and reserved, (iii) when issued upon such conversion, such shares of Common Stock will be validly issued, fully paid and nonassessable, and (iv) the stockholders of the Company will have no preemptive rights with respect to the Notes or the Common Stock under the General Corporation Law of the State of Delaware, the Certificate of Incorporation, the By-laws or any contract set forth on Exhibit A attached hereto. |
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5. | The execution and delivery by the Company of the Transaction Documents and the consummation of the transactions contemplated thereby (including, without limitation, the issuance and sale of the Notes to the Initial Purchasers) do not conflict with or constitute or result in a breach or default under (or an event which with notice or the passage of time or both would constitute a default under) or violation of any of, (i) the Certificate of Incorporation or the By-laws, (ii) any of the Specified Laws (as defined below), or (iii) the terms or provisions of any contract set forth on Exhibit A attached hereto (provided that we express no opinion with respect to any financial test or the triggering of a cross default provision in any such contract as a result of a default caused under any other contract), except for, in the case of clause (iii), any such conflict, breach, violation, default or event which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the condition, financial or otherwise, results of operations, earnings or business of the Company and its subsidiaries, taken as a whole. (The advice in this paragraph is referred to herein as the No Conflicts Opinion ). |
6. | The Company is not required to obtain any consent, approval, authorization or order of any governmental authority (including, without limitation, the New York Stock Exchange (the NYSE ) or the Trust Indenture Act of 1939, as amended (the Trust Indenture Act )) for the Companys execution, delivery and performance of the Transaction Documents and the consummation of the transactions contemplated thereby (including the issuance of the Shares of Common Stock issuable upon conversion of the Notes), except for the NYSEs authorization of the listing of the shares of Common Stock that the Notes will be convertible into, which the Company obtained on October [ ], 2013. (The advice in this paragraph is referred to herein as the No Consent Opinion .) |
7. | No registration under the Securities Act of 1933, as amended (the Securities Act), of the Notes is required in connection with the sale of the Notes to the Initial Purchasers in the manner contemplated by the Purchase Agreement, the Time of Sale Information and the Offering Memorandum or in connection with the initial resale of the Notes by the Initial Purchasers in the manner contemplated by the Purchase Agreement, the Time of Sale Information and the Offering Memorandum, and the Indenture is not required to be qualified under the Trust Indenture Act of 1939, as amended, in each case assuming: (i) that the Initial Purchasers reasonably believed the purchasers who buy such Notes in the initial resale thereof are qualified institutional buyers as defined in Rule 144A promulgated under the Securities Act; (ii) the accuracy and completeness of the Initial Purchasers representations set forth in Section [ ] of the Purchase Agreement, and those of the Company set forth in Section [ ] of the Purchase Agreement regarding, among other things, the absence of a general solicitation or general advertising in connection with the sale of such Notes to the Initial Purchaser and the initial resales thereof; and (iii) the compliance with the procedures set forth in the Purchase Agreement by the Initial Purchasers and the Company. |
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8. | The statements set forth under the caption Description of notes in the Time of Sale Information and in the Offering Memorandum, to the extent that such statements purport to summarize certain terms and provisions of the Indenture and the Notes, are correct in all material respects. |
9. | We have no knowledge about any legal or governmental proceeding that is pending against the Company or its Significant Subsidiaries that has caused us to conclude that such proceeding would be required to be described by Item 103 of Regulation S-K under the Securities Act if the issuance of the Notes was being registered under the Securities Act, but is not so described in the Time of Sale Information and the Offering Memorandum. |
10. | The statements in the Time of Sale Information and the Offering Memorandum under the caption Certain U.S. federal income tax considerations for non-U.S. holders, insofar as such statements constitute a summary of the legal matters or documents referred to therein, are accurate in all material respects. |
11. | The Company is not and, immediately after the sale of the Notes to the Initial Purchasers and application of the net proceeds therefrom as described in the Time of Sale Information and the Offering Memorandum under the caption Use of proceeds, will not be an investment company as such term is defined in the Investment Company Act of 1940, as amended. |
12. | Neither the sale, issuance, execution or delivery of the Notes nor the application of proceeds therefrom as set forth under the caption Use of proceeds in the Time of Sale Information and the Offering Memorandum will contravene Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve System. |
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We have not undertaken any investigation to determine the facts or assumptions upon which the advice in this letter is based. We have not undertaken any investigation or search of any records of any court or any governmental agency or body for purposes of this letter.
We have assumed for purposes of this letter: that each document we have reviewed for purposes of this letter is accurate and complete, each such document that is an original is authentic, each such document that is a copy conforms to an authentic original, and all signatures on each such document are genuine; that the parties thereto, other than the Company, had the power, corporate or other, to enter into and perform all obligations thereunder; that each such document was duly authorized by all requisite corporate action of the parties and that such documents were duly executed and delivered by each party thereto, other than the Company; and that the Purchase Agreement and every other agreement we have examined for purposes of this letter constitutes a valid and binding obligation of each party to that document (except that we
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make no such assumption with respect to the Company) and that each such party has satisfied all legal requirements that are applicable to such party to the extent necessary to entitle such party to enforce such agreement and that each party to any document is in good standing and duly incorporated or organized under the laws of the state of its incorporation and that you have acted in good faith and without notice of any fact that has caused you to reach any conclusion contrary to any of the advice provided in this letter. We have also made other assumptions which we believe to be appropriate for purposes of this letter.
In preparing this letter we have relied without independent verification upon: (i) information contained in certificates obtained from governmental authorities; (ii) factual information represented to be true in the Purchase Agreement and other documents specifically identified at the beginning of this letter as having been read by us including certificates from officers of the Company; (iii) factual information provided to us by the Company or its representatives; and (iv) factual information we have obtained from such other sources as we have deemed reasonable. We have assumed that there has been no relevant change or development between the dates as of which the information was given and the date of this letter and that the information cited in the preceding sentence upon which we have relied is accurate and does not omit disclosures necessary to prevent such information from being misleading.
While we have reviewed certain corporate records and other documents specifically identified at the beginning of this letter as having been read by us, we have not, except as explicitly indicated in numbered paragraphs 8 and 10 above, undertaken any other investigation to determine the facts upon which the advice in this letter is based. We can, however, confirm that we do not have knowledge that has caused us to conclude that our reliance and assumptions cited in the two immediately preceding paragraphs are unwarranted. Whenever this letter provides advice about (or based upon) our knowledge of any particular information or about any information which has or has not come to our attention such advice is based entirely on the actual knowledge obtained in acting as legal counsel to the Company at the time this letter is delivered on the date it bears by the lawyers with Kirkland & Ellis LLP at that time who spent substantial time representing the Company in connection with the offering of the Notes effected pursuant to the Prospectus, after consultation with other lawyers in our firm who spent substantial time representing the Company on other matters.
Each opinion (an enforceability opinion) in this letter that any particular contract is a valid and binding obligation or is enforceable in accordance with its terms is subject to: (i) the effect of bankruptcy, insolvency, fraudulent conveyance and other similar laws and judicially developed doctrines in this area such as substantive consolidation and equitable subordination; (ii) the effect of general principles of equity; and (iii) other commonly recognized statutory and judicial constraints on enforceability including statutes of limitations. In addition, we do not express any opinion as to the enforceability of any rights to contribution or indemnification which may be violative of public policy underlying any law, rule or regulation (including federal or state securities law, rule or regulation). General principles of equity include but are not limited to: principles limiting the availability of specific performance and injunctive relief; principles which limit the availability of a remedy under certain circumstances where another
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remedy has been elected; principles requiring reasonableness, good faith and fair dealing in the performance and enforcement of an agreement by the party seeking enforcement; principles which may permit a party to cure a material failure to perform its obligations; and principles affording equitable defenses such as waiver, laches and estoppel. It is possible that terms in a particular contract covered by our enforceability opinion may not prove enforceable for reasons other than those explicitly cited in this letter should an actual enforcement action be brought, but (subject to all the exceptions, qualifications, exclusions and other limitations contained in this letter) such unenforceability would not in our opinion prevent the party entitled to enforce that contract from realizing the principal benefits purported to be provided to that party by the terms in that contract which are covered by our enforceability opinion.
Our advice on every legal issue addressed in this letter is based exclusively on the internal laws of the State of New York, the General Corporation Law of the State of Delaware and the federal laws of the United States (except that we do not opine as to the federal securities laws with respect to the No Conflicts Opinion and the No Consent Opinion) (the Specified Laws ) which, in our experience, are normally applicable to general business corporations which are not engaged in regulated business activities and to transactions of the type contemplated under the Purchase Agreement (but without my having made any investigation as to any other laws), and represents our opinion as to how that issue would be resolved were it to be considered by the highest court in the jurisdiction which enacted such law. We note that issues addressed by this letter may be governed in whole or in part by other laws, but we express no opinion as to whether any relevant difference exists between the laws upon which our advice is based or any other laws which may actually govern. The manner in which any particular issue would be treated in any actual court case would depend in part on facts and circumstances particular to the case and would also depend on how the court involved chose to exercise the wide discretionary authority generally available to it. This letter is not intended to guarantee the outcome of any legal dispute. In addition, none of the opinions or other advice contained in this letter covers or otherwise addresses any of the following types of provisions which may be contained in the Transaction Documents: (i) provisions mandating contribution towards judgments or settlements among various parties; (ii) waivers of benefits and rights to the extent they cannot be waived under applicable law; (iii) provisions providing for liquidated damages, additional interest and redemption premiums, in each case if deemed to constitute penalties; (iv) provisions which might require indemnification or contribution in violation of general principles of equity or public policy, including, without limitation, indemnification or contribution obligations which arise out of the failure to comply with applicable state or federal securities laws; or (v) requirements in the Transaction Documents specifying that provisions thereof may only be waived in writing (these provisions may not be valid, binding or enforceable to the extent that an oral agreement or an implied agreement by trade practice or course of conduct has been created modifying any provision of such documents). We express no opinion with respect to any laws, statutes, governmental rules or regulations or decisions which in our experience are not considered for or covered by opinions like those contained in this letter or are not generally applicable to transactions of the kind covered by the Purchase Agreement or covered by opinions typically delivered in connection with transactions of the kind covered by the Purchase Agreement or, except as otherwise stated in paragraph 9 hereof, to compliance with any disclosure requirement
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or any prohibition against fraud or misrepresentation. None of the opinions or other advice contained in this letter considers or covers (i) any antifraud laws, rules or regulations, (ii) any foreign or state securities (or blue sky) laws, rules or regulations, (iii) laws, rules or regulations with respect to any financial statements or supporting schedules (or any notes to any such statements or schedules) or other financial, accounting or statistical information set forth in (or omitted from) the Time of Sale Information or the Offering Memorandum, (iv) any laws, rules or regulations of the Financial Industry Regulatory Authority, Inc. relating to the compensation of underwriters; or (v) any laws, statutes, governmental rules or regulations or decisions which in our experience are not usually considered for or covered by opinions like those contained in this letter or are not generally applicable to transactions of the kind covered by the Purchase Agreement including any regulatory laws or requirements specific to the industry in which you or the Company is engaged. In our opinion, New York state courts would apply New York state law to resolve state law issues arising under the Transaction Documents. We express no opinion as to what law might be applied by any other courts to resolve any issue addressed by our opinion and we express no opinion as to whether any relevant difference exists between the laws upon which our opinions are based and any other laws which may actually be applied to resolve issues which may arise. The manner in which any particular issue would be treated in any actual court case would depend in part on facts and circumstances particular to the case and would also depend on how the court involved chose to exercise the wide discretionary authority generally available to it.
[We note that certain of the Specified Contracts are governed by laws other than the Specified Laws. Our advice expressed herein is based on the plain language of such Specified Contracts, without regard to the interpretation of such language under such other laws, and we do not assume any responsibility with respect to the effect on the opinions set forth herein of any interpretation thereof inconsistent with such understanding.]
Our opinions expressed herein are limited to the specific issues addressed herein and are limited in all respects to documents, laws and facts existing on the date hereof. By rendering my opinions, we do not undertake to advise you of any changes in such documents, laws or facts which may occur after the date hereof.
This letter speaks as of the time of its delivery on the date it bears. We do not assume any obligation to provide you with any subsequent opinion or advice by reason of any fact about which we did not have knowledge at that time, by reason of any change subsequent to that time in any law or other governmental requirement or interpretation thereof covered by any of our opinions or advice, or for any other reason.
TO ENSURE COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE SERVICE, WE INFORM YOU THAT THIS LETTER AND THE OPINION CONTAINED HEREIN WERE NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING TAX-RELATED PENALTIES UNDER THE CODE. THIS LETTER AND THE OPINION CONTAINED HEREIN WERE WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE
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SECURITIES. EACH TAXPAYER SHOULD SEEK ADVICE BASED ON THE TAXPAYERS PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.
This letter is being furnished to you and the several Initial Purchasers solely in their capacity as initial purchasers in connection with the sale of the Notes to the Initial Purchasers pursuant to the Purchase Agreement and may only be relied upon by the Initial Purchasers in their capacity as initial purchasers. . Without our written consent: (i) no person (including any person that acquires any Notes from the Initial Purchasers) other than the Initial Purchasers may rely on this letter for any purpose; (ii) this letter may not be cited or quoted in any financial statement, offering memorandum, prospectus, private placement memorandum or other similar document; (iii) this letter may not be cited or quoted in any other document or communication which might encourage reliance upon this letter by any person or for any purpose excluded by the restrictions in this paragraph; and (iv) copies of this letter may not be furnished to anyone for purposes of encouraging such reliance.
Sincerely,
KIRKLAND & ELLIS LLP |
EXHIBIT A
1. | Indenture, dated as of October 28, 2009, by and among Navistar International Corporation, as issuer, Navistar, Inc., as guarantor, and The Bank of New York Mellon Trust Company, as Trustee, for Navistar International Corporations 8.25% Senior Notes due 2021 |
2. | Indenture, dated as of October 28, 2009, by and between Navistar International Corporation, as Issuer, and The Bank of New York Mellon Trust Company, as Trustee, for Navistar International Corporations 3.00% Senior Subordinated Convertible Notes due 2014 |
3. | Amendment No. 1 to Indenture, dated as of February 13, 2013, between Navistar Financial Dealer Note Master Owner Trust II, as issuing entity, and Citibank, N.A., as indenture trustee |
4. | Pooling and Servicing Agreement, dated November 2, 2011, by and among Navistar Financial Corporation, as servicer, Navistar Financial Securities Corporation, as depositor, and Navistar Financial Dealer Note Master Owner Trust II, as issuing entity |
5. | Amendment No. 1 to the Pooling and Servicing Agreement, dated as of February 13, 2013, among Navistar Financial Securities Corporation, as depositor, Navistar Financial Corporation, as servicer, and Navistar Financial Dealer Note Master Owner Trust II, as issuing entity |
6. | Note Purchase Agreement, dated as of August 29, 2012, among Navistar Financial Services Corporation, Navistar Financial Corporation, Bank of America, National Association, as a Managing Agent, the Administrative Agent and a Committed Purchaser, The Bank of Nova Scotia, as a Managing Agent and a Committed Purchaser, Liberty Street Funding LLC, as a Conduit Purchaser, Credit Suisse AG, New York Branch, as a Managing Agent, Credit Suisse AG, Cayman Islands Branch as a Committed Purchaser, and Alpine Securitization Corp., as a Conduit Purchaser. |
7. | Amendment No. 1 to the Note Purchase Agreement, dated as of March 18, 2013, among Navistar Financial Securities Corporation, as the seller, Navistar Financial Corporation, as the servicer, The Bank of Nova Scotia, as a managing agent and as a committed purchaser, Liberty Street Funding LLC, as a conduit purchaser, Credit Suisse AG, New York Branch, as a managing agent, Credit Suisse AG, Cayman Islands Branch, as a committed purchaser, Alpine Securitization Corp., as a conduit purchaser, and Bank of America, National Association, as administrative agent, as a managing agent and as a committed purchaser. |
8. | Amendment No. 2 to the Note Purchase Agreement, dated as of September 13, 2013, among Navistar Financial Securities Corporation, as the seller, Navistar Financial Corporation, as the servicer, The Bank of Nova Scotia, as a managing agent and as a committed purchaser, Liberty Street Funding LLC, as a conduit purchaser, Credit Suisse AG, New York Branch, as a managing agent, Credit Suisse AG, Cayman Islands Branch, as a committed purchaser, and Bank of America, National Association, as administrative agent, as a managing agent and as a committed purchaser. |
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9. | Trust Agreement, dated November 2, 2011, between Navistar Financial Securities Corporation, as Depositor, and Deutsche Bank Trust Company Delaware, as Owner Trustee. |
10. | Indenture, dated November 2, 2011, between Navistar Financial Dealer Note Master Owner Trust II, as issuing entity, and The Bank of New York Mellon, as indenture trustee, as amended. |
11. | Series 2013-1 Indenture Supplement, dated as of February 14, 2013, between Navistar Financial Dealer Note Master Owner Trust II, as issuing entity, and Citibank, N.A., as indenture trustee. |
12. | Series 2012-VFN Indenture Supplement, dated as of August 29, 2012, between Navistar Financial Dealer Note Master Owner Trust II, as issuing entity, and The Bank of New York Mellon, as indenture trustee. |
13. | Amendment No. 1 to Series 2012-VFN Indenture Supplement, dated as of September 13, 2013, between Navistar Financial Dealer Note Master Owner Trust II, as the issuing entity, and Citibank, N.A. (as successor to The Bank of New York Mellon), as indenture trustee. |
14. | Series 2011-1 Indenture Supplement to the Indenture dated November 2, 2011, between Navistar Financial Dealer Note Master Owner Trust II, as Issuing Entity, and The Bank of New York Mellon, a New York banking corporation, as Indenture Trustee. |
15. | Second Amended and Restated Credit Agreement, dated as of December 2, 2011, by and among Navistar Financial Corporation, a Delaware corporation, and Navistar Financial, S.A. de C.V., Sociedad Financiera De Objeto Multiple, Entidad No Regulada, a Mexican corporation, as borrowers, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., as syndication agent, and Citibank, N.A., as documentation agent. |
16. | Third Amended and Restated Parents Side Agreement, dated as of December 2, 2011, by and between Navistar International Corporation, a Delaware corporation, and Navistar, Inc. (formerly known as International Truck and Engine Corporation), a Delaware corporation, for the benefit of the lenders from time to time party to the Second Amended and Restated Credit Agreement. |
17. | Third Amended and Restated Parent Guarantee, dated as of December 2, 2011, by Navistar International Corporation, a Delaware corporation, in favor of JPMorgan Chase Bank, N.A., as administrative agent for the lenders party to the Second Amended and Restated Credit Agreement. |
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18. | Amended and Restated Security, Pledge and Trust Agreement dated as of July 1, 2005, between Navistar Financial Corporation and Deutsche Bank Trust Company Americas, as Trustee, pursuant to the terms of the Credit Agreement. |
19. | First Amendment, dated as of December 16, 2009, to the Amended and Restated Security, Pledge and Trust Agreement, dated as of July 1, 2005, between Navistar Financial Corporation, a Delaware corporation, and Deutsche Bank Trust Company Americas, a corporation duly organized and existing under the laws of the State of New York, acting individually and as trustee for the holders of the secured obligations under the Amended and Restated Credit Agreement. |
20. | Second Amendment, dated as of December 2, 2011, to the Amended and Restated Security, Pledge and Trust Agreement, dated as of July 1, 2005, between Navistar Financial Corporation, a Delaware corporation, and Deutsche Bank Trust Company Americas, a corporation duly organized and existing under the laws of the State of New York, acting individually and as trustee for the holders of the secured obligations under the Second Amended and Restated Credit Agreement. |
21. | Amended and Restated Intercreditor Agreement, dated as of December 2, 2011, by and among Navistar Financial Corporation, a Delaware corporation, Wells Fargo Equipment Finance, Inc., a Minnesota corporation, Deutsche Bank Trust Company Americas, a corporation duly organized and existing under the laws of the State of New York, acting individually and as trustee for the holders of the secured obligations under the Second Amended and Restated Credit Agreement, and JPMorgan Chase Bank, N.A., as administrative agent for the lenders party to the Second Amended and Restated Credit Agreement. |
22. | Loan Agreement for the IFA Bonds dated as of October 1, 2010 between Navistar International Corporation and the Illinois Finance Authority (IFA). |
23. | Loan Agreement for the Cook County Bonds dated as of October 1, 2010 by and between Navistar International Corporation and The County of Cook, Illinois. |
24. | Bond Guarantee in respect of the IFA Bonds dated as of October 1, 2010 from Navistar, Inc. to Citibank, N.A., as the Trustee. |
25. | Bond Guarantee in respect of the Cook County Bonds dated as of October 1, 2010 from Navistar, Inc. to Citibank, N.A., as the Trustee |
26. | Credit Agreement, dated August 17, 2012, among Navistar, Inc., as Borrower, Navistar International Corporation, the Lenders Party hereto, and J.P. Morgan Chase Bank, N.A., as Administrative Agent and Collateral Agent. |
27. | First Amendment to the Term Loan Credit Agreement, the Guarantee and Collateral Agreement, and the Collateral Cooperation Agreement, dated April 2, 2013, among Navistar, Inc., as Borrower, Navistar International Corporation, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent |
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28. | Amended and Restated ABL Credit Agreement, dated August 17, 2012, among Navistar, Inc., as Borrower, the Lenders Party hereto, Bank of America, N.A., as Administrative Agent, J.P. Morgan Chase Bank, N.A. and Wells Fargo Capital Finance, LLC, as Syndication Agents, Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, and Wells Fargo Capital Finance, LLC, as Joint Lead Arrangers and Joint Book Managers, and Credit Suisse Securities (USA) LLC, as Joint Book Manager. |
29. | Amendment No. 1 to the Amended and Restated ABL Credit Agreement and the Amended and Restated Security Agreement, dated April 2, 2013, among Navistar, Inc., as Borrower, the financial institutions party thereto, and Bank of America, N.A., as Administrative Agent. |
30. | Registration Rights Agreement, effective as of October 5, 2012, by and among the Company and the holders signatory thereto. |
31. | Rights Agreement, dated as of June 19, 2012, by and between Navistar International Corporation and Computershare Shareowner Services LLC, as Rights Agent. |
32. | Amendment No. 1 to the Rights Agreement, effective as of October 5, 2012, between Navistar International Corporation and Computershare Shareowner Services LLC, as rights agent. |
33. | Amendment No. 2 to the Rights Agreement, effective as of October 5, 2012, between Navistar International Corporation and Computershare Shareowner Services LLC, as rights agent. |
34. | Amendment No. 3 to the Rights Agreement, dated as of October 19, 2012, between Navistar International Corporation and Computershare Shareowner Services LLC, as rights agent. |
35. | Amendment No. 4 to the Rights Agreement, dated as of June 17, 2013, between Navistar International Corporation and Computershare Shareowner Services LLC, as rights agent. |
36. | Amendment No. 5 to the Rights Agreement, dated as of July 14, 2013, between Navistar International Corporation and Computershare Inc., successor-in-interest to Computershare Shareowner Services LLC, as rights agent. |
300 North LaSalle Chicago, Illinois 60654 |
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www.kirkland.com |
Facsimile: 312 862-2200 |
***SUBJECT TO K&E OPINION COMMITTEE REVIEW***
October [ ], 2013
J. P. Morgan Securities LLC
As Representative of the
several Initial Purchasers listed
in Schedule 1 of the Purchase Agreement (as defined below)
c/o J. P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Re: | Navistar International Corporation |
Ladies and Gentlemen:
We are issuing this letter in our capacity as special counsel for and at the request of Navistar International Corporation, a Delaware corporation (the Company ), in response to the requirement in Section 6(f) of the Purchase Agreement, dated October [ ], 2013 (the Purchase Agreement ), by and among the Company and you, as representative of the several Initial Purchasers named in Schedule 1 thereto (collectively, the Initial Purchasers ). Every term which is defined or given a special meaning in the Purchase Agreement and which is not given a different meaning in this letter has the same meaning whenever it is used in this letter as the meaning it is given in the Purchase Agreement.
In the above capacity, we have reviewed the Time of Sale Information and the offering memorandum of the Company, dated October [ ], 2013, relating to the sale of the Notes (in each case including all documents specifically incorporated by reference therein) (the Offering Memorandum ). For purposes of this letter, Time of Sale Information means collectively, the Preliminary Offering Memorandum, as supplemented or amended by the Pricing Supplement Notes (in each case including all documents specifically incorporated by reference therein).
The purpose of our professional engagement was not to establish factual matters, and the preparation of the Time of Sale Information and Offering Memorandum involved many determinations of a wholly or partially nonlegal character. Except to the extent explicitly indicated in numbered paragraphs 8 and 10 of our other letter to you dated the date hereof regarding the sections Description of notes and Certain U.S. federal income tax considerations, we have not independently verified, and do not assume any responsibility for, the accuracy, completeness or fairness of the Time of Sale Information or Offering
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Memorandum and make no representation that the actions taken in connection with the preparation and review of the Time of Sale Information and Offering Memorandum were sufficient to cause the Time of Sale Information and Offering Memorandum to be accurate, complete or fair. We were not engaged by the Company to prepare the periodic reports or other materials incorporated by reference into the Time of Sale Information, and our knowledge about those matters is limited to our review thereof.
We can, however, confirm that we have participated in the preparation of the Time of Sale Information and Offering Memorandum other than any documents specifically incorporated by reference therein and have participated in conferences with representatives of the Company, other counsel for the Company, representatives of the independent accountants of the Company, you and your representatives and counsel during which disclosures in the Time of Sale Information and the Offering Memorandum and related matters were discussed, and have reviewed such other documents as we deemed appropriate.
Based on the foregoing (relying as to matters of fact to a large extent on statements of officers and other representatives of the Company), we can advise you that nothing has come to our attention that has caused us to conclude that the Time of Sale Information as of October 7, 2013 and the Offering Memorandum at the date it bears or on the date of this letter contained or contains an untrue statement of a material fact or omits or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. We note that the Time of Sale Information and the Offering Memorandum have been prepared in the context of Rule 144A transaction and not as part of a registration statement under the Securities Act of 1933, as amended.
This letter does not consider or cover, and we do not express any view with respect to any financial statements or supporting schedules (or any notes to any such statements or schedules) or other financial information or accounting data set forth in (or omitted from) the Time of Sale Information or the Offering Memorandum. The advice in this letter is limited to the federal securities laws of the United States of America. This letter speaks as of the time of its delivery on the date it bears. We do not assume any obligation to provide you with any subsequent advice.
This letter may be relied upon by the Initial Purchasers solely in their capacity as initial purchasers in connection with the closing under the Purchase Agreement occurring today. Without our written consent: (i) no person (including any person that acquires any Notes from you) other than you may rely on this letter for any purpose; (ii) this letter may not be cited or quoted in any financial statement, prospectus, private placement memorandum or other similar document; (iii) this letter may not be cited or quoted in any other document or communication which might encourage reliance upon this letter by any person or for any purpose excluded by the restrictions in this paragraph; and (iv) copies of this letter may not be furnished to anyone for purposes of encouraging such reliance.
[ ]
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Sincerely,
Kirkland & Ellis LLP |
ANNEX D
[Form of Steven K. Covey, Esq. Opinion Attached]
[NAVISTAR LETTERHEAD]
***SUBJECT TO NAVISTAR REVIEW***
October [ ], 2013
J.P. Morgan Securities LLC
As Representative of the
several Initial Purchasers listed
in Schedule 1 to the Purchase Agreement (as defined below)
c/o J. P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Re: | Navistar International Corporation |
Ladies and Gentlemen:
I am issuing this letter in my capacity as Senior Vice President, General Counsel and Chief Ethics Officer of Navistar International Corporation, a Delaware corporation (the Company ), in response to the requirement in Section 6(g) of the Purchase Agreement, dated October [ ], 2013 (the Purchase Agreement ), among the Company and you, as representative of the several Initial Purchasers listed in Schedule 1 thereto (collectively, the Initial Purchasers ). Every term that is defined or given a special meaning in the Purchase Agreement and that is not given a different meaning in this letter has the same meaning whenever it is used in this letter as the meaning it is given in the Purchase Agreement.
In connection with the preparation of this letter, I (or one or more attorneys acting pursuant to my authority) have read:
(a) | the Preliminary Offering Memorandum, dated October [ ], 2013, covering the offer and sale of the Notes, as supplemented or amended by the Pricing Supplement, dated October [ ], 2013, containing the terms of the Notes (in each ease including all documents specifically incorporated by reference therein) (collectively, the Time of Sale Information ); |
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(b) | the Final Offering Memorandum, dated October [ ], 2013, covering the offer and sale of the Notes (in each ease including all documents specifically incorporated by reference therein) (the Offering Memorandum ); |
(c) | an executed copy of the Purchase Agreement; |
(d) | an executed copy of the Indenture; |
(e) | a specimen certificate of the Notes; |
(f) | certified copies of resolutions adopted by (i) the Companys board of directors on October 2, 2013; and (ii) the pricing committee of the Companys board of directors on October [7], 2013; |
(g) | a certificate, dated October [ ], 2013, from the Secretary of the State of Delaware as to the good standing of the Company, together with a facsimile bringdown thereof dated October [ ], 2013; |
(h) | copies of all certificates and other documents delivered today at the closing of the purchase and sale of the Notes under the Purchase Agreement; and |
(i) | such other documents, records and other instruments as we have deemed necessary or appropriate in order to deliver the opinions set forth herein. |
In addition, I (or one or more attorneys acting pursuant to my authority) have reviewed such other documents and have given consideration to such other matters of law and fact (in accordance with the principles set forth herein) as I (or one or more attorneys acting pursuant to my authority) have deemed appropriate, in my (or their) professional judgment, to express the opinions expressed herein under the laws specified below.
In such review and investigation, I (or one or more attorneys acting pursuant to my authority) have assumed with your permission and without independent investigation: (a) the genuineness of the signatures of persons signing all documents in connection with which this letter is rendered on behalf of the parties thereto other than the Company, (b) the authenticity of all documents submitted to me as originals, (c) the conformity to authentic original documents of all documents submitted to me as certified, conformed or photostatic copies, and (d) all public authority documents are accurate, complete and authentic and all official public records (including their indexing and filing) are accurate and complete. I (or one or more attorneys acting pursuant to my authority) have also assumed the due authorization, execution and delivery of the Purchase Agreement and every other agreement I (or one or more attorneys acting pursuant to my authority) have examined for purposes of this letter and the validity, binding effect and enforceability thereof by or on behalf of the parties thereto other than the Company. As to factual matters material to this letter, such facts have not been independently established or verified, I (or one or more attorneys acting pursuant to my authority) have relied upon originals (or copies certified or otherwise identified to my (or their) satisfaction) of such records, documents, certificates and other written information as in my (or their) judgment are necessary
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or appropriate to enable me to render the opinions expressed below. For purposes of numbered paragraphs 1 through 4, I (or one or more attorneys acting pursuant to my authority) have relied exclusively upon certificates issued by governmental authorities in the relevant jurisdictions and such advice is not intended to provide any conclusion or assurance beyond that conveyed by those certificates.
Subject to the assumptions, qualifications, exclusions and limitations which are identified in this letter, we advise you that:
1. | The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware. |
2. | Each Significant Subsidiary has been duly organized and is validly existing under the laws of its jurisdiction of organization. |
3. | The Company has been duly qualified as a foreign corporation for the transaction of business and is in good standing in each jurisdiction in which it owns or leases properties or conducts business, so as to require such qualification, except where the failure to be so qualified and in good standing would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. |
4. | Each Significant Subsidiary has been duly qualified as a foreign organization for the transaction of business and is in good standing in each jurisdiction in which it owns or leases properties, or conducts business, so as to require such qualification, except where the failure to be so qualified and in good standing would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. |
5. | The Company has the corporate power to own or lease its properties and to conduct its business as described in the Time of Sale Information and the Offering Memorandum. |
6. | Each of the Significant Subsidiaries has the organizational power to own or lease its properties and to conduct its business as described in the Time of Sale Information and the Offering Memorandum. |
7. | All of the issued and outstanding shares of capital stock of the Company have been duly authorized and are validly issued, fully paid and nonassessable. |
8. | All the outstanding shares of capital stock of each Significant Subsidiary have been duly authorized and validly issued and are fully paid and non-assessable, and are directly or indirectly owned by the Company, except as otherwise set forth in the Time of Sale Information and the Offering Memorandum, free and clear of any mortgage, pledge, security interest, lien, claim or other encumbrance or restriction on transferability or voting (other than as may be imposed by Securities Act of 1933, as amended (the Securities Act ) and the various state securities laws). |
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9. | The Companys authorized capital stock is as set forth under the heading Description of capital stock in the Preliminary Offering Memorandum. |
10. | The statements set forth under the heading Description of capital stock in the Preliminary Offering Memorandum, to the extent that such statements purport to summarize certain terms and provisions of the Companys capital stock, are correct in all material respects. |
11. | Except as described in the Time of Sale Information and the Offering Memorandum, there is no action, suit or proceeding before or by any government, governmental instrumentality, agency, body or court, domestic or foreign, now pending or, to the best of my knowledge after reasonable investigation, threatened against or affecting the Company or any of the Significant Subsidiaries that could reasonably be expected to have a material adverse effect on the consummation of the transactions contemplated in, or the fulfillment of the terms of, the Purchase Agreement, the Indenture, the Time of Sale Information and the Offering Memorandum; and no such actions, suits or proceedings are threatened or, to my knowledge, contemplated. |
12. | Except as described in the Time of Sale Information and the Offering Memorandum, there is no action, suit or proceeding before or by any government, governmental instrumentality, agency, body or court, now pending, or to the best of my knowledge after reasonable investigation, threatened against or affecting the Company or any Significant Subsidiary that would be required to be described by Item 103 of Regulation S-K under the Securities Act if the issuance of the Notes was being registered under the Securities Act, but is not so described in the Time of Sale Information and the Offering Memorandum. |
13. |
The execution and delivery by the Company of, and the performance by the Company of all of the provisions of its obligations under, the Purchase Agreement, the Indenture, the Notes and the consummation by the Company of the transactions contemplated therein and in the Time of Sale Information and the Offering Memorandum (including, without limitation, the issuance of the Notes and the issuance of shares of common stock upon conversion of the Notes), do not and will not conflict with, or result in a breach or violation of any of the terms or provisions of, or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, or give rise to any right to accelerate the maturity or require the prepayment of any indebtedness or the purchase of any capital stock under, or result in the creation or imposition of any lien, charge or encumbrance upon any material properties or assets of the Company or of any Significant Subsidiary under, (A) the Charter and Bylaws, (B) any material contract, indenture, mortgage, deed of trust, loan agreement, note, lease, partnership agreement or other agreement or instrument known to me after reasonable investigation to which the Company or any Significant Subsidiary is a party or by which any of them may be bound or to which any of their respective properties or assets may be subject, (C) any applicable law (other than the securities or Blue Sky laws of the various states of the United States of America) or (D) any judgment, order or decree of any government, governmental |
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instrumentality, agency, body or court, domestic or foreign, having jurisdiction over the Company or any Significant Subsidiary or any of their respective properties or assets known to me after reasonable investigation except, with respect to clauses (B), (C) and (D), any breach or violation that would not reasonably be expected to have a Material Adverse Effect. |
* * * * * * *
I have not undertaken any investigation to determine the facts or assumptions upon which the advice in this letter is based. I have not undertaken any investigation or search of court records for the purposes of this letter.
The preparation of the Time of Sale Information and the Offering Memorandum involved many determinations of a wholly or partially nonlegal character. I make no representation that I have independently verified the accuracy, completeness or fairness of the Time of Sale Information or the Offering Memorandum or that the actions taken in connection with the preparation of the Time of Sale Information and the Offering Memorandum were sufficient to cause the Time of Sale Information and the Offering Memorandum to be accurate, complete and fair. I am not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the Time of Sale Information and the Offering Memorandum.
Based on my review of the Time of Sale Information and the Offering Memorandum and conferences with officers and representatives of the Company, representatives of the independent public accountants for the Company, representatives of the Initial Purchasers and counsel for the Initial Purchasers during which disclosures in the Time of Sale Information and the Offering Memorandum and related matters were discussed, my understanding of applicable law and the experience I have gained in my practice, and relying as to materiality as to factual matters to a large extent upon the opinions and statements of officers of the Company, I can, however, advise you that nothing has come to my attention that has caused me to conclude that (1) the Time of Sale Information (other than the financial statements, supporting schedules and other financial data set forth therein, as to which no advice is given), as of the Time of Sale contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (2) the Offering Memorandum, at the date it bears or on the date of this letter, (other than the financial statements, supporting schedules and other financial data set forth therein, as to which no advice is given) contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
My opinions expressed herein are based exclusively on the internal laws of the State of Illinois, the General Corporation Law of the State of Delaware and the federal laws of the United States which, in my experience, are normally applicable to general business corporations which are not engaged in regulated business activities and to transactions of the type contemplated under the Purchase Agreement (but without my having made any investigation as to any other laws), and represents my opinion as to how that issue would be resolved were it to be considered
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by the highest court in the jurisdiction which enacted such law. I note that issues addressed by this letter may be governed in whole or in part by other laws, but I express no opinion as to whether any relevant difference exists between the laws upon which my advice is based or any other laws which may actually govern. The manner in which any particular issue would be treated in any actual court case would depend in part on facts and circumstances particular to the case and would also depend on how the court involved chose to exercise the wide discretionary authority generally available to it. This letter is not intended to guarantee the outcome of any legal dispute.
I express no opinion with respect to any laws, statutes, governmental rules or regulations or decisions which in my experience are not considered for or covered by opinions like those contained in this letter or are not generally applicable to transactions of the kind covered by the Purchase Agreement or covered by opinions typically delivered in connection with transactions of the kind covered by the Purchase Agreement or, except as otherwise stated in paragraph 12 hereof, to compliance with any disclosure requirement or any prohibition against fraud or misrepresentation. None of the opinions or other advice contained in this letter considers or covers and does not include: (i) any antifraud laws, rules or regulations, (ii) any foreign or state securities (or blue sky) laws, rules or regulations, (iii) laws, rules or regulations with respect to any financial statements or supporting schedules (or any notes to any such statements or schedules) or other financial or accounting information, or statistical information derived from the financial statements or supporting schedules, set forth in (or omitted from) the Time of Sale Information or the Offering Memorandum, (iv) any laws, rules or regulations of the Financial Industry Regulatory Authority, Inc. relating to the compensation of underwriters; or (v) any laws, statutes, governmental rules or regulations or decisions which in my experience are not usually considered for or covered by opinions like those contained in this letter or are not generally applicable to transactions of the kind covered by the Purchase Agreement including any regulatory laws or requirements specific to the industry in which you or the Company is engaged. In addition, none of the opinions or other advice contained in this letter covers or otherwise addresses any of the following types of provisions which may be contained in the Purchase Agreement or the Indenture: (i) provisions mandating contribution towards judgments or settlements among various parties; (ii) waivers of benefits and rights to the extent they cannot be waived under applicable law; (iii) provisions providing for liquidated damages, additional interest and redemption premiums, in each case if deemed to constitute penalties; (iv) provisions which might require indemnification or contribution in violation of general principles of equity or public policy, including, without limitation, indemnification or contribution obligations which arise out of the failure to comply with applicable state or federal securities laws; or (v) requirements in the Purchase Agreement or Indenture specifying that provisions thereof may only be waived in writing (these provisions may not be valid, binding or enforceable to the extent that an oral agreement or an implied agreement by trade practice or course of conduct has been created modifying any provision of such documents). I express no opinion as to what law might be applied by any courts to resolve any issue addressed by my opinion and I express no opinion as to whether any relevant difference exists between the laws upon which my opinions are based and any other laws which may actually be applied to resolve issues which may arise. The manner in which any particular issue would be treated in any actual court case would depend in part on facts and circumstances particular to the case and would also depend on how the court involved chose to exercise the wide discretionary authority generally available to it.
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My opinions expressed herein are limited to the specific issues addressed herein and are limited in all respects to documents, laws and facts existing on the date hereof. By rendering my opinions, I do not undertake to advise you of any changes in such documents, laws or facts which may occur after the date hereof.
This letter speaks as of the time of its delivery on the date it bears. I do not assume any obligation to provide you with any subsequent opinion or advice by reason of any fact about which I did not have knowledge at that time, by reason of any change subsequent to that time in any law or other governmental requirement or interpretation thereof covered by any of our opinions or advice, or for any other reason.
This letter is being furnished to you and the several Initial Purchasers solely in their capacity as initial purchasers in connection with the sale of the Notes to the Initial Purchasers pursuant to the Purchase Agreement and may only be relied upon by the Initial Purchasers in their capacity as initial purchasers. Without my written consent: (i) no person (including any person that acquires any Notes from the Initial Purchasers) other than the Initial Purchasers may rely on this letter for any purpose; (ii) this letter may not be cited or quoted in any financial statement, offering memorandum, prospectus, private placement memorandum or other similar document; (iii) this letter may not be cited or quoted in any other document or communication which might encourage reliance upon this letter by any person or for any purpose excluded by the restrictions in this paragraph; and (iv) copies of this letter may not be furnished to anyone for purposes of encouraging such reliance.
Sincerely,
Steven K. Covey Senior Vice President, General Counsel and Chief Ethics Officer Navistar International Corporation |
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
October 7, 2013
J.P. Morgan Securities LLC
As Representative of the
several Initial Purchasers listed
in Schedule 1 to the Purchase
Agreement referred to below
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Re: | Navistar International Corporation |
Ladies and Gentlemen:
The undersigned understands that you, as Representative of the several Initial Purchasers, propose to enter into a Purchase Agreement (the Purchase Agreement ) with Navistar International Corporation, a Delaware corporation (the Company ), providing for the purchase and resale (the Placement ) by the several Initial Purchasers named in Schedule 1 to the Purchase Agreement (the Initial Purchasers ), of Senior Subordinated Convertible Notes of the Company (the Securities ). Upon the satisfaction of certain conditions, the Securities are convertible, at the option of the holders, at a conversion rate set forth and as described in the Time of Sale Information and the Offering Memorandum, and upon any such conversion the Company may elect to satisfy its conversion obligation through the delivery of shares of Common Stock, par value $.10 per share, of the Company (the Common Stock ), cash or a combination of cash and shares of Common Stock. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Purchase Agreement.
In consideration of the Initial Purchasers agreement to participate in the Placement of the Securities, and for other good and valuable consideration receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of the Representative on behalf of the Initial Purchasers, the undersigned will not, during the period ending 90 days after the date of the final offering memorandum relating to the Placement (the Offering Memorandum ), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock, or any securities convertible into or exercisable or exchangeable for Common Stock, or publicly disclose the intention to make any such offer, sale, pledge or disposition, (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of Common Stock or such other securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise or (3) make any demand for or exercise any right with respect to the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock, in each case other than (A) transfers of shares of Common Stock as a bona fide gift or gifts and (B) distributions of shares of Common Stock to members or stockholders of the undersigned; provided that in the case of any transfer or distribution pursuant to clause (A) or (B), each donee or distributee shall execute and deliver to the Representative a lock-up letter in the form of this paragraph; and provided , further , that in the case of any transfer or distribution pursuant to clause (A) or (B), no filing by any party (donor, donee, transferor or transferee) under the Securities Exchange Act of 1934, as amended, or other public announcement shall be required or shall be made voluntarily in connection with such transfer or distribution (other than a filing on a Form 5 made after the expiration of the 90-day period referred to above).
Nothing contained herein shall apply to or otherwise restrict any transfer or deemed transfer of shares of Common Stock or options to acquire Common Stock to the Company in connection with the exercise of options to acquire Common Stock, including, without limitation, the payment of the exercise price of such options to acquire Common Stock, or to otherwise satisfy tax withholding obligations in connection with the vesting of Common Stock subject to transfer restrictions or in connection with the exercise of stock options to acquire shares of Common Stock.
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described herein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this agreement (this Letter Agreement ).
The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Letter Agreement. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.
The undersigned understands that, if the Purchase Agreement does not become effective prior to October 14, 2013, or if the Purchase Agreement (other than the provisions thereof that survive termination) shall terminate or be terminated prior to payment for and delivery of the Securities to be sold thereunder, the undersigned shall be released from all obligations under this Letter Agreement. The undersigned understands that the Initial Purchasers are entering into the Purchase Agreement and proceeding with the Placement in reliance upon this Letter Agreement.
This Letter Agreement and any claim, controversy or dispute arising under or related to this Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof.
[ Signature page follows .]
2
Very truly yours, | ||
[ NAME OF STOCKHOLDER, DIRECTOR OR OFFICER ] | ||
By: |
|
|
Name: | ||
Title: |
[ Signature Page to the Look-Up Agreement ]
Exhibit 99.1
|
Navistar International Corporation P : 331-332-5000 2701 Navistar Dr. Lisle, IL 60532 USA |
Media Contact: | Steve Schrier, 331-332-2264 | |||
Investor Contact: Web site: |
Heather Kos, 331-332-2406 www.Navistar.com/newsroom |
NAVISTAR ANNOUNCES PRICING OF PRIVATE OFFERING OF CONVERTIBLE NOTES
LISLE, Ill., October 7, 2013 Navistar International Corporation (NYSE: NAV) today announced the pricing of its private offering of $200 million of 4.50% senior subordinated convertible notes due 2018. Closing of the offering is expected to occur on October 11, 2013 subject to customary closing conditions. In addition, the company has granted the initial purchasers an over-allotment option to purchase an additional $30 million of convertible notes.
The convertible notes will pay interest semiannually at a rate of 4.50% per annum and will be convertible, under certain circumstances, into cash, shares of Navistar common stock, or a combination of cash and shares of Navistar common stock, at Navistars election, at an initial conversion rate of 17.1233 shares of Navistar common stock per $1,000 principal amount of senior subordinated convertible notes, which is equivalent to an initial conversion price of approximately $58.40 per share of common stock, subject to adjustment in certain circumstances.
The convertible notes and the shares of the companys common stock issuable upon conversion of the notes, if any, have not been, and will not be, registered under the United States Securities Act of 1933, as amended (Securities Act) or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
The company only plans to offer the convertible notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act.
This press release is for informational purposes only and shall not constitute an offer to sell, or the solicitation of an offer to buy, these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offer of the convertible notes will be made only by means of a private offering memorandum.
About Navistar
Navistar International Corporation (NYSE: NAV) is a holding company whose subsidiaries and affiliates produce International ® brand commercial and military trucks, MaxxForce ® brand diesel engines, IC Bus brand school and commercial buses. The company also provides truck and diesel engine service parts. Another affiliate offers financing services.
Cautionary Statement Concerning Forward-Looking Statement s
Information provided and statements contained in this release that are not purely historical fact are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, including those regarding the proposed offering of the securities and the anticipated use of proceeds therefrom. Such forward-looking statements only speak as of the date of this report and the company assumes no obligation to update the information included in this release. Such forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of the companys business strategy. These statements often include words such as believe, expect, anticipate, intend, plan, estimate, or similar expressions. These statements are not guarantees of performance or results and they involve risks, uncertainties, and assumptions. For a further description of these factors, see the risk factors set forth in the companys filings with the Securities and Exchange Commission, including the companys annual report on Form 10-K for the fiscal year ended October 31, 2012 and quarterly reports for fiscal 2013. Although the company believes that these forward-looking statements are based on reasonable assumptions, there are many factors that could affect actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. All future written and oral forward-looking statements by the company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Except for its ongoing obligations to disclose material information as required by the federal securities laws, the company does not have any obligations or intention to release publicly any revisions to any forward-looking statements to reflect events or circumstances in the future or to reflect the occurrence of unanticipated events.