UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 27, 2018
Blackstone Mortgage Trust, Inc.
(Exact name of registrant as specified in its charter)
Maryland | 1-14788 | 94-6181186 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
345 Park Avenue, 42nd Floor
New York, New York 10154
(Address of Principal Executive Offices) (Zip Code)
Registrants telephone number, including area code: (212) 655-0220
Not Applicable
(Former Name or 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)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 | Entry into a Material Definitive Agreement. |
On March 27, 2018, Blackstone Mortgage Trust, Inc. (the Company) completed its registered underwritten public offering of $220.0 million aggregate principal amount of its 4.75% Convertible Senior Notes due 2023 (the Notes) pursuant to an underwriting agreement, dated March 22, 2018, among the Company, BXMT Advisors L.L.C. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several underwriters named in Schedule II thereto (the Underwriters). Pursuant to the terms of the underwriting agreement, the Company also granted the Underwriters a 30-day option to purchase up to an additional $33.0 million aggregate principal amount of the Notes solely to cover overallotments, if any. The Notes were sold pursuant to the Companys effective shelf registration statement on Form S-3ASR (File No. 333-212769) filed on July 29, 2016 and the related prospectus dated July 29, 2016, as supplemented by a prospectus supplement dated March 22, 2018.
Indenture and Notes
The Notes are governed by the Indenture, dated as of November 25, 2013 (the Base Indenture) between the Company and The Bank of New York Mellon Trust Company N.A., as trustee (the Trustee), as supplemented by the third supplemental indenture, dated as of March 27, 2018, between the Company and the Trustee (the Supplemental Indenture and, together with the Base Indenture, the Indenture).
The Notes pay interest semi-annually in arrears on March 15 and September 15, commencing on September 15, 2018, at a rate of 4.75% per year, and mature on March 15, 2023, unless earlier converted or purchased by the Company.
The Notes are the Companys senior unsecured obligations that rank senior in right of payment to any of the Companys future indebtedness that is expressly subordinated in right of payment to the Notes, equal in right of payment to the Companys existing and future unsecured indebtedness that is not so subordinated, including the Companys 5.25% Convertible Senior Notes due 2018 and the Companys 4.375% Convertible Senior Notes due 2022, effectively junior in right of payment to any of the Companys existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally subordinated to all existing and future indebtedness (including trade payables) and preferred equity of the Companys subsidiaries as well as to any of the Companys existing or future indebtedness that may be guaranteed by any of its subsidiaries (to the extent of any such guarantee).
At any time prior to 5:00 p.m., New York City time, on the business day immediately preceding December 15, 2022, the Notes will be convertible at the option of the holder only upon the specified events and during the specified periods set forth in the following paragraph. Thereafter, the Notes will be convertible at the option of the holder at any time until 5:00 p.m., New York City time, on the second scheduled trading day immediately preceding the maturity date. The Notes will initially be convertible at a conversion rate of 27.6052 shares of the Companys class A common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $36.23 per share of class A common stock. The conversion rate is subject to adjustment upon certain events. Upon conversion, the Companys conversion obligation will be satisfied in cash, shares of class A common stock or a combination thereof (subject to the Companys right to deliver cash in lieu of all or a portion of such shares, based upon a Daily Conversion Value (as defined in the Indenture) calculated for each VWAP Trading Day (as defined in the Indenture) in the applicable 25 VWAP Trading Day Observation Period (as defined in the Indenture)).
Prior to 5:00 p.m., New York City time, on the business day immediately preceding December 15, 2022, the Notes will be convertible at the option of the holder only under the following circumstances:
(i) during any calendar quarter commencing after June 30, 2018 (and only during such calendar quarter), if the last reported sale price of the Companys class A 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 calendar quarter is greater than or equal to 110% of the applicable conversion price on each applicable trading day;
(ii) during the five consecutive business day period after any five consecutive trading day period, or the measurement period, in which the Trading Price (as defined in the Indenture) per $1,000 principal amount of notes for each trading day of such measurement period was less than 98% of the product of the last reported sale price of the Companys class A common stock and the applicable conversion rate on each such trading day; or
(iii) upon the occurrence of specified corporate events.
Upon a Fundamental Change (as defined in the Indenture), holders may require the Company to purchase the Notes in whole or in part for cash at a price equal to 100% of the principal amount of the Notes to be purchased, plus any accrued and unpaid interest to, but not including, the fundamental change purchase date. In addition, upon a Make-Whole Fundamental Change (as defined in the Indenture), the Company will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its Notes in connection with such Make-Whole Fundamental Change.
The Indenture provides that the following are events of default under the Indenture: (a) failure to pay the principal of any Note (including the fundamental change purchase price) when due and payable on the maturity date, upon required repurchase, upon declaration of acceleration or otherwise; (b) failure to pay interest when due and such failure continues for 30 days; (c) failure to observe or perform any other covenant contained in the Notes or the Indenture and such failure continues for 60 days after the Company receives written notice from the Trustee or holders of at least 25% of the aggregate principal amount of the Notes; (d) failure by the Company to comply with its obligation to convert the Notes into the amount of cash or the combination of cash and shares of class A common stock, if any, in accordance with the Indenture upon exercise of a holders conversion right and that failure continues for five business days; (e) failure by the Company to comply with its obligations regarding a consolidation, merger or sale; (f) failure by the Company to issue certain notices when due; (g) failure by the Company to pay beyond any applicable grace period, or the acceleration of indebtedness of the Company or any of its subsidiaries in an aggregate amount greater than $50.0 million (or its foreign currency equivalent at the time); and (h) certain events of bankruptcy, insolvency or reorganization involving the Company.
If certain bankruptcy and insolvency-related events of defaults with respect to the Company occur, the principal of, and accrued and unpaid interest on, all of the then outstanding Notes will automatically become due and payable. If an event of default other than certain bankruptcy and insolvency-related events of defaults with respect to the Company occurs and is continuing, the Trustee by notice to the Company or the holders of the Notes of at least 25% in principal amount of the outstanding Notes by notice to the Company and the Trustee, may declare the principal of, and accrued and unpaid interest on, all of the then outstanding Notes to be due and payable. Notwithstanding the foregoing, the Indenture provides that, to the extent the Company elects, the sole remedy for an event of default relating to certain failures by the Company to comply with reporting covenants in the Indenture consists exclusively of the right to receive additional interest on the Notes.
The foregoing summary description of the material terms of the Base Indenture and the Supplemental Indenture is qualified in its entirety by reference to the Base Indenture, a copy of which has been filed as Exhibit 4.1 to the Companys Current Report on Form 8-K (File No. 001-14788) filed with the Securities and Exchange Commission (the Commission) on November 25, 2013, and the Supplemental Indenture, a copy of which is attached hereto as Exhibit 4.2 (which includes the form of 4.75% Convertible Senior Notes due 2023 filed as Exhibit 4.3), each of which is 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 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BLACKSTONE MORTGAGE TRUST, INC. | ||||||
Date: March 27, 2018 | ||||||
By: | /s/ Leon Volchyok | |||||
Name: | Leon Volchyok | |||||
Title: | Head of Legal and Compliance and Secretary |
Exhibit 1.1
Blackstone Mortgage Trust, Inc.
$220,000,000
4.75% Convertible Senior Notes due 2023
Underwriting Agreement
New York, New York
March 22, 2018
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
As Representative
of the several Underwriters
named in Schedule II hereto
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
One Bryant Park
New York, New York 10036
Ladies and Gentlemen:
Blackstone Mortgage Trust, Inc., a corporation organized under the laws of the State of Maryland (the Company ), proposes to sell to the several underwriters named in Schedule II hereto (the Underwriters ), for whom you (the Representative ) are acting as representative, $220,000,000 principal amount of its 4.75% Convertible Senior Notes due 2023 (the Underwritten Securities ), convertible into cash, shares of the Companys class A common stock, par value $0.01 per share (the Common Stock ), or a combination of cash and shares of Common Stock at the Companys election (any such shares issuable upon conversion, including the maximum number of shares that may be added to the conversion rate in connection with a make-whole fundamental change, the Underlying Shares ). The Company also proposes to grant to the Underwriters an option to purchase up to an additional $33,000,000 aggregate principal amount of its 4.75% Convertible Senior Notes due 2023 (the Option Securities and, together with the Underwritten Securities, the Securities ) solely to cover over-allotments, if any. The Securities are to be issued under an indenture (the Base Indenture ), dated as of November 25, 2013, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the Trustee ), as supplemented by the Third Supplemental Indenture, to be dated March 27, 2018, between the Company and the Trustee (the Third Supplemental Indenture and together with the Base Indenture, the Indenture ).
Any reference herein to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the Final Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or before the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus or the Final Prospectus, as the case may be; and any reference herein to the terms amend, amendment or supplement with respect to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the Final Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the Effective Date of the Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus or the Final Prospectus, as the case may be, deemed to be incorporated therein by reference. Certain terms used herein are defined in Section 20 hereof.
1. Representations and Warranties.
(i) The Company represents and warrants to each Underwriter and agrees with each Underwriter as set forth below in this Section 1(i).
(a) The Company meets the requirements for use of Form S-3 under the Act and has prepared and filed with the Commission an automatic shelf registration statement, as defined in Rule 405, on Form S-3 (File No. 333-212769), including a related Base Prospectus, for registration under the Act of the offering and sale of the Securities and the Underlying Shares. Such Registration Statement, including any amendments thereto filed prior to the Execution Time, became effective upon filing. The Company may have filed with the Commission, as part of an amendment to the Registration Statement or pursuant to Rule 424(b), one or more Preliminary Prospectuses relating to the Securities, each of which has previously been furnished to you. The Company will file with the Commission a Final Prospectus relating to the Securities in accordance with Rule 424(b). As filed, such Final Prospectus shall contain all information required by the Act and, except to the extent the Representative shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the Base Prospectus and any Preliminary Prospectus) as the Company has advised you, prior to the Execution Time, will be included or made therein. The Registration Statement, at the Execution Time, meets the requirements set forth in Rule 415(a)(1)(x). The initial Effective Date of the Registration Statement was not earlier than the date three years before the Execution Time.
(b) On each Effective Date, the Registration Statement did, and when the Final Prospectus is first filed in accordance with Rule 424(b) and on the Closing Date (as defined herein) and on any date on which Option Securities are purchased, if such date is not the Closing Date (a settlement date ), the Final Prospectus (and any supplements thereto) will, comply in all material respects with the applicable requirements of the Act, the Exchange Act and the Trust Indenture Act; on each Effective Date and at the Execution Time, the Registration Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; and on the date of any filing pursuant to Rule 424(b) and on the Closing Date and any settlement date, the
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Final Prospectus (together with any supplements thereto) will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the Company makes no representations or warranties as to the information contained in or omitted from the Registration Statement or the Final Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representative specifically for inclusion in the Registration Statement or the Final Prospectus (or any supplement thereto), it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in Section 8(b) hereof. No stop order suspending the effectiveness of the Registration Statement or any part thereof has been issued and, to the knowledge of the Company, no proceeding for that purpose has been instituted or threatened by the Commission or by the state securities authority of any jurisdiction. No order preventing or suspending the use of the Final Prospectus has been issued and, to the knowledge of the Company, no proceeding for that purpose has been instituted by the Commission or by the state securities authority of any jurisdiction.
(c) (i) The Disclosure Package and (ii) each electronic road show when taken together as a whole with the Disclosure Package, as of the Execution Time, does not contain 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. The preceding sentence does not apply to statements in or omissions from the Disclosure Package based upon and in conformity with written information furnished to the Company by any Underwriter through the Representative specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in Section 8(b) hereof.
(d) (i) At the time of filing the Registration Statement, (ii) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Sections 13 or 15(d) of the Exchange Act or form of prospectus) and (iii) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c)) made any offer relating to the Securities in reliance on the exemption in Rule 163, the Company was or is (as the case may be) a well-known seasoned issuer as defined in Rule 405. The Company agrees to pay the fees required by the Commission relating to the Securities within the time required by Rule 456(b)(1) without regard to the proviso therein and otherwise in accordance with Rules 456(b) and 457(r).
(e) (i) At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2)) of the Act and (ii) as of the Execution Time (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is not an Ineligible Issuer (as defined in Rule 405), without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an Ineligible Issuer.
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(f) Each Issuer Free Writing Prospectus and the final term sheet prepared and filed pursuant to Section 5(i)(b) hereto does not include any information that conflicts with the information contained in the Registration Statement, the Final Prospectus, and any preliminary or other prospectus deemed to be a part thereof that has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by any Underwriter through the Representative specifically for use therein, it being understood and agreed that the only such information furnished by or on behalf of any Underwriter consists of the information described as such in Section 8(b) hereof.
(g) The copies of each Preliminary Prospectus, each Issuer Free Writing Prospectus that is required to be filed with the Commission pursuant to Rule 433 and the Final Prospectus and any amendments or supplements to any of the foregoing, that have been delivered to the Underwriters in connection with the offering of the Securities (whether to meet the request of purchasers pursuant to Rule 173(d) or otherwise) were identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. For purposes of this Underwriting Agreement (the Agreement ), references to the delivery or furnishing of any of the foregoing documents to the Underwriters, and any similar terms, include, without limitation, electronic delivery.
(h) All documents filed by the Company pursuant to Sections 12, 13, 14 or 15 of the Exchange Act and incorporated or deemed to be incorporated by reference into the Registration Statement, any Preliminary Prospectus, the Disclosure Package or the Final Prospectus, when they became effective or were filed with the Commission, as the case may be, complied in all material respects with the requirements of the Act or the Exchange Act, as applicable, and were filed on a timely basis with the Commission, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(i) The Company (i) has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland, (ii) has full corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Registration Statement, the Disclosure Package and the Final Prospectus, and to enter into and perform its obligations under this Agreement, and (iii) is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction which requires such qualification, except in the case of clauses (ii) and (iii), where the failure to have such power and authority or to be so qualified or in good standing would not reasonably be expected to have a material adverse effect on the condition (financial or otherwise), business prospects, earnings, business or properties of the Company and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business (a Material Adverse Effect ).
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(j) Each subsidiary of the Company (i) has been duly formed and is validly existing as a corporation, limited liability company or limited partnership, as the case may be, in good standing under the laws of the jurisdiction in which it is chartered or organized, (ii) has full corporate, limited liability company or limited partnership, as applicable, power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Registration Statement, the Disclosure Package and the Final Prospectus, and (iii) is duly qualified to do business as a foreign corporation, limited liability company or limited partnership, as the case may be, and is in good standing under the laws of each jurisdiction which requires such qualification, except where the failure to have such power and authority or to be so qualified or in good standing would not reasonably be expected to have a Material Adverse Effect.
(k) All the outstanding shares of capital stock or other ownership interests of each subsidiary of the Company have been duly and validly authorized and issued and are fully paid and non-assessable, and, except as otherwise set forth in or contemplated in the Registration Statement, Disclosure Package and the Final Prospectus, all outstanding shares of capital stock or other ownership interests of the Companys subsidiaries are owned by the Company either directly or through wholly owned subsidiaries free and clear of any perfected security interest or any other security interests, claims, mortgages, pledges, liens, encumbrances or other restrictions of any kind (collectively, Liens ). Except as set forth in the Registration Statement, Disclosure Package and the Final Prospectus, there are no outstanding options, warrants or other rights to purchase or agreements to issue, or rights to convert any obligations into or exchange any securities or interests for capital stock or other ownership interests of any subsidiary of the Company.
(l) The Companys authorized equity capitalization is as set forth in the Registration Statement, the Disclosure Package and the Final Prospectus; the capital stock of the Company conforms in all material respects to the description thereof contained in the Registration Statement, the Disclosure Package and the Final Prospectus; the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; the Underlying Shares have been duly and validly authorized and reserved for issuance and, when issued and delivered in accordance with the provisions of the Securities and the Indenture, will be duly and validly issued, fully paid and non-assessable and will conform in all material respects to the description thereof contained in the Disclosure Package and the Final Prospectus under the caption Description of Capital Stock; the Underlying Shares are duly listed, and admitted and authorized for trading, subject to official notice of issuance, on the New York Stock Exchange ( NYSE ); the holders of outstanding shares of capital stock of the Company are not entitled to preemptive or other rights to subscribe for the Securities; except as set forth in the Registration Statement, Disclosure Package and the Final Prospectus, no options, warrants or other rights to purchase, agreements or other
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obligations to issue, or rights to convert any obligations into or exchange any securities for, shares of capital stock of or ownership interests in the Company are outstanding. No holder of the Securities will be subject to personal liability for obligations of the Company solely by reason of being such a holder. The Company does not have any outstanding debt or preferred equity securities that are rated by any nationally recognized statistical rating organization (as defined for purposes of Section 3(a)(62) of the Exchange Act).
(m) There is no franchise, contract or other document of a character required to be described in the Registration Statement, the Disclosure Package or the Final Prospectus, or to be filed as an exhibit to the Registration Statement, which is not described or filed as required; and the statements included or incorporated by reference in the Disclosure Package and the Final Prospectus under the headings Summary, Risk Factors, Description of Capital Stock, Description of the Notes, and Material United States Federal Income Tax Considerations, and the statements in the Registration Statement under Item 15, insofar, in all cases, as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are true and correct summaries of such legal matters, agreements, documents or proceedings in all material respects.
(n) This Agreement has been duly authorized, executed and delivered by the Company.
(o) The Securities have been duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth herein, will be validly issued and legally binding obligations of the Company enforceable against the Company and entitled to the benefits of the Indenture, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors rights and to general equity principles; the Indenture has been duly authorized and, when executed and delivered by the Company and the Trustee, will constitute a valid and legally binding instrument, enforceable against the Company in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors rights and to general equity principles; the Indenture has been qualified under the Trust Indenture Act; the Indenture and the Securities conform in all material respects to the statements relating thereto contained in the Registration Statement, the Disclosure Package and the Final Prospectus and the description of the Securities conforms to the rights set forth in the instruments defining the same; no holder of the Securities will be subject to personal liability by reason of being such a holder; and the issuance of the Securities is not subject to any statutory or contractual preemptive rights, resale rights, rights of first refusal or other similar rights of any securityholder of the Company.
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(p) Each of the Second Amended and Restated Management Agreement, dated as of October 23, 2014, as amended (the Management Agreement ), between the Company and BXMT Advisors L.L.C., a Delaware limited liability company (the Manager ), and the Amended and Restated Trademark License Agreement, dated as of December 21, 2017, between the Company and Blackstone TM L.L.C., an affiliate of The Blackstone Group L.P., pursuant to which, among other things, Blackstone TM L.L.C. granted to the Company a non-exclusive, royalty free license to use the names Blackstone and BXMT (the License Agreement and, together with this Agreement and the Management Agreement, the Transaction Agreements ), constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except to the extent limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws relating to or affecting creditors rights and remedies generally, and subject, as to enforceability, to general principles of equity and, with respect to equitable relief, the discretion of the court before which any proceeding therefor may be brought (regardless of whether enforcement is sought in a proceeding at law or in equity).
(q) The Company is not and, solely after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Registration Statement, Disclosure Package and the Final Prospectus, will not be, subject to registration and regulation as an investment company as defined in the Investment Company Act of 1940, as amended.
(r) No consent, approval, authorization, filing with, registration, or order of any court or governmental agency or body is necessary or required for the performance by the Company of its obligations under this Agreement or the Indenture (including the issuance and sale of the Securities and the Underlying Shares), in connection with the offering, issuance or sale of the Securities hereunder or the consummation of the transactions contemplated by this Agreement or the Indenture, except such as have been already obtained or may be required under the Act and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters in the manner contemplated herein and in the Disclosure Package and the Final Prospectus.
(s) The execution, delivery and performance of this Agreement and the Indenture by the Company (including the issuance and sale of the Securities and the Underlying Shares), the performance of the Transaction Agreements by the Company, the consummation of the transactions contemplated herein and therein and in the Disclosure Package and the Final Prospectus and the compliance by the Company with its obligations hereunder and thereunder does not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach or violation of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, (i) the charter or bylaws or similar organizational documents of the Company or the organizational or other governing documents of any of its subsidiaries, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Company or any of its subsidiaries is a
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party or bound or to which its or their property is subject, except as would not reasonably be expected to have a Material Adverse Effect and would not reasonably be expected to have a material adverse effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby, or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the Company or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or any of its subsidiaries or any of its or their properties, except as would not reasonably be expected to have a Material Adverse Effect and would not reasonably be expected to have a material adverse effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby. As used herein, a Repayment Event means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holders behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries.
(t) Except as set forth in the Registration Statement, the Disclosure Package and the Final Prospectus and which have been waived, no holders of securities of the Company have rights to the registration of such securities under the Registration Statement or under the Act.
(u) The consolidated historical financial statements and schedules, including the notes thereto, of the Company and its consolidated subsidiaries, filed with the Commission as part of or incorporated by reference in the Registration Statement, and included or incorporated by reference in the Disclosure Package and the Final Prospectus, present fairly, in all material respects, the financial condition, results of operations and cash flows of the Company and its consolidated subsidiaries as of the dates and for the periods indicated, comply as to form, in all material respects, with the applicable accounting requirements of the Act and the Exchange Act and have been prepared in conformity with U.S. generally accepted accounting principles ( GAAP ) applied on a consistent basis throughout the periods involved (except as otherwise noted therein). The selected financial data set forth under the caption Selected Financial Data incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus fairly present in all material respects, on the basis stated therein, the information included therein. All non-GAAP financial information incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus complies with the requirements of Regulation G and Item 10 of Regulation S-K under the Act in all material respects. Except as disclosed in the Registration Statement, the Disclosure Package and the Final Prospectus, there are no material off-balance sheet arrangements (as defined in Regulation S-K under the Act, Item 303(a)(4)(ii)) or any other relationships with unconsolidated entities or other persons, that may have a material current or, to the Companys knowledge, material future effect on the Companys consolidated financial condition, results of operations, liquidity, capital expenditures, capital resources or significant components of revenue or expenses. No other financial statements or schedules are required to be included or incorporated by reference in the Registration Statement, the Disclosure Package or the Final Prospectus. The interactive data in
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eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus fairly presents the information called for in all material respects and has been prepared in accordance with the Commissions rules and guidelines applicable thereto.
(v) No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries or its or their property is pending or, to the knowledge of the Company, threatened, against the Company or any subsidiary that (i) could reasonably be expected to have a material adverse effect on the performance of this Agreement or the Indenture or the consummation of any of the transactions contemplated hereby and thereby or (ii) could reasonably be expected to have a Material Adverse Effect, except as set forth in or contemplated in the Registration Statement, the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto).
(w) The Company and its subsidiaries have good and marketable title to all real property owned by any of them and good and marketable title to all other properties owned by any of them, in each case, free and clear of all Liens except such as (a) are set forth in or contemplated in the Registration Statement, the Disclosure Package or the Final Prospectus or (b) would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; all real property, buildings and other improvements, and all equipment and other property held under lease or sublease by the Company or any of its subsidiaries is held by them under valid, subsisting and enforceable leases or subleases, as the case may be, except such as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and all such leases and subleases are in full force and effect in all material respects; and neither the Company nor any of its subsidiaries has any notice of any claim of any sort that has been asserted by anyone adverse to the rights of the Company or any of its subsidiaries under any of the leases or subleases mentioned above or affecting or questioning the rights of the Company or any of its subsidiaries to the continued possession of the leased or subleased premises under any such lease or sublease except for such claims which, if successfully asserted against the Company or any of its subsidiaries, would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The Company and its subsidiaries have good and marketable title to the portfolio of commercial real estate loans described in the Registration Statement, the Disclosure Package and the Final Prospectus, except for those commercial real estate loans that have nominally been transferred to a lender/buyer counterparty pursuant to a master repurchase agreement, in respect of which the Company has a binding and enforceable right to repurchase such loans from such lender/buyer counterparty, subject to and in accordance with the terms of that repurchase agreement.
(x) The Company and its subsidiaries own, possess, license or have other rights to use all patents, patent applications, trademarks and service marks, trademark and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets, technology, know-how and other intellectual property (collectively, the Intellectual
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Property ) reasonably necessary for the conduct of their respective businesses as now conducted or as proposed in the Registration Statement, the Disclosure Package and the Final Prospectus to be conducted, except where the failure to own, possess, license or have other rights to use such Intellectual Property would not reasonably be expected to have a Material Adverse Effect. Except as set forth in or contemplated in the Registration Statement, the Disclosure Package and the Final Prospectus, and as would not reasonably be expected to have a Material Adverse Effect, (i) to the Companys knowledge, the conduct of its business and the businesses of its subsidiaries does not infringe the rights of any third parties, (ii) to the Companys knowledge, there is no infringement by third parties of any such Intellectual Property, (iii) there is no pending, or, to the Companys knowledge, threatened action, suit, proceeding or claim by others challenging the Companys rights in or to any such Intellectual Property, and the Company is unaware of any reasonable basis for any such claim and (iv) there is no pending or, to the Companys knowledge, threatened action, suit, proceeding or claim by others that the Company infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others, and the Company is unaware of any reasonable basis for any such claim.
(y) Neither the Company nor any of its subsidiaries is in violation or default of (i) any provision of its charter, bylaws or other organizational or governing documents, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or such subsidiary or any of its properties, as applicable, except under subsections (ii) or (iii) for any violation or default which would not reasonably be expected to have a Material Adverse Effect.
(z) Deloitte and Touche LLP, who have certified the financial statements and supporting schedules of the Company and its consolidated subsidiaries included or incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus, and delivered their reports with respect to such audited consolidated financial statements and schedules included or incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus, are independent public accountants with respect to the Company within the meaning of the Act.
(aa) The Company and each of its subsidiaries has filed all foreign, federal, state and local tax returns that are required to be filed or has requested extensions thereof (except in any case in which the failure so to file would not reasonably be expected to have a Material Adverse Effect and except as set forth in or contemplated in the Registration Statement, the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto)) and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such tax, assessment, fine or penalty that is currently being contested in good faith or as would not reasonably be expected to have a Material Adverse Effect, except as set forth in or contemplated in the Registration Statement, the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto).
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(bb) Neither the Company nor, to the knowledge of the Company, any employer of any officers, investment professionals or other key persons of the Company named in the Registration Statement, the Disclosure Package and the Final Prospectus (each, a Company-Focused Professional ) has been notified that any such Company-Focused Professional plans to terminate his or her employment or association with his or her employer. Neither the Company nor, to the Companys knowledge, any Company-Focused Professional is subject to any non-competition, non-disclosure, confidentiality, employment, consulting or similar agreement that would be violated by the business activities of the Company as described in the Registration Statement, the Disclosure Package and the Final Prospectus. The Company does not have any employees. No subsidiary of the Company has any employees.
(cc) The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; there are no material claims by the Company or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; neither the Company nor any such subsidiary has been refused any insurance coverage sought or applied for; and neither the Company nor any such subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect, except as set forth in or contemplated in the Registration Statement, the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto).
(dd) Neither the Company nor any of its subsidiaries is a party to or otherwise bound by any instrument or agreements that limits or prohibits (whether with or without the giving of notice or the passage of time or both), directly or indirectly, the Company from paying any dividends or making other distributions on its capital stock, and no subsidiary of the Company is a party to or otherwise bound by any instrument or agreements that limits or prohibits (whether with or without the giving of notice or the passage of time or both), directly or indirectly, any subsidiary of the Company from paying any dividends or making other distributions on its capital stock, limited or general partnership interests, limited liability company interests, or other equity interest, as the case may be, or from repaying any loans or advances from, or (except for instruments or agreements that by their express terms prohibit the transfer or assignment thereof or of any rights thereunder) transferring any of its properties or assets to, the Company or any other subsidiary, in each case except (i) as set forth in or contemplated in the Registration Statement, the Disclosure Package and the Final Prospectus and (ii) as would not reasonably be expected to have a Material Adverse Effect.
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(ee) The Company and its subsidiaries possess such licenses, certificates, permits and other authorizations issued by all applicable federal, state, local or foreign regulatory agencies or bodies necessary to conduct their respective businesses, except where the failure to possess such license, certificate, permit or other authorization would not reasonably be expected to have a Material Adverse Effect, and neither the Company nor any such subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to have a Material Adverse Effect, except as set forth in or contemplated in the Registration Statement, the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto).
(ff) The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with managements general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with managements general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and its subsidiaries internal controls over financial reporting are effective and the Company and its subsidiaries are not aware of any material weakness in their internal controls over financial reporting.
(gg) The Company and its subsidiaries maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act); such disclosure controls and procedures are effective.
(hh) The Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
(ii) Except as set forth in or contemplated in the Registration Statement, the Disclosure Package and the Final Prospectus, or except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (A) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, Hazardous Materials ) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous
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Materials (collectively, Environmental Laws ), (B) the Company and its subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (C) there are no pending or, to the knowledge of the Company, threatened, administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its subsidiaries and (D) to the knowledge of the Company, there are no events or circumstances that would reasonably be expected to form the basis of an order by any governmental body or agency for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its subsidiaries under any Environmental Laws.
(jj) Except as would not reasonably be expected to have a Material Adverse Effect, (i) no prohibited transaction as defined under Section 406 of the Employee Retirement Income Security Act of 1974, as amended ( ERISA ) or Section 4975 of the Internal Revenue Code of 1986, as amended (the Code ) and not exempt under Section 408 of ERISA and the regulations and published interpretations thereunder has occurred or is reasonably expected to occur (including upon the execution and delivery of this Agreement) with respect to any employee benefit plan (as defined in Section 3(3) ERISA, each an Employee Benefit Plan )) maintained by the Company or its subsidiaries, (ii) the Company does not have any obligations under any collective bargaining agreement with any union and no organization efforts are underway with respect to Company employees, (iii) each Employee Benefit Plan maintained by the Company or any of its ERISA Affiliates which is intended to be qualified under Section 401(a) of the Code, has received a favorable determination or opinion letter from the Internal Revenue Service that such plan is so qualified, and, to the knowledge of the Company, nothing has occurred, whether by action or failure to act, that could reasonably be expected to cause the loss of such qualification, (iv) neither the Company nor any of its ERISA Affiliates maintains or is required to contribute to an employee welfare plan which provides retiree or other post-employment welfare benefits or insurance coverage (other than continuation coverage (as defined in Section 602 of ERISA) or as otherwise required by applicable law), (v) neither the Company nor any of its ERISA Affiliates has maintained, sponsored, contributed to or otherwise incurred any liability or obligation under any employee benefit plan within the meaning of Section 3(3) of ERISA that is subject to Section 412 of the Code or Section 302 or Title IV of ERISA, and neither the Company nor any of its ERISA Affiliates maintains or contributes to or has otherwise incurred any liability or obligation under any multiemployer plan as defined in Section 3(37) of ERISA and (vi) none of the Company, any of its subsidiaries or any of their Employee Benefit Plans is the subject of an audit or investigation by the Internal Revenue Service, the U.S. Department of Labor, the PBGC or any other federal or state governmental agency relating to any Employee Benefit Plan or is the subject of any lawsuit, arbitration, mediation or other claim relating to any Employee Benefit Plan (other than claims for benefits submitted in the ordinary course). For the purpose of this paragraph, an ERISA Affiliate means any member of the companys controlled group as defined in Code Section 414(b), (c), (m) or (o).
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(kk) The Company is in compliance in all material respects with all provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the Sarbanes-Oxley Act ).
(ll) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries, any officer of the Manager, or any employee of The Blackstone Group L.P. or any of its direct or indirect subsidiaries (including the Manager) (collectively, Blackstone ), in each case acting on behalf of the Company or any of its subsidiaries, is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the FCPA ), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any foreign official (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA; and the Company, its subsidiaries and, to the knowledge of the Company, its affiliates and Blackstone acting on behalf of the Company or any of its subsidiaries have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith. The Company and its subsidiaries and, to the knowledge of the Company, its affiliates and Blackstone acting on behalf of the Company or any of its subsidiaries, have conducted their businesses in compliance with, to the extent applicable to the Company and its subsidiaries, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions, and have instituted and maintained policies and procedures designed to promote and achieve compliance therewith.
(mm) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the Money Laundering Laws ) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(nn) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries, any officer of the Manager, or any employee of Blackstone, in each case acting on behalf of the Company or any of its subsidiaries (i) is currently subject to any Sanctions (as defined below), (ii) is, in the case of an entity, organized or located in, or in the case of an individual, residing in any country or territory to the extent that such country or territory itself is the subject of any Sanction (a Designated Jurisdiction ), or
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(iii) is knowingly engaged in any transaction with any person who is the subject of Sanctions or who is, in the case of an entity, organized or located in, or in the case of an individual, residing in any Designated Jurisdiction. The Company will not knowingly directly or indirectly use the proceeds of the offering of the Securities hereunder, or lend, contribute, provide or otherwise make available such proceeds, for the purpose of funding any activity or business in any Designated Jurisdiction or funding any activity or business of any entity organized or located in, or any individual residing in, any Designated Jurisdiction or any person who is the subject of any Sanctions, or in any other manner that will result in any violation by any person (including any Underwriter) of Sanctions. As used herein, Sanction(s) means any economic or trade sanction administered or enforced by the United States Government (including without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury), the United Nations Security Council, the European Union, Her Majestys Treasury or other relevant sanctions authority.
(oo) No relationship, direct or indirect, exists between or among the Company on the one hand, and the directors, executive officers, or stockholders of the Company on the other hand, which is required to be described in the Registration Statement, the Disclosure Package and the Final Prospectus and which is not so described.
(pp) Commencing with its taxable year ended December 31, 2003, the Company has been organized and has operated in conformity with the requirements for qualification and taxation as a real estate investment trust (a REIT ) under the Code and all applicable regulations under the Code, and its form of organization and proposed method of operation will enable it to meet the requirements for qualification and taxation as a REIT under the Code and all applicable regulations under the Code. The Company presently intends to continue to qualify as a REIT under the Code and all applicable regulations under the Code for all subsequent years, and the Company, after reasonable inquiry and diligence, does not know of any event that would reasonably be expected to cause the Company to fail to qualify as a REIT at any time. Each of the Companys corporate subsidiaries that has elected, together with the Company, to be a taxable REIT subsidiary is in compliance with all requirements applicable to a taxable REIT subsidiary within the meaning of Section 856(l) of the Code and all applicable regulations under the Code, and the Company, after reasonable inquiry and diligence, is not aware of any fact that could negatively impact such qualification. Each of the Companys corporate subsidiaries (or subsidiaries taxable as corporations for U.S. federal income tax purposes) that is not a taxable REIT subsidiary is a REIT or qualified REIT subsidiary within the meaning of Section 856(i) of the Code and all applicable regulations under the Code. The entities listed on Schedule VI hereto are wholly-owned subsidiaries of the Company that are qualified REIT subsidiaries within the meaning of Section 856(i) of the Code. The Company has no other qualified REIT subsidiaries. The entities listed on Schedule VII hereto are subsidiaries of the Company that are taxable REIT subsidiaries within the meaning of Section 856(l) of the Code. The Company has no other taxable REIT subsidiaries.
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(qq) The Company and each of its subsidiaries (including any predecessor entities) have not distributed, and prior to the later of the Closing Date and the completion of the distribution of the Securities, will not distribute, any offering material in connection with the offering or sale of the Securities other than the Registration Statement, the Preliminary Prospectus, the Final Prospectus or any other materials, if any, permitted by the Act.
(rr) The statistical and market-related data included in the Registration Statement, the Disclosure Package and the Final Prospectus are based on or derived from sources that the Company believes to be reliable and accurate in all material respects.
(ss) No forward-looking statement (within the meaning of Section 27A of the Act and Section 21E of the Exchange Act) included or incorporated by reference in the Registration Statement, the Disclosure Package or the Final Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
(tt) To enable the Underwriters to rely on Rule 5110(b)(7)(C)(i) of the Financial Industry Regulatory Authority, Inc. ( FINRA ), the Company represents that, as of the date of this Agreement, the Company (i) has a non-affiliate, public common equity float of at least $150 million or a non-affiliate, public common equity float of at least $100 million and annual trading volume of at least three million shares; (ii) has been subject to the reporting requirements of Section 12 or 15(d) of the Exchange Act and has filed all material required to be filed pursuant to Sections 13, 14 or 15(d) of the Exchange Act for a period of at least 36 calendar months immediately preceding (A) the filing of the Registration Statement with the Commission and (B) the date of this Agreement; and (iii) has filed in a timely manner all reports required to be filed during the 12 calendar months and any portion of a month immediately preceding (A) the filing of the Registration Statement with the Commission and (B) the date of this Agreement.
(ii) The Manager represents and warrants to each Underwriter and agrees with each Underwriter as set forth below in this Section 1(ii).
(a) The information regarding Blackstone and its affiliates (other than the Company) in the Registration Statement, the Disclosure Package and the Final Prospectus (such information, the Manager Information ) is true and correct in all material respects. As of the date of this Agreement, the Manager has no plan or intention to materially alter its investment allocation policy with respect to the Company as described in the Registration Statement, the Disclosure Package and the Final Prospectus.
(b) The Manager (i) has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware, (ii) has limited liability company power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as described in the Registration Statement, the Disclosure Package and the Final Prospectus and to enter into and perform its obligations under this Agreement and the Management Agreement, and (iii) is duly qualified to do business as a foreign limited liability company and is in good standing in each jurisdiction which requires such qualification, except in the cases of clauses (ii) and
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(iii) where the failure to have such power or authority or to be so qualified or to be in good standing would not reasonably be expected to have a material adverse effect on the condition (financial or otherwise), business prospects, earnings, business or properties of the Manager and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business (a Manager Material Adverse Effect ).
(c) This Agreement has been duly authorized, executed and delivered by the Manager.
(d) The Management Agreement has been duly authorized, executed and delivered by the Manager. The Management Agreement constitutes a valid and binding agreement of the Manager enforceable against the Manager in accordance with its terms, except to the extent limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws relating to or affecting creditors rights and remedies generally, and subject, as to enforceability, to general principles of equity and, with respect to equitable relief, the discretion of the court before which any proceeding therefor may be brought (regardless of whether enforcement is sought in a proceeding at law or in equity).
(e) The Manager is not (i) in violation of its certificate of formation or its limited liability company agreement or (ii) in default in the performance or observance of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property is subject, except in the case of clause (ii) for any default which would not, individually or in the aggregate, reasonably be expected to have a Manager Material Adverse Effect; and the execution, delivery and performance of this Agreement by the Manager, the performance of the Management Agreement by the Manager and the consummation of the transactions contemplated herein and therein and in the Registration Statement, the Disclosure Package and the Final Prospectus and compliance by the Manager with its obligations hereunder and thereunder does not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach or violation of, or default or Repayment Event under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Manager pursuant to (i) the certificate of formation or limited liability company agreement of the Manager, (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Manager is a party or is bound or to which any of its property or assets is subject, except as would not, individually or in the aggregate, reasonably be expected to have a Manager Material Adverse Effect and would not reasonably be expected to have a material adverse effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby, or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to the Manager or any of its properties, except as would not reasonably be expected to have a Manager Material Adverse Effect and would not reasonably be expected to have a material adverse effect on the performance of this Agreement or the consummation of any of the transactions contemplated hereby.
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(f) Except as set forth in or contemplated in the Registration Statement, the Disclosure Package or the Final Prospectus, (a) there is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Manager, threatened, against or affecting the Manager that would, individually or in the aggregate, reasonably be expected to have a Manager Material Adverse Effect, or that would reasonably be expected to materially and adversely affect the consummation of the transactions contemplated in this Agreement and the Management Agreement or the performance by the Manager of its obligations hereunder or thereunder; and (b) the aggregate of all pending legal or governmental proceedings to which the Manager is a party or of which any of its property or assets is the subject, including ordinary routine litigation incidental to the business, would not, individually or in the aggregate, reasonably be expected to have a Manager Material Adverse Effect.
(g) No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency is necessary or required for the performance by the Manager of its obligations hereunder, in connection with the offering or the consummation of the transactions contemplated by this Agreement and the Management Agreement, except such as have been obtained or made under or as may be required under the Act or the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters in the manner contemplated herein and in the Registration Statement, Disclosure Package and the Final Prospectus.
(h) The Manager has not been notified that any of its executive officers plans to terminate his, her or their employment with his, her or their current employer, except where such termination would not reasonably be expected to have a Manager Material Adverse Effect. Neither the Manager nor any executive officer or key employee of the Manager, is subject to any non-compete, nondisclosure, confidentiality, employment, consulting or similar agreement that would be violated by the present or proposed business activities of the Company or the Manager as described in the Registration Statement, the Disclosure Package and the Final Prospectus, except where such violation would not reasonably be expected to have a Manager Material Adverse Effect.
(i) The Manager operates a system of internal controls sufficient to provide reasonable assurances that (A) transactions that may be effectuated by it on behalf of the Company pursuant to its duties set forth in the Management Agreement will be executed in accordance with managements general or specific authorization and (B) access to the Companys assets is permitted only in accordance with managements general or specific authorization.
(j) Except as set forth in or contemplated in the Registration Statement, the Disclosure Package and the Final Prospectus, since its formation, there has not been any material adverse change in or affecting the business prospects, earnings, business or properties of the Manager or that could prevent the Manager from carrying out its obligations under this Agreement or the Management Agreement.
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(k) The Manager has not taken, and will not take, directly or indirectly, any action designed to or that has constituted or that would be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
(l) The Manager has not distributed, and prior to the later of the Closing Date and the completion of the distribution of the Securities, will not distribute, any offering material in connection with the offering or sale of the Securities other than the Preliminary Prospectus, the Final Prospectus or any other materials, if any, permitted by the Act.
(m) Blackstone Real Estate Special Situations Advisors L.L.C. ( BRESSA ), the sole and managing member of the Manager, is registered with the Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (the Advisers Act ). The Manager is disclosed to be a relying adviser on BRESSAs Form ADV on file with the Commission, and the Manager is not prohibited by the Advisers Act or the rules and regulations thereunder from performing its obligations under the Management Agreement as described in the Registration Statement, the Disclosure Package and the Final Prospectus.
(n) The Manager is not aware of and has not taken any action, directly or indirectly, that would result in a violation of the FCPA, including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any foreign official (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA; and the Manager has conducted its businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(o) The operations of the Manager are and have been conducted at all times in material compliance with the Money Laundering Laws and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Manager with respect to the Money Laundering Laws is pending or, to the knowledge of the Manager, threatened.
(iii) Any certificate signed by any officer of the Company and delivered to the Representative or counsel for the Underwriters in connection with the offering of the Securities shall be deemed a representation and warranty by the Company, as to matters covered thereby, to each Underwriter. Any certificate signed by any officer of the Manager and delivered to the Representative or counsel for the Underwriters in connection with the offering of the Securities shall be deemed a representation and warranty by the Manager, as to matters covered thereby, to each Underwriter.
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2. Purchase and Sale . (a) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Company, at the purchase price set forth in Schedule I hereto, the principal amount of Underwritten Securities set forth opposite such Underwriters name in Schedule II hereto.
(b) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Company hereby grants an option to the several Underwriters to purchase, severally and not jointly, up to the principal amount of Option Securities set forth in Schedule I hereto solely to cover over-allotments, if any, at the same purchase price set forth in Schedule I hereto for Underwritten Securities. Said option may be exercised in whole or in part at any time on or before the 30th day after the date of the Final Prospectus upon written notice by the Representative to the Company setting forth the principal amount of Option Securities as to which the several Underwriters are exercising the option and the settlement date. The principal amount of Option Securities to be purchased by each Underwriter shall be the same percentage of the total principal amount of Option Securities to be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten Securities, subject to such adjustments as you in your absolute discretion shall make to eliminate any fractions.
3. Delivery and Payment . Delivery of and payment for the Underwritten Securities and the Option Securities (if the option provided for in Section 2(b) hereof shall have been exercised on or before the third Business Day immediately preceding the Closing Date) shall be made on the date and at the time specified in Schedule I hereto or at such time on such later date not more than three Business Days after the foregoing date as the Representative shall designate, which date and time may be postponed by agreement between the Representative and the Company or as provided in Section 9 hereof (such date and time of delivery and payment for the Securities being herein called the Closing Date ). Delivery of the Securities shall be made to the Representative for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representative of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. Delivery of the Underwritten Securities and the Option Securities shall be made through the facilities of The Depository Trust Company unless the Representative shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after the third Business Day preceding the Closing Date, the Company will deliver the Option Securities (at the expense of the Company) to the Representative, at One Bryant Park New York, New York, 10036 on the date specified by the Representative (which shall be within three Business Days after exercise of said option) for the respective accounts of the several Underwriters, against payment by the several Underwriters through the Representative of the purchase price thereof to or upon the order of the Company by wire transfer payable in same-day funds to an account specified by the Company. If settlement for the Option Securities occurs after the Closing Date, the Company will deliver to the Representative on the settlement date for the Option Securities, and the obligation of the Underwriters to purchase the Option Securities shall be conditioned upon receipt of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered on the Closing Date pursuant to Section 6 hereof.
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4. Offering by Underwriters . It is understood that the several Underwriters propose to offer the Securities for sale to the public as set forth in the Final Prospectus.
5. Agreements .
(i) The Company agrees with the several Underwriters that (and as set forth in Section 5(i)(i), the Underwriters agree with the Company that):
(a) Prior to the termination of the offering of the Securities, the Company will not file any amendment of the Registration Statement or supplement (including the Final Prospectus or any Preliminary Prospectus) to the Base Prospectus unless the Company has furnished you a copy for your review prior to filing and will not file or use any such proposed amendment or supplement to which you reasonably object; provided that the Company shall not be restricted from complying with its reporting obligations under the Exchange Act. The Company will cause the Final Prospectus, properly completed, and any supplement thereto to be filed in a form approved by the Representative with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed (without reliance on Rule 424(b)(8)) and will provide evidence satisfactory to the Representative of such timely filing. The Company will promptly advise the Representative in writing (i) when the Final Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b), (ii) when, prior to termination of the offering of the Securities, any amendment to the Registration Statement shall have been filed or become effective, (iii) of any request by the Commission or its staff for any amendment of the Registration Statement or for any supplement to the Final Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any Preliminary Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus or any amendment or supplement thereto, or of the initiation or threatening of any proceedings for any of such purposes, (v) if the Company becomes the subject of a proceeding under Section 8A of the Act in connection with the offering of the Securities and the Underlying Shares and (vi) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities or the Common Stock for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Company will use its commercially reasonable efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement, any Preliminary Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus or any amendment or supplement thereto, as the case may be, and, upon such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its commercially reasonable efforts to have such amendment or new registration statement declared effective as soon as practicable.
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(b) To prepare a final term sheet, containing solely a description of final terms of the Securities and the offering thereof, in the form approved by you and attached as Schedule IV hereto and to file such term sheet pursuant to Rule 433(d) within the time required by such Rule.
(c) If, at any time prior to the filing of the Final Prospectus pursuant to Rule 424(b), any event occurs as a result of which the Disclosure Package would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made or the circumstances then prevailing not misleading, the Company will (i) notify promptly the Representative so that any use of the Disclosure Package may cease until it is amended or supplemented; (ii) amend or supplement the Disclosure Package to correct such statement or omission; and (iii) supply any amendment or supplement to you in such quantities as you may reasonably request.
(d) If, at any time when a prospectus relating to the Securities is required to be delivered under the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), any event occurs as a result of which the Final Prospectus as then 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 at such time not misleading, or if it shall be necessary to amend the Registration Statement, file a new registration statement or supplement the Final Prospectus to comply with the Act or the Exchange Act or the respective rules thereunder, including in connection with use or delivery of the Final Prospectus, the Company promptly will (i) notify the Representative of any such event, (ii) prepare and file with the Commission, subject to the second sentence of paragraph (a) of this Section 5(i), an amendment or supplement or new registration statement which will correct such statement or omission or effect such compliance, (iii) use its commercially reasonable efforts to have any amendment to the Registration Statement or new registration statement declared effective as soon as practicable in order to avoid any disruption in use of the Final Prospectus and (iv) supply any supplemented Final Prospectus to you in such quantities as you may reasonably request.
(e) The Company will give the Representative notice of its intention to make any filings pursuant to the Exchange Act from the execution of this Agreement to the Closing Date and any settlement date and will furnish the Representative with copies of any such documents a reasonable amount of time prior to such proposed filing, as the case may be.
(f) The Company will furnish to the Representative and counsel for the Underwriters, without charge, signed copies of the Registration Statement (including exhibits thereto) and to each other Underwriter a copy of the Registration Statement (without exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172), as many copies of each Preliminary Prospectus, the Final Prospectus and each Issuer Free Writing Prospectus and any supplement thereto
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as the Representative may reasonably request. The Company will pay the expenses of printing or other production of all documents relating to the offering. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. The Preliminary Prospectus, the Final Prospectus, each Issuer Free Writing Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(g) As soon as practicable, the Company will make generally available to its security holders and to the Representative an earnings statement or statements of the Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act.
(h) The Company will arrange, if necessary, for the qualification of the Securities and the Underlying Shares for offering and sale under the laws of such jurisdictions as the Representative may designate and will maintain such qualifications in effect so long as required for the distribution of the Securities and Underlying Shares; provided that in no event shall the Company be obligated to qualify to do business in any jurisdiction where it is not now so qualified, to subject itself to taxation in respect of doing business in any jurisdiction in which it is not now so subject or to take any action that would subject it to service of process in suits, other than those arising out of the offering or sale of the Securities and the Underlying Shares, in any jurisdiction where it is not now so subject.
(i) The Company agrees that, unless it has obtained or will obtain the prior written consent of the Representative, and each Underwriter, severally and not jointly, agrees with the Company that, unless it has or shall have obtained, as the case may be, the prior written consent of the Company, it has not made and will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a free writing prospectus (as defined in Rule 405) required to be filed by the Company with the Commission or retained by the Company under Rule 433, other than the free writing prospectus containing the information contained in the final term sheet prepared and filed pursuant to Section 5(i)(b) hereto; provided that the prior written consent of the parties hereto shall be deemed to have been given in respect of the Free Writing Prospectuses included in Schedule III hereto and any electronic road show. Any such free writing prospectus consented to by the Representative or the Company is hereinafter referred to as a Permitted Free Writing Prospectus. The Company agrees that (x) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (y) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.
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(j) The Company will not, without the prior written consent of the Representative, offer, sell, contract to sell, pledge, or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Company or any affiliate of the Company or any person in privity with the Company or any affiliate of the Company), directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any shares of Common Stock or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock or shares of any class of capital stock of the Company or any securities convertible into, or exercisable, or exchangeable for, any of the foregoing; or publicly announce an intention to effect any such transaction, until 45 days after the date of the Final Prospectus, provided , however , that the Company may without the prior written consent of the Representative (A) issue and sell the Securities to be sold hereunder, (B) issue and sell shares of Common Stock (or options to purchase shares of Common Stock) pursuant to its equity incentive plans described in the Disclosure Package (including, for the avoidance of doubt, the Companys 2016 Stock Incentive Plan, 2016 Manager Incentive Plan, 2013 Stock Incentive Plan and 2013 Manager Incentive Plan) and file a registration statement or registration statements (or any amendment or supplement thereto) on Form S-8 (or any successor form) in connection with any of the foregoing, (C) issue shares of Common Stock to be issued upon the vesting of restricted stock units outstanding as of the date of this Agreement, (D) issue shares of Common Stock issuable upon the conversion of securities outstanding as of the date of this Agreement, (E) issue shares of Common Stock pursuant to the Companys Dividend Reinvestment and Direct Stock Purchase Plan as in effect on the date hereof, (F) issue and sell shares of Common Stock pursuant to the Companys at-the-market program as in effect on the date hereof and (G) issue shares of Common Stock or securities convertible into or exchangeable for Common Stock in connection with mergers or acquisitions, joint ventures, commercial relationships or strategic transactions, provided that (x) the aggregate number of shares of Common Stock issued or issuable does not exceed 5% of the number of shares of Common Stock outstanding as of the date hereof and (y) the acquiree of any such Common Stock or securities convertible into or exercisable or exchangeable for Common Stock pursuant to this clause (G) enters into an agreement in the form of Exhibit A-1 hereto.
(k) The Company, during the period when the Final Prospectus is required to be delivered (or, but for the exception afforded by Rule 172, would be required to be delivered) under the Act, will file all documents required to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act.
(l) 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, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.
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(m) The Company agrees to pay or cause to be paid the costs and expenses relating to the following matters: (i) the preparation, printing or reproduction and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), each Preliminary Prospectus, the Final Prospectus and each Issuer Free Writing Prospectus, and each amendment or supplement to any of them; (ii) the preparation, printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, each Preliminary Prospectus, the Final Prospectus and each Issuer Free Writing Prospectus, and all amendments or supplements to any of them, as may, in each case, be reasonably requested for use in connection with the offering and sale of the Securities and the Underlying Shares; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Securities, including any stamp or transfer taxes in connection with the original issuance and sale of the Securities; (iv) the printing (or reproduction) and delivery of this Agreement, any blue sky memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Securities; (v) the registration of the Securities under the Act and the Exchange Act and the listing of the Underlying Shares on the NYSE; (vi) any registration or qualification of the Securities and Underlying Shares for offer and sale under the securities or blue sky laws of the several states (including filing fees and the reasonable fees and expenses of counsel for the Underwriters relating to such registration and qualification); (vii) any filings required to be made with FINRA (including filing fees) and the reasonable fees and expenses of counsel for the Underwriters related to FINRA matters not to exceed $10,000; (viii) the transportation and other reasonable expenses incurred by or on behalf of Company representatives in connection with presentations to prospective purchasers of the Securities, provided that 50% of the cost of any aircraft chartered in connection with the road show shall be paid by the Underwriters (with the Company paying the remaining 50% of the cost); (ix) the fees and expenses of the Companys and Blackstones accountants and the fees and expenses of counsel (including local and special counsel) for the Company and Blackstone; (x) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; (xi) the fees of any nationally recognized statistical rating organization (as defined in Section 3(a)(62) under the Exchange Act); and (xii) all other costs and expenses incident to the performance by the Company of its obligations hereunder.
(n) The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the Preliminary Prospectus and the Final Prospectus under the caption Use of Proceeds.
(o) The Company agrees to reserve and keep available at all times, free of preemptive rights, a number of shares of Common Stock, for the purpose of enabling the Company to satisfy any obligation to issue shares of Common Stock upon conversion of the Securities, equal to the aggregate Underlying Shares in respect of all Securities outstanding.
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(p) The Company will use its reasonable best efforts to effect the listing of the Underlying Shares on the NYSE.
(q) The Company will use its reasonable best efforts to meet the requirements to qualify, for the taxable year ended December 31, 2017 and the taxable year ending December 31, 2018, as a REIT under the Code.
(ii) The Manager agrees with the several Underwriters that:
(a) The Manager will not take, directly or indirectly, any actions 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.
(b) During the period when a prospectus is required (or but for the exception afforded by Rule 172 would be required) to be delivered under the Act or the Exchange Act, it shall notify you and the Company of the occurrence of any material events regarding the Managers activities, affairs or condition, financial or otherwise, and the Manager will forthwith supply such information to the Company as shall be necessary in the opinion of counsel to the Company and the Underwriters for the Company to prepare any necessary amendment or supplement to the Final Prospectus so that, as so amended or supplemented, the Final Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made or then prevailing, not misleading.
6. Conditions to the Obligations of the Underwriters . The obligations of the Underwriters to purchase the Underwritten Securities and the Option Securities, as the case may be, shall be subject to the accuracy of the representations and warranties on the part of the Company and the Manager contained herein as of the Execution Time, the Closing Date and any settlement date pursuant to Section 3 hereof, to the accuracy of the statements of any officer of the Company and the Manager made in any certificates pursuant to the provisions hereof, to the performance by the Company and the Manager of its obligations hereunder and to the following additional conditions:
(a) The Final Prospectus, and any supplement thereto, have been filed in the manner and within the time period required by Rule 424(b); the final term sheet contemplated by Section 5(i)(b) hereto and any other material required to be filed by the Company pursuant to Rule 433(d) under the Act, shall have been filed with the Commission within the applicable time periods prescribed for such filings by Rule 433; the Registration Statement has become effective and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use shall have been issued under the Act, no order preventing or suspending the use of any Preliminary Prospectus or the Final Prospectus shall have been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Companys knowledge, threatened or contemplated.
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(b) The Representative shall have received (i) the opinion, dated as of the Closing Date, of Simpson Thacher & Bartlett LLP, counsel for the Company and the Manager, to the effect set forth in Exhibit B-1 hereto; (ii) the opinion, dated as of the Closing Date, of Simpson Thacher & Bartlett LLP, counsel for the Company, to the effect set forth in Exhibit B-2 hereto; and (iii) the opinion, dated as of the Closing Date, of Venable LLP, special Maryland counsel for the Company, to the effect set forth in Exhibit B-3 hereto, each in form and substance reasonably satisfactory to the counsel for the Underwriters, together with signed or reproduced copies of such letters for each of the other Underwriters.
(c) The Representative shall have received from Paul Hastings LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing Date and addressed to the Representative, with respect to such matters as the Representative may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters. In rendering their opinion as aforesaid, Paul Hastings LLP may rely upon an opinion, dated as of the Closing Date, of Venable LLP, as to matters governed by Maryland law, or such other counsel satisfactory to the Representative.
(d) The Company shall have furnished to the Representative a certificate of the Company, signed by the chief executive officer of the Company and the principal financial officer of the Company, on behalf of the Company to the effect that the signers of such certificate have carefully examined the Registration Statement, the Disclosure Package, the Final Prospectus and any supplements or amendments thereto, as well as each electronic road show used in connection with the offering of the Securities, and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date;
(ii) the Registration Statement has become effective under the Act and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued and no proceedings for that purpose have been instituted or, to the Companys knowledge, threatened; and
(iii) since the date of the most recent financial statements included or incorporated by reference in the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto), there has been no Material Adverse Effect, except as set forth in or contemplated in the Disclosure Package and the Final Prospectus (exclusive of any supplement thereto).
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(e) The Manager shall have furnished to the Representative a certificate signed by the chief executive officer, president or a senior managing director of the Manager and the principal financial officer (or persons having equivalent functions) of the Manager, on behalf of the Manager to the effect that the signers of such certificate have carefully examined the Registration Statement, the Disclosure Package, the Final Prospectus and any supplements or amendments thereto, as well as each electronic road show used in connection with the offering of the Securities, and this Agreement and that (i) the representations and warranties of the Manager in this Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date and (ii) the Manager has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date.
(f) At the Execution Time and at the Closing Date, the Representative shall have received from Deloitte & Touche, LLP letters dated such date, in form and substance satisfactory to the Representative, together with signed or reproduced copies of such letters for each of the other Underwriters containing statements and information of the type ordinarily included in accountants comfort letters to underwriters with respect to the financial statements and certain financial information relating to the Company and Blackstone and its affiliates included or incorporated by reference in the Registration Statement, the Disclosure Package and the Final Prospectus (including any supplement thereto at the date of the letter).
(g) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof) and the Final Prospectus (exclusive of any amendment or supplement thereto), there shall not have been any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), earnings, business or properties of the Company and its subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Disclosure Package and the Final Prospectus (exclusive of any amendment or supplement thereto) the effect of which is, in the sole judgment of the Representative, so material and adverse as to make it impractical or inadvisable to proceed with the offering, sale or delivery of the Securities as contemplated by the Registration Statement (exclusive of any amendment thereof), the Disclosure Package and the Final Prospectus (exclusive of any amendment or supplement thereto).
(h) At the Execution Time and at the Closing Date, the Representative shall have received a certificate signed by the Chief Financial Officer of the Company certifying as to the preparation, completeness and accuracy of certain financial and statistical data relating to the Company included or incorporated by reference in the Registration Statement, the Disclosure Package or the Final Prospectus.
(i) Prior to the Closing Date, the Company shall have furnished to the Representative such further information, certificates and documents as the Representative may reasonably request.
(j) FINRA, upon review, if any, of the terms of the public offering of the Securities, shall not have objected to such offering, such terms or the Underwriters participation in same.
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(k) The Underlying Shares shall have been listed and admitted and authorized for trading on the NYSE, and satisfactory evidence of such actions shall have been provided to the Representative.
(l) Prior to the Execution Time, the Company shall have furnished to the Representative a letter or letters, substantially in the form of Exhibit A-1 and A-2 hereto, signed by each of the parties identified on Schedule V hereto (the Lock-Up Agreements ). The Company will use its commercially reasonable efforts to enforce the terms of each Lock-Up Agreement.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions, letters and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Representative and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the Representative. Notice of such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered at the office of Paul Hastings LLP, counsel for the Underwriters, at 200 Park Avenue, New York, New York 10166, on the Closing Date.
7. Reimbursement of Underwriters Expenses . If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10 hereof or because of any refusal, inability or failure on the part of the Company or the Manager to perform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Underwriters, the Company will reimburse the Underwriters severally through the Representative on demand for all documented out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution .
(a) The Company agrees to indemnify and hold harmless each Underwriter, the directors, officers, employees, affiliates and agents of each Underwriter and each person who controls any Underwriter within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement as originally filed or in any amendment thereof, or in the Base Prospectus, any Preliminary Prospectus or any other preliminary prospectus supplement relating to the Securities, the Disclosure Package, the Final Prospectus, or any Issuer Free Writing Prospectus, or in any amendment or supplement to any of the foregoing, or arise out of or are based upon the omission or alleged omission to state
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therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided , however , that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter through the Representative specifically for inclusion therein. This indemnity agreement will be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, its directors, each of the Companys officers who signed the Registration Statement, and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Company by or on behalf of such Underwriter through the Representative specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any Underwriter may otherwise have. The Company acknowledges that the following statements set forth in the Preliminary Prospectus and the Final Prospectus under the heading Underwriting: (i) the names of the Underwriters and their respective participation in the sale of the Securities, (ii) the third paragraph thereof related to selling concessions and dealer reallowances, (iii) the twelfth paragraph thereof, and (iv) the thirteenth, fourteenth and fifteenth paragraphs (including, for the avoidance of doubt, information in bullet points) thereof related to stabilization, short positions and covering transactions and penalty bids and derivative transactions in connection with the offering, constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in any Preliminary Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying partys choice at the indemnifying partys expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below);
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provided , however , that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying partys election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. It is understood and agreed that the indemnifying party 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 parties. The indemnifying party 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 party agrees to indemnify each indemnified party from and against any loss or liability by reason of such settlement or judgment. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by the previous sentence effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement unless such failure to reimburse the indemnified party is based on a dispute with a good faith basis as to either the obligation of the indemnifying party arising under this Section 8 to indemnify the indemnified party or the amount of such obligation and the indemnifying party shall have notified the indemnified party of such good faith dispute prior to the date of such settlement. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent (A) includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and (B) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified party.
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(d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 8 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Underwriters severally agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same) (collectively Losses ) to which the Company and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by the Underwriters on the other from the offering of the Securities; provided , however , that in no case shall any Underwriter (except as may be provided in any agreement among underwriters relating to the offering of the Securities) be responsible for any amount in excess of the underwriting discount or commission applicable to the Securities purchased by such Underwriter hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Underwriters severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by the Company, and benefits received by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover page of the Final Prospectus. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company on the one hand or by the Underwriters on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer, employee, affiliate and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter . If any one or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the principal amount of Securities set forth opposite their names in Schedule II hereto bears to the aggregate principal amount of Securities set forth opposite the names of all the remaining Underwriters) the
32
Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase; provided , however , that in the event that the aggregate principal amount of Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate principal amount of Securities set forth in Schedule II hereto, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting Underwriters do not purchase all the Securities, this Agreement will terminate without liability to any nondefaulting Underwriter or the Company. In the event of a default by any Underwriter as set forth in this Section 9, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the Representative shall determine in order that the required changes in the Registration Statement and the Final Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Company and any nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination . This Agreement shall be subject to termination in the absolute discretion of the Representative, by notice given to the Company prior to delivery of and payment for the Securities, if at any time prior to such time (i) trading in the Common Stock shall have been suspended by the Commission or the NYSE or trading in securities generally on the NYSE shall have been suspended or limited or minimum prices shall have been established on such exchange, (ii) a banking moratorium shall have been declared either by Federal or New York State authorities or (iii) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Representative, impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Disclosure Package or the Final Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive . The respective agreements, representations, warranties, indemnities, rights of contribution and other statements of the Company, the Manager or the officers of the Company or the Manager, and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter, the Company, the Manager or any of the officers, directors, employees, agents, affiliates or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices . All communications hereunder will be in writing and effective only on receipt, and, if sent to the Representative, will be mailed, delivered or telefaxed to Merrill Lynch, Pierce, Fenner & Smith Incorporated at One Bryant Park, New York, New York 10036, attention of Syndicate Department (facsimile: (646) 855-3073), with a copy to ECM Legal (facsimile: (212) 230-8730); with a copy to Paul Hastings LLP, Attention: Michael L. Zuppone (facsimile: (212) 230-7752) and Yariv Katz (facsimile: (212) 752-3849) and confirmed to it at Paul Hastings LLP, 200 Park Avenue, New York, New York 10166, Attention: Michael L. Zuppone and Yariv Katz; or, if sent to the Company or the Manager, will be mailed, delivered or telefaxed to Blackstone Mortgage Trust, Inc., Attention: Douglas Armer (facsimile: (646) 253-8405) and confirmed to it at Blackstone Mortgage Trust, Inc., 345 Park Avenue, 42nd Floor,
33
New York, New York 10154, Attention: Douglas Armer, with a copy to Simpson Thacher & Bartlett LLP, Attention: Andrew R. Keller and Edgar J. Lewandowski (facsimile: (212) 455-2502) and confirmed to it at Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York 10017, Attention: Andrew R. Keller and Edgar J. Lewandowski.
13. Compliance with USA 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 Underwriters 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 Underwriters to properly identify their respective clients.
14. Successors . This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees, affiliates, agents and controlling persons referred to in Section 8 hereof, and no other person will have any right or obligation hereunder.
15. No Fiduciary Duty . Each of the Company and the Manager hereby acknowledges and agrees that (a) the purchase and sale of the Securities pursuant to this Agreement is an arms-length commercial transaction between the Company and the Manager on the one hand, and the Underwriters and any affiliate through which they may be acting, on the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the Company or the Manager and (c) the engagement of the Underwriters by the Company in connection with the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore, each of the Company and the Manager agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether any of the Underwriters has advised or is currently advising the Company or the Manager on related or other matters). Each of the Company and the Manager agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Company or the Manager, in connection with such transaction or the process leading thereto.
16. Integration . This Agreement supersedes all prior agreements and understandings (whether written or oral) by and among the Company, the Manager and the Underwriters, or any of them, with respect to the subject matter hereof.
17. Applicable Law . This Agreement and any claim, controversy or dispute arising under or related to this Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.
18. Waiver of Jury Trial . Each of the Company and the Manager 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 Agreement or the transactions contemplated hereby.
34
19. Counterparts . This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement.
20. Headings . The section headings used herein are for convenience only and shall not affect the construction hereof.
21. Definitions . The terms which follow, when used in this Agreement, shall have the meanings indicated.
Act shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
Base Prospectus shall mean the base prospectus referred to in paragraph 1(i)(a) above contained in the Registration Statement at the Execution Time.
Business Day shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City.
Commission shall mean the Securities and Exchange Commission.
Disclosure Package shall mean (i) the Base Prospectus, (ii) the Preliminary Prospectus used most recently prior to the Execution Time, (iii) the Issuer Free Writing Prospectuses, if any, identified in Schedule III hereto, (iv) the final term sheet prepared and filed pursuant to Section 5(i)(b) hereto and (v) any other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Disclosure Package.
EDGAR shall mean the Commissions Electronic Data Gathering, Analysis and Retrieval System or any successor system.
Effective Date shall mean each date and time that the Registration Statement and any post-effective amendment or amendments thereto became or becomes effective, as the case may be.
Exchange Act shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
Execution Time shall mean 5:00 P.M., New York City time, on March 22, 2018 or such other time as agreed by the Company, the Manager and the Representative.
Final Prospectus shall mean the prospectus supplement relating to the Securities that was first filed pursuant to Rule 424(b) after the Execution Time, together with the Base Prospectus.
35
Free Writing Prospectus shall mean a free writing prospectus, as defined in Rule 405.
Issuer Free Writing Prospectus shall mean an issuer free writing prospectus, as defined in Rule 433.
Preliminary Prospectus shall mean any preliminary prospectus supplement to the Base Prospectus which is used prior to the filing of the Final Prospectus, together with the Base Prospectus.
Registration Statement shall mean the registration statement referred to in paragraph 1(i)(a) above, including exhibits and financial statements and any prospectus supplement relating to the Securities that is filed with the Commission pursuant to Rule 424(b) and deemed part of such registration statement pursuant to Rule 430B, as amended on each Effective Date and, in the event any post-effective amendment thereto becomes effective prior to the Closing Date, shall also mean such registration statement as so amended.
Rule 158, Rule 163, Rule 164, Rule 172, Rule 405, Rule 415, Rule 424, Rule 430B and Rule 433 refer to such rules under the Act.
subsidiary shall mean each direct and indirect subsidiary of the Company, except as the context otherwise requires.
Trust Indenture Act shall mean the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission promulgated thereunder.
Well-Known Seasoned Issuer shall mean a well-known seasoned issuer, as defined in Rule 405.
[ Signatures begin on the following page ]
36
If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this Agreement and your acceptance shall represent a binding agreement among the Company, the Manager and the several Underwriters.
Very truly yours, | ||
Blackstone Mortgage Trust, Inc. | ||
By: |
/s/ Leon Volchyok |
|
Name: Leon Volchyok | ||
Title: Secretary and Head of Legal and Compliance | ||
BXMT Advisors L.L.C. | ||
By: |
/s/ Leon Volchyok |
|
Name: Leon Volchyok | ||
Title: Authorized Signatory |
[Signature Page to the Underwriting Agreement]
The foregoing Agreement is
hereby confirmed and accepted
as of the date first written above.
For themselves and as Representative of the other several Underwriters, if any, listed on Schedule II hereto:
By: | Merrill Lynch, Pierce, Fenner & Smith Incorporated | |
By: |
/s/ Chris Porter |
|
Name: Chris Porter | ||
Title: Managing Director, Investment Banking |
[Signature Page to the Underwriting Agreement]
SCHEDULE I
Underwriting Agreement dated March 22, 2018
Representative: Merrill Lynch, Pierce, Fenner & Smith Incorporated
Title, Purchase Price and Description of Securities:
Title: 4.75% Convertible Senior Notes due 2023
Principal Amount of Underwritten Securities to be sold by the Company: $220,000,000
Principal Amount of Option Securities to be sold by the Company: $33,000,000
Price to the Public: 98.5%, plus accrued interest, if any, from March 27, 2018
Price to the Underwriters: 97.625%
Other provisions:
Closing Date, Time and Location: March 27, 2018 at 10:00 a.m. at Paul Hastings LLP, 200 Park Avenue, New York, New York 10166
Type of Offering: Non-Delayed
SCHEDULE II
Underwriters |
Principal Amount
of Underwritten Securities to be Purchased |
|||
Merrill Lynch, Pierce, Fenner & Smith Incorporated |
$ | 33,825,000 | ||
Barclays Capital Inc. |
$ | 33,825,000 | ||
Citigroup Global Markets Inc. |
$ | 33,825,000 | ||
J.P. Morgan Securities LLC |
$ | 33,825,000 | ||
Morgan Stanley & Co. LLC |
$ | 33,825,000 | ||
Wells Fargo Securities, LLC |
$ | 33,825,000 | ||
JMP Securities LLC |
$ | 8,525,000 | ||
Keefe, Bruyette & Woods, Inc. |
$ | 8,525,000 | ||
|
|
|||
Total |
$ | 220,000,000 | ||
|
|
SCHEDULE III
Schedule of Free Writing Prospectuses included in the Disclosure Package
Final pricing term sheet substantially in the form of Schedule IV attached hereto.
SCHEDULE IV
PRICING TERM SHEET |
Issuer Free Writing Prospectus | |
Dated March 22, 2018 |
Filed Pursuant to Rule 433 | |
Registration Statement No. 333-212769 | ||
Supplementing the Preliminary | ||
Prospectus Supplement | ||
dated March 22, 2018 and the | ||
Prospectus dated July 29, 2016 |
Blackstone Mortgage Trust, Inc.
$220,000,000
4.75% Convertible Senior Notes due 2023
This pricing term sheet supplements Blackstone Mortgage Trust, Inc.s preliminary prospectus supplement, dated March 22, 2018 (the Preliminary Prospectus Supplement), including the documents incorporated by reference therein, relating to the offering of the Notes (the Offering), and supersedes the information in the Preliminary Prospectus Supplement to the extent inconsistent with the information in the Preliminary Prospectus Supplement. In all other respects, this pricing term sheet is qualified in its entirety by reference to the Preliminary Prospectus Supplement. Terms used herein but not defined herein shall have the respective meanings as set forth in the Preliminary Prospectus Supplement. All references to dollar amounts are references to U.S. dollars. Unless the context otherwise requires, references to Blackstone Mortgage Trust or the Issuer, we, us and our in this pricing term sheet mean Blackstone Mortgage Trust, Inc. and not its subsidiaries.
Issuer: | Blackstone Mortgage Trust, Inc., a Maryland corporation | |
Title of Securities: | 4.75% Convertible Senior Notes due 2023 (the Notes) | |
Ticker / Exchange for Class A Common Stock: | BXMT / New York Stock Exchange (the NYSE) | |
Securities Offered: | $220,000,000 principal amount of Notes (plus up to an additional $33,000,000 principal amount if the underwriters exercise their option to purchase additional Notes) | |
Maturity: | March 15, 2023, unless earlier repurchased by us or converted | |
Issue Price: | 98.5%, plus accrued interest, if any, from March 27, 2018 | |
Underwriting Discounts and Commissions: | 0.875% | |
Interest: | 4.75% per year. Interest will accrue from the date of issuance (which is scheduled for March 27, 2018) | |
Interest Payment Dates: | Each March 15 and September 15, beginning on September 15, 2018 | |
Interest Payment Record Dates: | Each March 1 and September 1 | |
NYSE Last Reported Sale Price on March 22, 2018: | $31.50 per share of the Issuers class A common stock | |
Conversion Premium: | Approximately 15% above the NYSE last reported sale price on March 22, 2018. |
Initial Conversion Rate: | 27.6052 shares of the Issuers class A common stock for each $1,000 principal amount of Notes | |
Initial Conversion Price: | Approximately $36.23 per share of the Issuers class A common stock | |
Pricing Date: | March 22, 2018 | |
Trade Date: | March 23, 2018 | |
Expected Settlement Date: | March 27, 2018 | |
Joint Book-Running Managers: |
Merrill Lynch, Pierce, Fenner & Smith Incorporated Barclays Capital Inc. Citigroup Global Markets Inc. J.P. Morgan Securities LLC Morgan Stanley & Co. LLC Wells Fargo Securities, LLC |
|
Co-Managers |
JMP Securities LLC Keefe, Bruyette & Woods, Inc. |
|
CUSIP / ISIN: | 09257W AC4 / US09257WAC47 | |
Use of Proceeds: | The Issuer estimates that the net proceeds from the Offering will be approximately $214.4 million (or approximately $246.6 million if the underwriters exercise their option to purchase additional Notes solely to cover over-allotments, if any, in full), after deducting underwriting discounts and commissions and estimated offering expenses payable by the Issuer. The Issuer plans to use substantially all of the net proceeds from the Offering to originate and purchase additional commercial mortgage loans and other target assets and investments consistent with its investment strategies and investment guidelines. The Issuer may also use a portion of the net proceeds for working capital and other general corporate purposes, including repayment of indebtedness. | |
Adjustment to Shares Delivered Upon Conversion Upon a Make-Whole Fundamental Change: | The following table below sets forth the number of additional shares (as defined under Description of the NotesAdjustment to Conversion Rate Upon Conversion in Connection with a Make-Whole Fundamental Change in the Preliminary Prospectus Supplement) to be added to the conversion rate for each stock price and effective date set forth below: |
Stock Price | ||||||||||||||||||||||||||||||||||||||||||||||||
Effective Date |
$31.50 | $32.50 | $33.50 | $34.50 | $35.50 | $36.23 | $36.50 | $37.50 | $38.50 | $39.50 | $40.50 | $45.00 | ||||||||||||||||||||||||||||||||||||
March 27, 2018 |
4.1408 | 3.3305 | 2.6137 | 1.9881 | 1.4513 | 1.1145 | 1.0016 | 0.6347 | 0.3462 | 0.1314 | 0.0091 | 0.0000 | ||||||||||||||||||||||||||||||||||||
March 15, 2019 |
4.1408 | 3.2157 | 2.4961 | 1.8719 | 1.3408 | 1.0113 | 0.9011 | 0.5480 | 0.2751 | 0.0790 | 0.0049 | 0.0000 | ||||||||||||||||||||||||||||||||||||
March 15, 2020 |
4.1408 | 3.1803 | 2.4463 | 1.8122 | 1.2766 | 0.9484 | 0.8400 | 0.4984 | 0.2481 | 0.0790 | 0.0049 | 0.0000 | ||||||||||||||||||||||||||||||||||||
March 15, 2021 |
4.1408 | 3.1760 | 2.4155 | 1.7600 | 1.2101 | 0.8774 | 0.7685 | 0.4312 | 0.1943 | 0.0529 | 0.0032 | 0.0000 | ||||||||||||||||||||||||||||||||||||
March 15, 2022 |
4.1408 | 3.1640 | 2.3400 | 1.6400 | 1.0611 | 0.7223 | 0.6145 | 0.2963 | 0.0964 | 0.0041 | 0.0000 | 0.0000 | ||||||||||||||||||||||||||||||||||||
March 15, 2023 |
4.1408 | 3.1640 | 2.2454 | 1.3803 | 0.5637 | 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 $45.00 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 $31.50 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 conversion rate be increased on account of a make-whole fundamental change to exceed 31.7460 shares of our class A common stock per $1,000 principal amount of Notes, subject to adjustments in the same manner as the conversion rate is required to be adjusted as set forth under Description of the NotesConversion RightsConversion Rate Adjustments in the Preliminary Prospectus Supplement.
Original Issue Discount
The notes will be treated as issued with original issue discount (OID) for United States federal income tax purposes, because the issue price (as defined below) of the notes is less than their stated redemption price at maturity (as defined below) by more than a statutorily defined de minimis amount equal to 1/4 of 1% of the notes stated redemption price at maturity multiplied by the number of complete years from its issue date to its maturity. The issue price of the notes equals the first price at which a substantial amount of such notes has been sold (ignoring sales to bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The stated redemption price at maturity of the notes is the total of all payments to be made under the notes other than qualified stated interest. The term qualified stated interest generally means stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually at a single fixed rate. In this case, the stated interest payments on the notes are qualified stated interest and accordingly, the stated redemption price at maturity of the notes will equal the principal amount of the notes.
A United States holder (as defined in Material United States Federal Income Tax Considerations in the Preliminary Prospectus Supplement) must include OID in income as ordinary interest for United States federal income tax purposes as it accrues under a constant yield method in advance of receipt of the cash payments attributable to such income, regardless of such United States holders regular method of tax accounting. In general, the amount of OID included in income by an initial United States holder of a note will equal the sum of the daily portions of OID with respect to such note for each day during the taxable year (or portion of the taxable year) on which such United States holder held such note. The daily portion of OID on any note is determined by allocating to each day in any accrual period a ratable portion of the OID allocable to that accrual period. An accrual period may be of any length and the accrual periods may vary in length over the term of the note, provided that each accrual period is no longer than one year and each scheduled payment of principal or interest occurs either on the final day of an accrual period or on the first day of an accrual period. The amount of OID allocable to each accrual period is generally equal to the difference between (i) the product of the notes adjusted issue price at the beginning of such accrual period and its yield to maturity (determined on the basis of compounding at the close of each accrual period and appropriately adjusted to take into account the length of the particular accrual period) and (ii) the amount of any qualified stated interest payments allocable to such accrual period. The adjusted issue price of a note at the beginning of any accrual period is the sum of the issue price of the note plus the amount of OID allocable to all prior accrual periods minus the amount of any prior payments on the note that were not qualified stated interest payments. A notes yield to maturity is the discount rate that, when used in computing the present value (as of the issue date) of all payments to be made on the note, produces an amount equal to the notes issue price. Under these rules, United States holders generally will have to include in income increasingly greater amounts of OID in successive accrual periods.
United States holders may generally, upon election, include in income all interest (including stated interest and OID) that accrues on a note by using the constant yield method applicable to OID, subject to certain limitations and exceptions. Because this election will affect how the United States holder treats debt instruments other than the notes, it should be made only in consultation with a tax advisor.
For additional United States federal income tax considerations please see Material United States Federal Income Tax Considerations in the Preliminary Prospectus Supplement. Holders should consult their own tax advisors regarding the United States federal income tax consequences of ownership of the notes.
General
This communication is intended for the sole use of the person to whom it is provided by the sender.
This communication shall not constitute an offer to sell or the solicitation of an offer to buy securities nor shall there be any sale of these securities in any state in which such solicitation or sale would be unlawful prior to registration or qualification of these securities under the laws of any such state.
The Issuer has filed a registration statement (including a prospectus, dated July 29, 2016) and a Preliminary Prospectus Supplement, dated March 22, 2018, with the Securities and Exchange Commission, or SEC, for the offering of the Notes. Before you invest, you should read the Preliminary Prospectus Supplement, the accompanying prospectus and the other documents the Issuer has filed with the SEC for more complete information about the Issuer and the offering of the Notes. You may get these documents for free by visiting EDGAR on the SECs website at www.sec.gov. Alternatively, the Issuer, the underwriters or any dealer participating in the offering of the Notes will arrange to send you the Preliminary Prospectus Supplement and the accompanying prospectus if you request it by contacting BofA Merrill Lynch at 1-800-294-1322; Barclays Capital Inc. at (888) 603-5847; Citigroup Global Markets Inc. at (800) 831-9146; J.P. Morgan Securities LLC at (866) 803-9204; Morgan Stanley & Co. LLC at (866) 718-1649; Wells Fargo Securities, LLC at (800) 326-5897.
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.
SCHEDULE V
Directors, Officers and Stockholders Subject to Lock-Up:
Signatory |
Lock-Up Form |
|
Michael B. Nash | Exhibit A-1 | |
Stephen D. Plavin | Exhibit A-1 | |
Douglas N. Armer Anthony F. Marone, Jr. |
Exhibit A-1 Exhibit A-1 |
|
Weston Tucker | Exhibit A-1 | |
Leon Volchyok | Exhibit A-1 | |
Thomas C. Ruffing | Exhibit A-1 | |
Leonard W. Cotton | Exhibit A-1 | |
Thomas E. Dobrowski | Exhibit A-1 | |
Martin L. Edelman | Exhibit A-1 | |
Henry N. Nassau | Exhibit A-1 | |
Lynne B. Sagalyn | Exhibit A-1 | |
Jonathan L. Pollack | Exhibit A-1 | |
Blackstone Holdings III L.P. | Exhibit A-2 | |
BXMT Advisors L.L.C. | Exhibit A-2 |
SCHEDULE VI
Qualified REIT subsidiaries:
345-40 Partners, LLC
42-16 Partners, LLC
Capital Trust RE CDO 2004-1 Corp.
Capital Trust RE CDO Depositor Corp.
CT CDO 2004-1 Marcus Avenue Subsidiary LLC
Parlex 1 Finance, LLC
Parlex 2 Finance, LLC
Parlex 2A Finco, LLC
Parlex 3 Finance, LLC
Parlex 4 Finance, LLC
Parlex 5 Finco, LLC
Parlex 5 Ken Finco, LLC
Parlex 6 Finco, LLC
Parlex 7 Finco, LLC
Parlex 9 Finco, LLC
Parlex 10 Finco, LLC
Parlex 10 Lux EUR Finco, S.a r.l. (f.k.a. Parlex 6 Lux Finco, S.a.r.l.)
Parlex 10 Lux EUR Pledgeco, S.a r.l. (f.k.a. 345-Lux Partners, S.a.r.l.)
Parlex 10 Lux GBP Finco, S.a r.l.
Parlex 10 Lux GBP Pledgeco, S.a r.l.
SCHEDULE VII
Taxable REIT subsidiaries:
CT Legacy Cayman, Ltd.
Parlex 15 Lux EUR Pledgeco, S.a r.l.
Victor Holdings I, LLC
[Form of Lock-Up Agreement] | EXHIBIT A-1 |
March 22, 2018
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
One Bryant Park
New York, New York 10036
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed Underwriting Agreement (the Underwriting Agreement) among Blackstone Mortgage Trust, Inc., a Maryland corporation (the Company), and each of you as representative of a group of Underwriters named therein (the Underwriters), relating to an underwritten public offering (the Public Offering) of convertible senior notes.
To induce the Underwriters to continue their efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, it will not, during the period commencing on the date hereof and ending 45 days after the date of the final prospectus relating to the Public Offering (the restricted period), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of class A common stock, par value $0.01 per share, of the Company (the Common Stock) or any securities convertible into or exercisable or exchangeable for Common Stock (including, for the avoidance of doubt, any shares held by a controlled affiliate of the undersigned) or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, 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. The foregoing sentence shall not apply (a) to transactions relating to shares of Common Stock or other securities acquired in open market transactions after the closing of the Public Offering, (b) to transfers as a bona fide gift or gifts, including as a result of the operation of law or estate or intestate succession, (c) in connection with the receipt of securities issued to the undersigned by the Company pursuant to long-term incentive plans existing on the date hereof, the withholding of any shares (Withheld Shares) by the Company in respect of tax liabilities with respect to such issuance or any deemed disposition or sale with respect to such Withheld Shares, (d) to transfers to any parent, grandparent, stepparent, mother-in-law, father-in-law, spouse, former spouse, sibling, sister-in-law, brother-in-law, son-in-law, daughter-in-law, child, stepchild, grandchild, niece or nephew of the undersigned, including adoptive relationships (each, a Family Member) or any dependent of the undersigned, (e) to transfers solely for estate planning purposes to any trust for the direct or indirect benefit of the undersigned or any Family Member or to any corporation, limited liability company, partnership or other entity beneficially owned, directly or indirectly, solely by such trusts, the undersigned or any Family Member, (f) to transfers to a
nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (b) through (e) above, (g) to transfers pursuant to an order of a court or regulatory agency or (h) to dispositions of shares of Common Stock to satisfy tax withholding obligations (including with respect of estimated taxes) in connection with the vesting of restricted stock awards; provided , however , that in the case of any transactions relating to shares of Common Stock or other securities acquired in open market transactions after the closing of the Public Offering pursuant to clause (a) hereunder, no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (Section 16), reporting a reduction in beneficial ownership of shares of Common Stock shall be required or shall be voluntarily made during the restricted period; provided, further, that in the case of any transfer pursuant to clauses (b) through (f) hereunder (i) the donee, trustee, distributee or transferee, as the case may be, agrees to be bound in writing by the restrictions set forth herein and (ii) no filing under Section 16 reporting a reduction in beneficial ownership of shares of Common Stock shall be required or shall be voluntarily made during the restricted period. In addition, the undersigned agrees that, without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, it will not, during the restricted period, make any demand for or exercise any right with respect to the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for shares of Common Stock. The undersigned also agrees and consents to the entry of stop transfer instructions with the Companys transfer agent and registrar against the transfer of the undersigneds shares of Common Stock unless such transfer is in compliance with the foregoing.
The undersigned understands that the Company and the Underwriters are relying upon this Lock-up Agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this Lock-up Agreement is irrevocable and shall be binding upon the undersigneds heirs, legal representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriters. This Lock-up Agreement shall automatically terminate on April 30, 2018 if the Public Offering has not been consummated by that date or the Underwriting Agreement (other than the provisions thereof that survive termination) is terminated.
The restrictions described in this Lock-up Agreement shall not apply to the establishment of a trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, provided that no transfers occur under such plan during the restricted period and no public announcement or filing shall be required or voluntarily made by any person in connection therewith.
This Lock-up Agreement shall be governed by and construed in accordance with the laws of the State of New York.
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[Form of Lock-Up Agreement] | EXHIBIT A-2 |
March 22, 2018
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
One Bryant Park
New York, New York 10036
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed Underwriting Agreement (the Underwriting Agreement) among Blackstone Mortgage Trust, Inc., a Maryland corporation (the Company), and each of you as representative of a group of Underwriters named therein (the Underwriters), relating to an underwritten public offering (the Public Offering) of convertible senior notes.
To induce the Underwriters to continue their efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, it will not, during the period commencing on the date hereof and ending 45 days after the date of the final prospectus relating to the Public Offering (the restricted period), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any shares of class A common stock, par value $0.01 per share, of the Company (the Common Stock) or any securities convertible into or exercisable or exchangeable for Common Stock (including, for the avoidance of doubt, any shares held by a controlled affiliate of the undersigned) or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, 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. The foregoing sentence shall not apply (a) to transactions relating to shares of Common Stock or other securities acquired in open market transactions after the closing of the Public Offering, (b) to transfers as a bona fide gift or gifts, including as a result of the operation of law or estate or intestate succession, (c) to transfers to the undersigneds affiliates or to any investment fund or other entity controlled or managed by the undersigned, (d) to transfers as a distribution to limited partners, members or stockholders of the undersigned, (e) to transfers to any parent, grandparent, stepparent, mother-in-law, father-in-law, spouse, former spouse, sibling, sister-in-law, brother-in-law, son-in-law, daughter-in-law, child, stepchild, grandchild, niece or nephew of the undersigned, including adoptive relationships (each, a Family Member) or any dependent of the undersigned, (f) to transfers solely for estate planning purposes to any trust for the direct or indirect benefit of the undersigned or any Family Member or to any corporation, limited liability company, partnership or other entity beneficially owned, directly or indirectly, solely by such trusts, the undersigned or any Family Member, (g) to transfers to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (b)
through (f) above or (h) to transfers pursuant to an order of a court or regulatory agency; provided , however , that in the case of any transactions relating to shares of Common Stock or other securities acquired in open market transactions after the closing of the Public Offering pursuant to clause (a) hereunder, no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended (Section 16), reporting a reduction in beneficial ownership of shares of Common Stock shall be required or shall be voluntarily made during the restricted period; provided , further , that in the case of any transfer pursuant to clauses (b) through (g) hereunder (i) the donee, trustee, distributee or transferee, as the case may be, agrees to be bound in writing by the restrictions set forth herein and (ii) no filing under Section 16 reporting a reduction in beneficial ownership of shares of Common Stock shall be required or shall be voluntarily made during the restricted period.
In addition, the undersigned agrees that, without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, it will not, during the restricted period, make any demand for or exercise any right with respect to the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for shares of Common Stock. The undersigned also agrees and consents to the entry of stop transfer instructions with the Companys transfer agent and registrar against the transfer of the undersigneds shares of Common Stock unless such transfer is in compliance with the foregoing.
The undersigned understands that the Company and the Underwriters are relying upon this Lock-up Agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this Lock-up Agreement is irrevocable and shall be binding upon the undersigneds heirs, legal representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriters. This Lock-up Agreement shall automatically terminate on April 30, 2018 if the Public Offering has not been consummated by that date or the Underwriting Agreement (other than the provisions thereof that survive termination) is terminated.
The restrictions described in this Lock-up Agreement shall not apply to the establishment of a trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, provided that no transfers occur under such plan during the restricted period and no public announcement or filing shall be required or voluntarily made by any person in connection therewith.
This Lock-up Agreement shall be governed by and construed in accordance with the laws of the State of New York.
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Exhibit 4.2
EXECUTION VERSION
Blackstone Mortgage Trust, Inc.
as Issuer
The Bank of New York Mellon Trust Company, N.A.
as Trustee
Third Supplemental Indenture
Dated as of March 27, 2018
to the Senior Debt Indenture
Dated as of November 25, 2013
4.75% Convertible Senior Notes due 2023
TABLE OF CONTENTS
Page | ||||||
ARTICLE 1 |
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION |
1 | ||||
Section 1.01 |
Scope of Supplemental Indenture |
1 | ||||
Section 1.02 |
Definitions |
1 | ||||
Section 1.03 |
References to Interest |
7 | ||||
ARTICLE 2 |
THE SECURITIES |
7 | ||||
Section 2.01 |
Title and Terms; Payments |
7 | ||||
Section 2.02 |
Forms |
8 | ||||
Section 2.03 |
Transfer and Exchange |
9 | ||||
Section 2.04 |
Payments on the Securities |
11 | ||||
ARTICLE 3 |
REDEMPTIONS AND PURCHASES |
11 | ||||
Section 3.01 |
Amendments to the Base Indenture |
11 | ||||
Section 3.02 |
Purchase at Option of Holders upon a Fundamental Change |
11 | ||||
Section 3.03 |
Effect of Fundamental Change Purchase Notice |
13 | ||||
Section 3.04 |
Withdrawal of Fundamental Change Purchase Notice |
13 | ||||
Section 3.05 |
Deposit of Fundamental Change Purchase Price |
13 | ||||
Section 3.06 |
Securities Purchased in Whole or in Part |
14 | ||||
Section 3.07 |
Covenant To Comply with Applicable Laws upon Purchase of Securities |
14 | ||||
Section 3.08 |
Repayment to the Company |
14 | ||||
ARTICLE 4 |
CONVERSION |
14 | ||||
Section 4.01 |
Right To Convert |
14 | ||||
Section 4.02 |
Conversion Procedures |
16 | ||||
Section 4.03 |
Settlement Upon Conversion |
17 | ||||
Section 4.04 |
Adjustment of Conversion Rate |
19 | ||||
Section 4.05 |
Other Adjustments |
25 | ||||
Section 4.06 |
Adjustment to Conversion Rate Upon Conversion in Connection with a Make-Whole Fundamental Change |
26 | ||||
Section 4.07 |
Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale |
27 | ||||
Section 4.08 |
Stock Issued Upon Conversion |
28 | ||||
Section 4.09 |
Responsibility of Trustee |
28 | ||||
Section 4.10 |
Notice to Holders |
28 | ||||
Section 4.11 |
Limit on Issuance of Shares of Common Stock Upon Conversion |
29 | ||||
ARTICLE 5 |
PARTICULAR COVENANTS OF THE COMPANY |
29 | ||||
Section 5.01 |
Payment of Principal, Interest and Fundamental Change Purchase Price |
29 | ||||
Section 5.02 |
Maintenance of Office or Agency |
30 | ||||
Section 5.03 |
Appointments to Fill Vacancies in Trustees Office |
30 | ||||
Section 5.04 |
Provisions as to Paying Agent |
30 | ||||
Section 5.05 |
Reports |
31 | ||||
Section 5.06 |
Statements as to Defaults |
31 | ||||
Section 5.07 |
Supplementary Interest Notice |
31 | ||||
Section 5.08 |
Covenant to Take Certain Actions |
31 |
ARTICLE 6 |
REMEDIES |
32 | ||||
Section 6.01 |
Amendments to the Base Indenture |
32 | ||||
Section 6.02 |
Events of Default |
32 | ||||
Section 6.03 |
Acceleration; Rescission and Annulment |
32 | ||||
Section 6.04 |
Supplementary Interest |
33 | ||||
Section 6.05 |
Waiver of Past Defaults |
33 | ||||
Section 6.06 |
Control by Majority |
33 | ||||
Section 6.07 |
Limitation on Suits |
33 | ||||
Section 6.08 |
Rights of Holders to Receive Payment and to Convert |
34 | ||||
Section 6.09 |
Collection of Indebtedness; Suit for Enforcement by Trustee |
34 | ||||
Section 6.10 |
Trustee May Enforce Claims Without Possession of Securities |
34 | ||||
Section 6.11 |
Trustee May File Proofs of Claim |
34 | ||||
Section 6.12 |
Restoration of Rights and Remedies |
34 | ||||
Section 6.13 |
Rights and Remedies Cumulative |
35 | ||||
Section 6.14 |
Delay or Omission Not a Waiver |
35 | ||||
Section 6.15 |
Priorities |
35 | ||||
Section 6.16 |
Undertaking for Costs |
35 | ||||
Section 6.17 |
Waiver of Stay, Extension and Usury Laws |
35 | ||||
Section 6.18 |
Notices from the Trustee |
35 | ||||
ARTICLE 7 |
SATISFACTION AND DISCHARGE |
36 | ||||
Section 7.01 |
Inapplicability of Provisions of Base Indenture; Satisfaction and Discharge of the Indenture |
36 | ||||
Section 7.02 |
Deposited Monies to Be Held in Trust by Trustee |
36 | ||||
Section 7.03 |
Paying Agent to Repay Monies Held |
36 | ||||
Section 7.04 |
Return of Unclaimed Monies |
36 | ||||
Section 7.05 |
Reinstatement |
36 | ||||
ARTICLE 8 |
SUPPLEMENTAL INDENTURES |
37 | ||||
Section 8.01 |
Supplemental Indentures Without Consent of Holders |
37 | ||||
Section 8.02 |
Supplemental Indentures With Consent of Holders |
37 | ||||
Section 8.03 |
Notice of Amendment or Supplement |
38 | ||||
ARTICLE 9 |
MISCELLANEOUS |
38 | ||||
Section 9.01 |
Effect on Successors and Assigns |
38 | ||||
Section 9.02 |
Governing Law |
38 | ||||
Section 9.03 |
No Security Interest Created |
38 | ||||
Section 9.04 |
Trust Indenture Act |
38 | ||||
Section 9.05 |
Benefits of Supplemental Indenture |
39 | ||||
Section 9.06 |
Calculations |
39 | ||||
Section 9.07 |
Execution in Counterparts |
39 | ||||
Section 9.08 |
Notices |
39 | ||||
Section 9.09 |
Ratification of Base Indenture |
39 | ||||
Section 9.10 |
The Trustee |
39 | ||||
Section 9.11 |
No Recourse Against Others |
39 |
SCHEDULE
Schedule A Additional Shares
EXHIBIT
Exhibit A Form of Security
THIRD SUPPLEMENTAL INDENTURE (this Supplemental Indenture ), dated as of March 27, 2018, between Blackstone Mortgage Trust, Inc., a Maryland corporation (the Company ), and The Bank of New York Mellon Trust Company, N.A. (the Trustee ), as trustee under the Senior Debt Indenture dated as of November 25, 2013, between the Company and the Trustee (as amended or supplemented from time to time in accordance with the terms thereof, the Base Indenture ).
RECITALS OF THE COMPANY
WHEREAS, the Company executed and delivered the Base Indenture to the Trustee to provide, among other things, for the issuance, from time to time, of the Companys unsecured senior debt Securities, in an unlimited aggregate principal amount, in one or more series to be established by the Company under, and authenticated and delivered as provided in, the Base Indenture;
WHEREAS, Section 9.01(h) of the Base Indenture provides for the Company and the Trustee to enter into supplemental indentures to the Base Indenture to establish the form and terms of Securities of any series as contemplated by Section 2.01 of the Base Indenture;
WHEREAS, the Board of Directors has duly adopted resolutions authorizing the Company to execute and deliver this Supplemental Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company has authorized the creation and issuance under this Supplemental Indenture of its 4.75% Convertible Senior Notes due 2023 (the Securities ), the form and substance of such Securities and the terms, provisions and conditions thereof to be set forth as provided in the Base Indenture and this Supplemental Indenture; and
WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental Indenture, and that all requirements necessary to make (i) this Supplemental Indenture a valid instrument in accordance with its terms, and (ii) the Securities, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company have been performed, and the execution and delivery of this Supplemental Indenture have been duly authorized in all respects.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH, for and in consideration of the premises and the purchases of the Securities by the Holders thereof, it is mutually agreed, for the benefit of the Company and the equal and proportionate benefit of all Holders, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01 Scope of Supplemental Indenture . The changes, modifications and supplements to the Base Indenture effected by this Supplemental Indenture shall be applicable only with respect to, and shall govern only the terms of (and only the rights of the Holders and the obligations of the Company with respect to), the Securities, which may be issued from time to time, and shall not apply to any other securities that may be issued under the Base Indenture (or govern the rights of the Holders or the obligations of the Company with respect to any such other securities) unless a supplemental indenture with respect to such other securities specifically incorporates such changes, modifications and supplements. The provisions of this Supplemental Indenture shall, with respect to the Securities, supersede any corresponding provisions in the Base Indenture. Subject to the preceding sentence, and except as otherwise provided herein, the provisions of the Base Indenture shall apply to the Securities and govern the rights of the Holders of the Securities and the obligations of the Company and the Trustee with respect thereto.
Section 1.02 Definitions . For all purposes of the Indenture, except as otherwise expressly provided or unless the context otherwise requires:
(i) the terms defined in this Article 1 shall have the meanings assigned to them in this Article 1 and include the plural as well as the singular; and
(ii) all words, terms and phrases defined in the Base Indenture (but not otherwise defined herein) shall have the same meanings as in the Base Indenture.
Additional Shares has the meaning specified in Section 4.06(a) hereof.
1
Agent Members has the meaning specified in Section 2.02(c) hereof.
Applicable Procedures means, with respect to any matter at any time, the policies and procedures of the Depositary, if any, that are applicable to such matter at such time.
Base Indenture has the meaning specified in the first paragraph of this Supplemental Indenture, as such instrument may be supplemented from time to time by one or more indentures supplemental thereto, including this Supplemental Indenture, entered into pursuant to the applicable provisions of the Base Indenture, including, for all purposes of the Base Indenture, this Supplemental Indenture and any such other supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern the Base Indenture, this Supplemental Indenture and any other such supplemental indenture, respectively.
Bid Solicitation Agent means the Company or such other Person as may be appointed, from time to time, by the Company to solicit bids for the Trading Price of the Securities in accordance with Section 4.01(b)(2) hereof. Initially, the Bid Solicitation Agent means the Company.
Business Day means, notwithstanding anything to the contrary in Section 1.01 of the Base Indenture, any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or be closed.
Capital Stock means, for any Person, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) the equity of such Person, but excluding any debt securities convertible into or exchangeable for such equity.
Cash Settlement has the meaning specified in Section 4.03(a)(4) hereof.
Clause A Distribution has the meaning specified in Section 4.04(c) hereof.
Clause B Distribution has the meaning specified in Section 4.04(c) hereof.
Clause C Distribution has the meaning specified in Section 4.04(c) hereof.
Close of Business means 5:00 p.m., New York City time.
Combination Settlement has the meaning specified in Section 4.03(a)(4) hereof.
Common Equity of any Person means the Capital Stock of such Person that is generally entitled (a) to vote in the election of directors of such Person or (b) if such Person is not a corporation, to vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.
Common Stock means, subject to Section 4.07, the shares of class A common stock, par value $0.01 per share, of the Company authorized at the date of this instrument as originally executed or shares of any class or classes of common stock resulting from any reclassification or reclassifications thereof.
Company has the meaning specified in the first paragraph of this Supplemental Indenture, and subject to the provisions of Section 10.02 of the Base Indenture, shall include its successors and assigns.
Conversion Agent means the office or agency designated by the Company where Securities may be presented for conversion.
Conversion Date has the meaning specified in Section 4.02(b) hereof.
Conversion Notice has the meaning specified in Section 4.02(b) hereof.
Conversion Price means, in respect of each Security, as of any date, $1,000 divided by the Conversion Rate in effect on such date.
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Conversion Rate means initially 27.6052 shares of Common Stock per $1,000 principal amount of Securities, subject to adjustment as set forth herein.
Custodian means the Trustee, as custodian with respect to the Securities (so long as the Securities constitute Global Securities), or any successor entity.
Daily Conversion Value means, with respect to any Security as to which Cash Settlement or Combination Settlement is applicable, for each of the 25 consecutive VWAP Trading Days during the Observation Period, one-twenty-fifth (1/25th) of the product of (i) the Conversion Rate in effect on such VWAP Trading Day and (ii) the Daily VWAP on such VWAP Trading Day.
Daily Measurement Value has the meaning specified in Section 4.03(a)(6)(A) hereof.
Daily Settlement Amount has the meaning specified in Section 4.03(a)(6) hereof.
Daily VWAP means, with respect to any Security as to which Cash Settlement or Combination Settlement is applicable, for any Trading Day, the per-share volume-weighted average price as displayed under the heading Bloomberg VWAP on Bloomberg page BXMT <equity> AQR (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of the Common Stock on such Trading Day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company). The Daily VWAP 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 with the passage of time or the giving of notice or both would be, an Event of Default.
DTA has the meaning specified in Section 4.04(d) hereof.
Effective Date has the meaning specified in Section 4.06(c) hereof.
Event of Default has the meaning, notwithstanding anything to the contrary in Section 1.01 of the Base Indenture, specified in Section 6.02 hereof.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Ex-Dividend Date means the first date on which shares of the Common Stock trade on the Relevant Exchange, regular way, without the right to receive the issuance, dividend or distribution in question from the Company or, if applicable, from the seller of the Common Stock on the Relevant Exchange (in the form of due bills or otherwise) as determined by the Relevant Exchange.
Final Conversion Period means the period beginning on, and including, the 35th Scheduled Trading Day immediately preceding the Maturity Date, and ending at the Close of Business on the second Scheduled Trading Day immediately prior to the Maturity Date.
Form of Assignment and Transfer means the Form of Assignment and Transfer attached as Attachment 3 to the Form of Security attached hereto as Exhibit A .
Form of Fundamental Change Purchase Notice means the Form of Fundamental Change Purchase Notice attached as Attachment 2 to the Form of Security attached hereto as Exhibit A .
Form of Notice of Conversion means the Form of Notice of Conversion attached as Attachment 1 to the Form of Security attached hereto as Exhibit A .
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Fundamental Change shall be deemed to have occurred at the time after the Securities are originally issued if any of the following occurs:
(1) the consummation of any transaction (including, without limitation, any merger or consolidation other than those excluded under clause (2) below) the result of which is that any person or group (within the meaning of Section 13(d) of the Exchange Act) becomes the direct or indirect ultimate 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 Common Equity;
(2) the consummation of (x) any consolidation or merger between the Company and another Person or (y) any sale or other disposition in one transaction or a series of related transactions of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to another Person (other than any of the Companys Subsidiaries), in each case pursuant to which the Common Stock shall be converted into cash, securities or other property, other than a transaction (i) that results in the holders of all classes of the Companys Common Equity immediately prior to such transaction owning, directly or indirectly, as a result of such transaction, more than 50% of the surviving corporation or transferee or the parent thereof immediately after such event, or (ii) effected solely to change the Companys jurisdiction of incorporation or to form a holding company for the Company and that results in a share exchange or reclassification or similar exchange of the outstanding Common Stock solely into common shares of the surviving entity;
(3) the Companys stockholders approve any plan or proposal for the liquidation or dissolution of the Company; or
(4) the Common Stock ceases to be listed on The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors);
provided , however , that in the case of a transaction or event described in clause (1) or (2) above, if at least 90% of the consideration received or to be received by holders of the Common Stock (excluding cash payments for fractional shares) in the transaction or transactions that would otherwise constitute a Fundamental Change consists of shares of common stock or common equity interests that are traded on The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or that will be so traded when issued or exchanged in connection with the transaction that would otherwise constitute a Fundamental Change under clause (1) or (2) above ( Publicly Traded Securities ), and as a result of such transaction or transactions, such Publicly Traded Securities, excluding cash payments for fractional shares, become Reference Property for the Securities, such event shall not be a Fundamental Change.
Fundamental Change Company Notice has the meaning specified in Section 3.02(b) hereof.
Fundamental Change Expiration Time has the meaning specified in Section 3.02(a) hereof.
Fundamental Change Purchase Date has the meaning specified in Section 3.02(a) hereof.
Fundamental Change Purchase Notice has the meaning specified in Section 3.02(a) hereof.
Fundamental Change Purchase Price has the meaning specified in Section 3.02(a) hereof.
Global Security means a Security which is executed by the Company and authenticated and delivered to the Depositary or its nominee, all in accordance with the Indenture and pursuant to a Company Order, which shall be registered in the name of the Depositary or its nominee and which shall represent the amount of uncertificated Securities as specified therein.
Holder means, notwithstanding anything to the contrary in Section 1.01 of the Base Indenture, the Person in whose name a Security is registered in the Security Register.
Indenture means, notwithstanding anything to the contrary in Section 1.01 of the Base Indenture, the Base Indenture, as originally executed and as supplemented by this Supplemental Indenture, each as may be amended or supplemented from time to time.
Interest Payment Date means, with respect to the payment of interest on the Securities and notwithstanding anything to the contrary in Section 1.01 of the Base Indenture, each March 15 and September 15 of each year, beginning on September 15, 2018.
Issue Date means, with respect to the Securities, March 27, 2018.
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Last Reported Sale Price of the Common Stock for any Trading Day means the closing sale price per share (or, if no closing sale price is reported, the average of the last bid and last ask prices or, if more than one in either case, the average of the average last bid and the average last ask prices) on that Trading Day as reported in composite transactions for the Relevant Exchange. If the Common Stock is not listed for trading on a U.S. national or regional securities exchange on the relevant Trading Day, the Last Reported Sale Price will be the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization. If the Common Stock is not so quoted, the Last Reported Sale Price will be the average of the mid-point of the last bid and last ask prices for the Common Stock on the relevant Trading Day from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose. Any such determination will be conclusive absent manifest error.
Make-Whole Fundamental Change means any event that (i) is a Fundamental Change pursuant to clause (1), (2) or (4) under such definition and determined after giving effect to any exceptions or exclusions to such definition or (ii) would be a Fundamental Change, but for the exclusion in subclause (i) of clause (2) of the definition thereof.
Market Disruption Event means (1) a failure by the Relevant Exchange to open for trading during its regular trading session or (2) the occurrence or existence, prior to 1:00 p.m., New York City time, on any Trading Day for the Common Stock, of an aggregate one half-hour period of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the Relevant Exchange or otherwise) in the Common Stock or in any options or future contracts relating to the Common Stock.
Maturity Date means, with respect to any Security and the payment of the principal amount thereof, March 15, 2023.
Measurement Period has the meaning specified in Section 4.01(b)(2) hereof.
Merger Event has the meaning specified in Section 4.07(a) hereof.
Notice of Default has the meaning specified in Section 6.02(f) hereof.
Observation Period means, with respect to any Security as to which Cash Settlement or Combination Settlement is applicable, the 25 consecutive VWAP Trading Day period beginning on, and including, the third Trading Day immediately following the related Conversion Date; except that Observation Period means, with respect to any Conversion Date occurring during the Final Conversion Period, the 25 consecutive VWAP Trading Day period beginning on, and including, the 27th scheduled VWAP Trading Day immediately preceding the Maturity Date.
Offer Expiration Date has the meaning specified in Section 4.04(e) hereof.
Open of Business means 9:00 a.m., New York City time.
Outstanding means, with respect to the Securities, notwithstanding anything to the contrary in Section 1.01 of the Base Indenture, any Securities authenticated by the Trustee except (i) Securities cancelled by it, (ii) Securities delivered to it for cancellation and (iii)(A) Securities replaced pursuant to Section 2.07 of the Base Indenture, on and after the time such Security is replaced (unless the Trustee and the Company receive proof satisfactory to them that such Security is held by a bona fide purchaser), (B) Securities converted pursuant to Article 4 hereof, on and after their Conversion Date, (C) any and all Securities, as of the Maturity Date, if the Paying Agent holds, in accordance with the Indenture, money sufficient to pay all of the Securities then payable, and (D) any and all Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor, except that in determining whether the Trustee shall be protected in relying upon any request, demand, authorization, direction, notice consent or waiver or other action that is to be made by a requisite principal amount of Outstanding Securities, only such Securities which a Responsible Officer of the Trustee knows to be so owned shall be disregarded.
Paying Agent has the meaning set forth in the Base Indenture and shall be the Person authorized by the Company to pay the principal amount of, interest on, or Fundamental Change Purchase Price of, any Securities on behalf of the Company.
Physical Securities means any non-Global Security issued pursuant to Section 2.03 hereof that is in definitive, fully-registered form, without interest coupons.
Physical Settlement has the meaning specified in Section 4.03(a)(4) hereof.
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Prospectus means the Prospectus of the Company dated July 26, 2013.
Prospectus Supplement means the Prospectus Supplement of the Company, dated March 22, 2018, to the Prospectus, relating to the offering and sale of the Securities.
Publicly Traded Securities has the meaning specified in this Section 1.02.
Regular Record Date means, with respect to any Interest Payment Date, the March 1 (whether or not a Business Day) or the September 1 (whether or not a Business Day), as the case may be, immediately preceding such Interest Payment Date (whether or not such date is a Business Day).
Reference Property has the meaning specified in Section 4.07(a) hereof.
Relevant Exchange means The New York Stock Exchange, or, if the Common Stock (or other security for which a Last Reported Sale Price must be determined) is not then listed on The New York Stock Exchange, on the principal other U.S. national or regional securities exchange on which the Common Stock (or such other security) is then listed or, if the Common Stock (or such other security) is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock (or such other security) is then traded.
Reporting Event of Default has the meaning specified in Section 6.04(a) hereof.
Scheduled Trading Day means a day that is scheduled to be a Trading Day on the Relevant Exchange. If the Common Stock is not listed on any U.S. national or regional securities exchange, Scheduled Trading Day means a Business Day.
Security or Securities has the meaning specified in the fourth paragraph of the Recitals of this Supplemental Indenture, notwithstanding anything to the contrary in Section 1.01 of the Base Indenture.
Settlement Amount has the meaning specified in Section 4.03(a) hereof.
Settlement Method has the meaning specified in Section 4.03(a)(2) hereof.
Settlement Notice has the meaning specified in Section 4.03(a)(4) hereof.
Significant Subsidiary means, with respect to any Person, a Subsidiary of such Person that would constitute a significant subsidiary as such term is defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as in effect on the original date of issuance of the Securities.
Specified Dollar Amount has the meaning specified in Section 4.03(a)(6)(A) hereof.
Spin-Off has the meaning specified in Section 4.04(c) hereof.
Stock Price has the meaning specified in Section 4.06(c) hereof.
Supplemental Indenture has the meaning specified in the first paragraph hereof, as such instrument may be supplemented from time to time by one or more indentures supplemental thereto, entered into pursuant to the applicable provisions of the Base Indenture and the Supplemental Indenture, including, for all purposes of this Supplemental Indenture and any such other supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern the Base Indenture, this Supplemental Indenture and any other such supplemental indenture, respectively.
Supplementary Interest has the meaning specified in Section 6.04(a) hereof.
Trading Day means a Scheduled Trading Day on which (i) trading in the Common Stock (or other security for which a Last Reported Sale Price must be determined) generally occurs on the Relevant Exchange and (ii) a Last Reported Sale Price for the Common Stock (or such other security) is available on the Relevant Exchange. If the Common Stock (or such other security) is not so listed or traded, Trading Day means a Business Day.
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Trading Price of the Securities on any date of determination means the average of the secondary market bid quotations obtained by the Bid Solicitation Agent for $2.0 million principal amount of the Securities at approximately 3:30 p.m., New York City time, on such date of determination from three independent nationally recognized securities dealers selected by the Company; provided that, if three such bids cannot reasonably be obtained by the Bid Solicitation Agent but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Bid Solicitation Agent, that one bid shall be used. If the Bid Solicitation Agent cannot reasonably obtain at least one bid for $2.0 million principal amount of the Securities from a nationally recognized securities dealer, then the Trading Price per $1,000 principal amount of Securities will be deemed to be less than 98% of the product of (i) the Last Reported Sale Price of the Common Stock on such date of determination and (ii) the Conversion Rate in effect on such determination date. Any such determination will be conclusive absent manifest error. If the Company does not so instruct the Bid Solicitation Agent (if other than the Company) to obtain bids when required, or the Bid Solicitation Agent fails to solicit bids when required, the Trading Price per $1,000 principal amount of the Securities will be deemed to be less than 98% of the product of (i) Last Reported Sale Price of the Common Stock on such determination date and (ii) the Conversion Rate in effect on such determination date for each Trading Day on which the Company or the Bid Solicitation Agent fails to do so.
Trigger Event has the meaning specified in Section 4.04(c) hereof.
Trustee means the Person named as the Trustee in the first paragraph of this Supplemental Indenture until a successor Trustee shall have become such pursuant to the applicable provisions of the Base Indenture and this Supplemental Indenture, and thereafter Trustee shall mean or include each Person who is then a Trustee hereunder.
Underwriters means Merrill Lynch, Pierce, Fenner & Smith Incorporated, as representative of the several underwriters relating to the initial public offering of Securities.
Unit of Reference Property has the meaning specified in Section 4.07(a) hereof.
U.S. or United States means the United States of America.
Valuation Period has the meaning specified in Section 4.04(c) hereof.
VWAP 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 Relevant Exchange, provided that if the Common Stock is not listed on any U.S. national or regional securities exchange, VWAP Trading Day means a Business Day.
Section 1.03 References to Interest . Any reference to interest on, or in respect of, any Security in the Indenture shall be deemed to include Supplementary Interest if, in such context, Supplementary Interest is, was or would be payable pursuant to Section 6.04. Any express mention of the payment of Supplementary Interest in any provision hereof shall not be construed as excluding Supplementary Interest in those provisions hereof where such express mention is not made.
ARTICLE 2
THE SECURITIES
Section 2.01 Title and Terms; Payments .
(a) Establishment; Designation . Pursuant to Section 2.01 of the Base Indenture, there is hereby established and authorized a new series of Securities under the Indenture, which series of Securities shall be designated the 4.75% Convertible Senior Notes due 2023.
(b) Initial Issuance . Subject to Section 2.01(c) hereof, the aggregate principal amount of Securities that may initially be authenticated and delivered under the Indenture is limited to $220,000,000 (or $253,000,000 if the Underwriters exercise their option to purchase additional Securities solely to cover over-allotments, if any, in full). In addition, the Company may execute, and the Trustee may authenticate and deliver, in each case, in accordance with Section 2.04 of the Base Indenture, an unlimited aggregate principal amount of additional Securities upon the transfer, exchange, purchase or conversion of Securities pursuant to Sections 2.05, 2.06 and 2.07 of the Base Indenture and Sections 3.06 and 4.02 hereof.
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(c) Further Issues . The Company may, without notice to or the consent of the Holders, issue additional Securities under the Indenture with the same terms and the same CUSIP number as the Securities initially issued under the Indenture in an unlimited aggregate principal amount; provided , that the Company may issue such additional Securities only if they are part of the same issue as the Securities initially issued hereunder for United States federal income tax purposes, provided further , that the Company may issue additional Securities that are not fungible with the Securities for United States federal income tax purposes only if issued under a different CUSIP number. Any such additional Securities will, for all purposes of the Indenture, including waivers, amendments and offers to purchase, be treated as part of the same series as the Securities initially issued under the Indenture.
(d) Purchases . The Company and its Subsidiaries may from time to time repurchase Securities in open market purchases, negotiated transactions or otherwise without giving prior notice to or obtaining any consent of the Holders. Any Securities purchased by the Company or any of its Subsidiaries pursuant to the foregoing sentence or otherwise will be retired and will no longer be Outstanding under the Indenture.
(e) Denominations . Notwithstanding Section 2.03 of the Base Indenture, the Securities will be issued only in minimum denominations of $1,000 and integral multiples of $1,000 in excess thereof.
Section 2.02 Forms .
(a) In General . Pursuant to Section 2.02 of the Base Indenture, the Securities will be substantially in the forms set forth in Exhibit A hereto, and may include such 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 by the officers executing such Securities, as evidenced by their execution of the Securities.
Each Security will bear a Trustees certificate of authentication substantially in the form included in Exhibit A hereto. Each Security will also bear the Form of Notice of Conversion, the Form of Fundamental Change Purchase Notice and the Form of Assignment and Transfer.
Any Security that is a Global Security will bear a legend substantially in the form of the legend set forth in Exhibit A hereto and shall also bear the Schedule of Increases and Decreases of Global Security set forth in Annex A to Exhibit A hereto.
The terms and provisions contained in the Securities will constitute, and are hereby expressly made, a part of the Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent that any provision of any Security conflicts with the express provisions of the Indenture, the provisions of the Indenture will govern and control.
(b) Initial and Subsequent Form of Securities . The Company hereby initially appoints The Depository Trust Company as the Depositary for the Securities, which initially shall be issued in the form of one or more Global Securities without interest coupons (i) registered in the name of Cede & Co., as nominee of the Depositary, and (ii) delivered to the Trustee as custodian for the Depositary.
So long as the Securities are eligible for book-entry settlement with the Depositary, unless otherwise required by law, and except to the extent provided in Section 2.03(c)(1) through (3) hereof, all Securities will be represented by one or more Global Securities.
(c) Global Securities . Each Global Security will represent the aggregate principal amount of the then Outstanding Securities endorsed thereon and provide that it represents such aggregate principal amount of the then Outstanding Securities, which aggregate principal amount may, from time to time, be reduced or increased to reflect transfers, exchanges, conversions or purchases by the Company.
Only the Trustee, or the Custodian holding such Global Security for the Depositary, at the direction of the Trustee, may endorse a Global Security to reflect the amount of any increase or decrease in the aggregate principal amount of the then Outstanding Securities represented thereby, and whenever the Holder of a Global Security delivers instructions to the Trustee to increase or decrease the aggregate principal amount of the then Outstanding Securities represented by a Global Security in accordance with the Indenture and the Applicable Procedures, the Trustee, or the Custodian holding such Global Security for the Depositary, at the direction of the Trustee, will endorse such Global Security to reflect such increase or decrease in the aggregate principal amount of the
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then Outstanding Securities represented thereby. None of the Trustee, the Company or any agent of the Trustee or the Company will have any responsibility or bear any liability for any aspect of the records relating to or payments made on account of the ownership of any beneficial interest in a Global Security or with respect to maintaining, supervising or reviewing any records relating to such beneficial interest.
Members of, or participants in, the Depositary ( Agent Members ) shall have no rights under the Indenture with respect to any Global Security held on their behalf by the Depositary, or the Trustee as its custodian, or under the Global Security, and Cede & Co., or such other Person designated by the Depositary as its nominee, may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of any Holder.
Section 2.03 Transfer and Exchange .
(a) In General . Notwithstanding anything to the contrary in Section 2.05 of the Base Indenture, the Company is not required to transfer or exchange any Securities or portions thereof that have been surrendered for purchase in accordance with Article 3 hereof (unless the related Fundamental Change Purchase Notice is withdrawn in accordance with the provisions of Section 3.04) or for conversion in accordance with Article 4 hereof, and a written form of transfer substantially in the form of the Form of Assignment and Transfer will be deemed to be written instrument of transfer satisfactory to the Company and the Security Registrar.
At such time as all interests in a Global Security have been purchased, converted, cancelled or exchanged for Securities in certificated form, such Global Security shall, upon receipt thereof, be canceled by the Trustee in accordance with standing procedures and instructions existing between the Depositary and the Custodian for the Global Security. At any time prior to such cancellation, if any interest in a Global Security is purchased, converted, cancelled or exchanged for Securities in certificated form, the principal amount of such Global Security shall, in accordance with the standing procedures and instructions existing between the Depositary and the Custodian for the Global Security, be appropriately reduced, and an endorsement shall be made on such Global Security, by the Trustee or the Custodian for the Global Security, at the direction of the Trustee, to reflect such reduction.
(b) Global Securities . Notwithstanding anything to the contrary in Section 2.11 of the Base Indenture, every transfer and exchange of a beneficial interest in a Global Security will be effected through the Depositary in accordance with the Applicable Procedures and the provisions of the Indenture, and each Global Security may be transferred only as a whole and only (A) by the Depositary to a nominee of the Depositary, (B) by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or (C) by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.
(c) Holders Deemed Owners . Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any interest (subject to Section 2.03 of the Base Indenture) on such Security at the Maturity Date, in connection with a Fundamental Change, upon any conversion and for all other purposes whatsoever, including delivery of shares of Common Stock on conversion, for distribution of notices to such Holders or solicitations of their consent, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
(d) Notwithstanding anything to the contrary in Section 2.11 of the Base Indenture:
(1) Each Global Security will be exchanged for Physical Securities if the Depositary delivers notice to the Company that the Depositary is unwilling, unable or no longer permitted under applicable law to continue to act as Depositary, and, in each case, the Company promptly delivers a copy of such notice to the Trustee and the Company fails to appoint a successor Depositary within 90 days after receiving notice from the Depositary.
(2) If an Event of Default has occurred and is continuing, any owner of a beneficial interest in a Global Security may exchange such beneficial interest for Physical Securities by delivering a written request to the Security Registrar.
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(3) If the Company notifies the Trustee that it wishes to terminate and exchange all or part of a Global Security for Physical Securities and the beneficial owners of the majority of the principal amount of such Global Security (or portion thereof) to be exchanged consent to such exchange, the Company may exchange all beneficial interests in such Global Security (or portion thereof) for Physical Securities by delivering a written request to the Security Registrar.
In the case of an exchange for Physical Securities under clause (1) above:
(A) each Global Security will be deemed surrendered to the Trustee for cancellation;
(B) the Trustee will cause each Global Security to be cancelled in accordance with the Applicable Procedures; and
(C) the Company, in accordance with Section 2.04 of the Base Indenture, will promptly execute, and, upon receipt of a Company Request, the Trustee, in accordance with Section 2.04 of the Base Indenture, will promptly authenticate and deliver, for each beneficial interest in each Global Security so exchanged, an aggregate principal amount of Physical Securities equal to the aggregate principal amount of such beneficial interest, registered in such names and in such authorized denominations as the Depositary specifies, and bearing any legends that such Physical Securities are required to bear under the Indenture.
In the case of an exchange for Physical Securities under clause (2) above:
(A) the Security Registrar will deliver notice of such request to the Company and the Trustee, which notice will identify the owner of the beneficial interest to be exchanged, the aggregate principal amount of such beneficial interest and the CUSIP of the relevant Global Security, in each case if and as such information is provided to the Security Registrar by the Depositary;
(B) the Company, in accordance with Section 2.04 of the Base Indenture, will promptly execute, and, upon receipt of a Company Request, the Trustee, in accordance with Section 2.04 of the Base Indenture, will promptly authenticate and deliver to such owner, for the beneficial interest so exchanged by such owner, Physical Securities registered in such owners name having an aggregate principal amount equal to the aggregate principal amount of such beneficial interest and bearing any legends that such Physical Securities are required to bear under the Indenture; and
(C) the Security Registrar, in accordance with the Applicable Procedures, will cause the principal amount of such Global Security to be decreased by the aggregate principal amount of the beneficial interest so exchanged. If all of the beneficial interests in a Global Security are so exchanged, such Global Security will be deemed surrendered to the Trustee for cancellation, and the Trustee will cause such Global Security to be cancelled in accordance with the Applicable Procedures.
In the case of an exchange for Physical Securities under clause (3) above:
(A) the Company will deliver notice of such request to the Security Registrar and the Trustee, which notice will identify each owner of a beneficial interest to be exchanged, the aggregate principal amount of each such beneficial interest and the CUSIP of the relevant Global Security;
(B) the Company, in accordance with Section 2.04 of the Base Indenture, will promptly execute, and, upon receipt of a Company Request, the Trustee, in accordance with Section 2.04 of the Base Indenture, will promptly authenticate and deliver to each such beneficial owner, Physical Securities registered in such beneficial owners name having an aggregate principal amount equal to the aggregate principal amount of its exchanged beneficial interest and bearing any legends that such Physical Securities are required to bear under the Indenture and any applicable law; and
(C) the Security Registrar, in accordance with the Applicable Procedures, will cause the principal amount of each relevant Global Security to be decreased by the aggregate principal amount of the beneficial interests so exchanged. If all of the beneficial interests in a Global Security are so exchanged, such Global Security will be deemed surrendered to the Trustee for cancellation, and the Trustee will cause such Global Security to be cancelled in accordance with the Applicable Procedures.
In each of the cases described in clauses (1), (2) and (3) above, the Company may rely on the Depositary to provide all names of beneficial owners and their respective principal amounts beneficially owned and may issue Physical Securities registered in the names and amounts so provided by the Depositary.
(e) Physical Securities . Except to the extent otherwise provided in Section 2.03(a) hereof, Physical Securities may be transferred or exchanged in accordance with Section 2.05 of the Base Indenture.
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Section 2.04 Payments on the Securities .
(a) In General . Each Security will accrue interest at a rate equal to 4.75% per annum from the most recent date to which interest has been paid or duly provided for, or, if no interest has been paid or duly provided for, the Issue Date. Interest on a Security will cease to accrue upon the earliest of the Maturity Date, subject to the provisions of Article 3 hereof, any Fundamental Change Purchase Date for such Security, and subject to the provisions of Article 4 hereof, any Conversion Date for such Security. Interest on any Security will be payable semi-annually in arrears on each Interest Payment Date, beginning September 15, 2018, to the Holder of such Security as of the Close of Business on the Regular Record Date immediately preceding the applicable Interest Payment Date. As provided in Section 2.03 of the Base Indenture, interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. Pursuant to Section 6.04 hereof, in certain circumstances, the Company may be obligated to pay Holders Supplementary Interest.
The Securities will mature on the Maturity Date, and on the Maturity Date, each Holder of a then Outstanding Security will be entitled on such date to receive $1,000 in cash for each $1,000 in principal amount of then Outstanding Securities held, together with accrued and unpaid interest to, but not including, the Maturity Date on such then Outstanding Securities (except that accrued and unpaid interest will be paid on the Maturity Date to Holders of record on the related Regular Record Date).
Notwithstanding anything to the contrary, if the Maturity Date or any Interest Payment Date or Fundamental Change Purchase Date or any Conversion Date falls, or if any payment, delivery, notice or other action by the Company is otherwise due, on a day that is not a Business Day, then any action to be taken on such date need not be taken on such date, but may be taken on the immediately following Business Day with the same force and effect as if taken on such date, and no additional interest will accrue and no Default shall occur on account of such delay.
(b) Method of Payment . The Company will pay the principal of, the Fundamental Change Purchase Price for, and any cash portion of the Settlement Amount with respect to, any Physical Security to the Holder of such Security in cash at the designated office of the Paying Agent in the borough of Manhattan in The City of New York, New York, prior to 10:00 a.m. on the relevant payment or settlement date, as the case may be. The Company will pay any interest on any Physical Security to the Holder of such Security (i) if such Holder holds $5,000,000 or less aggregate principal amount of Securities, by check mailed to such Holders registered address, and (ii) if such Holder holds more than $5,000,000 aggregate principal amount of Securities, (A) by check mailed to such Holders registered address or, (B) if such Holder delivers to the Security Registrar a written request that the Company make such payments by wire transfer to an account of such Holder within the United States, for each interest payment corresponding to each Regular Record Date occurring during the period beginning on the date on which such Holder delivered such request and ending on the date, if any, on which such Holder delivers to the Security Registrar a written instruction to the contrary, by wire transfer of immediately available funds to the account specified by such Holder.
The Company will pay the principal of, interest on, the Fundamental Change Purchase Price for, and any cash portion of the Settlement Amount with respect to, any Global Security to the Depositary by wire transfer of immediately available funds on the relevant payment date in accordance with Applicable Procedures.
(c) Defaulted Payments . The Company shall pay any interest on the Securities that is payable, but is not punctually paid or duly provided for, on the applicable Interest Payment Date, in accordance with Section 2.03 of the Base Indenture. Interest on any such interest amounts not paid or provided for shall accrue interest at the rate of interest for the Securities.
ARTICLE 3
REDEMPTIONS AND PURCHASES
Section 3.01 Amendments to the Base Indenture .
(a) No Redemption and No Sinking Fund . Article III of the Base Indenture shall not apply with respect to the Securities.
Section 3.02 Purchase at Option of Holders upon a Fundamental Change . (a) If a Fundamental Change occurs, then each Holder shall have the right, at such Holders option, to require the Company to purchase for cash all of such Holders Securities, or any portion thereof such that the principal amount that remains outstanding of each Security that is not purchased in full equals $1,000 or an integral multiple of $1,000 in excess thereof, on a date (the Fundamental Change Purchase Date ) specified by the
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Company that is not less than 20 calendar days or more than 35 calendar days following the date of the Fundamental Change Company Notice, at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to, but excluding, the Fundamental Change Purchase Date (the Fundamental Change Purchase Price ); provided , however , that if the Company purchases a Security on a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the Interest Payment Date corresponding to such Regular Record Date, the Company shall instead pay the full amount of accrued and unpaid interest on such Security on the Interest Payment Date to the Holder of record of such Security as of such Regular Record Date and the Fundamental Change Purchase Price shall be equal to 100% of the principal amount of the Securities to be purchased.
Purchases of Securities under this Section 3.02 shall be made, at the option of the Holder thereof, upon:
(1) if the Securities to be purchased are Physical Securities, delivery to the Paying Agent by the Holder of a duly completed notice (the Fundamental Change Purchase Notice ) in the form set forth in Attachment 2 to the Form of Security attached hereto as Exhibit A and of the Securities, duly endorsed for transfer, on or before the Close of Business on the Business Day immediately preceding the Fundamental Change Purchase Date, subject to extensions to comply with applicable law (the Fundamental Change Expiration Time ); and
(2) if the Securities to be purchased are Global Securities, delivery of the Securities, by book-entry transfer, in compliance with the Applicable Procedures of the Depositary and the satisfaction of any other requirements of the Depositary in connection with tendering beneficial interests in a Global Security for purchase, by the Fundamental Change Expiration Time.
The Fundamental Change Purchase Notice in respect of any Securities to be purchased shall state:
(1) if certificated, the certificate numbers of such Securities;
(2) the portion of the principal amount of such Securities, which must be such that the principal amount that is not to be purchased of each Security that is not to be purchased in full equals $1,000 or an integral multiple of $1,000 in excess thereof; and
(3) that such Securities are to be purchased by the Company pursuant to the applicable provisions of the Securities and the Indenture.
Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Fundamental Change Purchase Notice contemplated by this Section 3.02 shall have the right to withdraw, in whole or in part, such Fundamental Change Purchase Notice at any time prior to the Fundamental Change Expiration Time by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 3.04.
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) On or before the 20th calendar day after the occurrence of a Fundamental Change, the Company shall provide to all Holders of the Securities, 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 Securities, 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 the information on the Companys website or through such other public medium as the Company may use at that time.
Each Fundamental Change Company Notice shall specify:
(1) the events causing the Fundamental Change;
(2) the date of the Fundamental Change;
(3) the last date on which a Holder of Securities may exercise the purchase right pursuant to this Article 3;
(4) the Fundamental Change Purchase Price;
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(5) the Fundamental Change Purchase Date;
(6) the name and address of the Paying Agent and the Conversion Agent, if applicable;
(7) the applicable Conversion Rate and any adjustments to the applicable Conversion Rate, if applicable;
(8) that the Securities 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 terms of the Indenture, if applicable; and
(9) the procedures that Holders must follow to require the Company to purchase their Securities.
No failure of the Company to give the foregoing notices and no defect therein shall limit the purchase rights of the Holders of Securities or affect the validity of the proceedings for the purchase of the Securities pursuant to this Section 3.02.
(c) Notwithstanding the foregoing, there shall be no purchase of any Securities pursuant to this Section 3.02 if the principal amount of the Securities has been accelerated, and such acceleration has not been rescinded, on or prior to the Fundamental Change Purchase Date (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Purchase Price with respect to such Securities). The Paying Agent will promptly return to the respective Holders thereof any Physical Securities held by it during the acceleration of the Securities (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Purchase Price with respect to such Securities) and shall deem to be cancelled any instructions for book-entry transfer of the Securities in compliance with the procedures of the Depositary, in which case, upon such return or cancellation, as the case may be, the Fundamental Change Purchase Notice with respect thereto shall be deemed to have been withdrawn.
Section 3.03 Effect of Fundamental Change Purchase Notice . Upon receipt by the Paying Agent of a Fundamental Change Purchase Notice specified in Section 3.02, the Holder of the Security in respect of which such Fundamental Change Purchase Notice was given shall (unless such Fundamental Change Purchase Notice is withdrawn in accordance with Section 3.04) thereafter be entitled to receive solely the Fundamental Change Purchase Price in cash with respect to such Security (and any previously accrued and unpaid interest on such Security). 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 applicable Fundamental Change Purchase Date (provided the conditions in Section 3.02 have been satisfied) and (y) the time of delivery or book-entry transfer of such Security to the Paying Agent by the Holder thereof in the manner required by Section 3.02, subject in each case to extensions to comply with applicable law.
Section 3.04 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 Fundamental Change Expiration Time, specifying:
(1) the principal amount of the Securities with respect to which such notice of withdrawal is being submitted;
(2) if Physical Securities have been issued, the certificate numbers of the withdrawn Securities; and
(3) the principal amount, if any, of each Security that remains subject to the Fundamental Change Purchase Notice, which must be such that the principal amount not to be purchased equals $1,000 or an integral multiple of $1,000 in excess thereof;
provided , however , that if the Securities are Global Securities, the notice must comply with Applicable Procedures of the Depositary.
The Paying Agent will promptly return to the respective Holders thereof any Physical Securities with respect to which a Fundamental Change Purchase Notice has been withdrawn in compliance with the provisions of this Section 3.04.
Section 3.05 Deposit of Fundamental Change Purchase Price . Prior to 10:00 a.m., New York City time, on the Fundamental Change Purchase Date, the Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of them is acting as the Paying Agent, shall segregate and hold in trust as provided herein) an amount of money (in immediately available funds if deposited on such Business Day) sufficient to pay the Fundamental Change Purchase Price of all the
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Securities or portions thereof that are to be purchased as of the Fundamental Change Purchase Date. If the Paying Agent holds cash sufficient to pay the Fundamental Change Purchase Price of the Securities for which a Fundamental Change Purchase Notice has been tendered and not withdrawn in accordance with the Indenture on the Fundamental Change Purchase Date, then as of such Fundamental Change Purchase Date, (a) such Securities will cease to be Outstanding and interest will cease to accrue thereon (whether or not book-entry transfer of such Securities is made or such Securities 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 Securities).
Section 3.06 Securities Purchased in Whole or in Part . Any Security 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 Securities, 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 Trustee shall authenticate and deliver to the Holder of such Security, without service charge, a new Security or Securities, 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 Security so surrendered that is not purchased. Any Holder whose Securities are purchased pursuant to this Article 3 shall receive payment of the Fundamental Change Purchase Price on the later of (i) the Fundamental Change Purchase Date or (ii) the time of book-entry transfer or the delivery of the Securities so purchased.
Section 3.07 Covenant To Comply with Applicable Laws upon Purchase of Securities . In connection with any offer to purchase Securities under Section 3.02, the Company shall, in each case if required by law, (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 any other U.S. federal or state securities laws applicable to the Company in connection with such purchase offer, in each case, so as to permit the rights and obligations under Section 3.02 to be exercised in the time and in the manner specified in Section 3.02.
Section 3.08 Repayment to the Company . To the extent that the aggregate amount of cash deposited by the Company pursuant to Section 3.05 exceeds the aggregate Fundamental Change Purchase Price of the Securities 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.
ARTICLE 4
CONVERSION
Section 4.01 Right To Convert . (a) Subject to and upon compliance with the provisions of the Indenture, each Holder shall have the right, at such Holders option, to convert its Securities, or any portion of its Securities such that the principal amount that remains Outstanding of each Security that is not converted in full equals $1,000 or an integral multiple of $1,000 in excess thereof, into the Settlement Amount determined in accordance with Section 4.03(a) hereof, (x) prior to the Close of Business on the Business Day immediately preceding December 15, 2022, only upon satisfaction of one or more of the conditions described in Section 4.01(b) hereof, and (y) on or after December 15, 2022, at any time prior to the Close of Business on the second Scheduled Trading Day immediately preceding the Maturity Date.
(b) (1) A Holder may surrender Securities for conversion during any calendar quarter commencing after June 30, 2018 (and only during such calendar quarter) if the Last Reported Sale Price of the Common Stock for at least 20 Trading Days (whether or not consecutive) during the period of 30 consecutive Trading Days ending on the last Trading Day of the immediately preceding calendar quarter is greater than or equal to 110% of the Conversion Price in effect on each applicable Trading Day.
(2) A Holder may surrender all or a portion of its Securities 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 Securities, as determined following a request by a Holder in accordance with the procedures set forth in this Section 4.01(b)(2), for each Trading Day of such Measurement Period was less than 98% of the product of (i) the Last Reported Sale Price of the Common Stock on such Trading Day and (ii) the Conversion Rate in effect on such Trading Day. The Trading Price shall be determined by the Bid Solicitation Agent pursuant to this Section 4.01(b)(2) and the definition of Trading Price set forth in Section 1.02 hereof. The Company shall provide written notice to the Bid Solicitation Agent (if other than the Company) of the three independent nationally recognized securities dealers selected by the Company in accordance with the definition of Trading Price, along with the appropriate contact information for each. The Bid Solicitation Agent (if other than the Company) shall have no obligation to determine the
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Trading Price of the Securities unless the Company has requested such determination; and the Company shall have no obligation to make such request (or, if the Company is the Bid Solicitation Agent, the Company shall have no obligation to determine the Trading Price of the Securities) unless a Holder of at least $5.0 million in aggregate principal amount of notes requests in writing that it make such a determination and provides it with reasonable evidence that the Trading Price per $1,000 principal amount of Securities would be less than 98% of the product of (i) the Last Reported Sale Price of the Common Stock on such Trading Day and (ii) the Conversion Rate in effect on such Trading Day. At such time, the Company shall instruct the Bid Solicitation Agent (if other than the Company) to determine (or, if the Company is the Bid Solicitation Agent, the Company shall determine) the Trading Price per $1,000 principal amount of the Securities beginning on the next Trading Day and on each successive Trading Day until the Trading Price per $1,000 principal amount of Securities for a Trading Day is greater than or equal to 98% of the product of (i) the Last Reported Sale Price of the Common Stock on such Trading Day and (ii) the Conversion Rate in effect on such Trading Day. Whenever the condition to conversion set forth in this Section 4.01(b)(2) has been met, but was not met on the immediately preceding Trading Day, the Company will so notify the Holders and the Trustee. If, at any time after the condition to conversion set forth in this Section 4.01(b)(2) has been met, the condition to conversion set forth in this Section 4.01(b)(2) ceases to be met, the Company will so notify the Holders and the Trustee on the first Trading Day on which such condition ceases to be met.
(3) If the Company elects to (x) issue to all or substantially all holders of the Common Stock rights, options 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 the Common Stock, at a price per share less than the Last Reported Sale Price of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance (taking into account any consideration received by the Company as described in Section 4.04(b)); or (y) distribute to all or substantially all holders of the Common Stock the Companys assets, debt securities or rights to purchase the Companys securities, which distribution (excluding for this purpose a distribution required to avoid the imposition of tax on undistributed income) 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 immediately preceding the date of announcement for such distribution, then, the Company must deliver notice of such issuance or distribution, and of the Ex-Dividend Date for such issuance or distribution, to the Holders at least 30 Scheduled Trading Days prior to the Ex-Dividend Date for such issuance or distribution. Holders may surrender their Securities for conversion at any time during the period beginning on the 30th Scheduled Trading Day immediately prior to the Ex-Dividend Date for such issuance or distribution and ending on the earlier of (a) the Close of Business on the Business Day immediately preceding the Ex-Dividend Date for such issuance or distribution or (b) the Companys announcement that such issuance or distribution will not take place, even if the Securities are not otherwise convertible at such time; provided , however , that Holders may not convert their Securities pursuant to this Section 4.01(b)(3) if the Company provides that Holders shall participate, at the same time and upon the same terms as holders of the Common Stock, and as a result of holding the Securities, in the relevant issuance or distribution without having to convert their Securities as if they held a number of shares of the Common Stock equal to the Conversion Rate in effect on the Ex-Dividend Date for such issuance or distribution multiplied by the principal amount (expressed in thousands) of Securities held by such Holder on the Ex-Dividend Date for such issuance or distribution.
(4) If (i) a Make-Whole Fundamental Change occurs or (ii) the Company is a party to (a) a consolidation, merger or binding share exchange, pursuant to which the Common Stock would be converted into cash, securities or other assets or (b) a sale, conveyance, transfer or lease of all or substantially all of the assets of the Company and its Subsidiaries, on a consolidated basis, to another Person (other than any of the Companys Subsidiaries), the Securities may be surrendered for conversion at any time from or after the date that is 35 Scheduled Trading Days prior to the anticipated Fundamental Change Effective Date or the anticipated effective date of such sale, conveyance, transfer or lease, as the case may be (or, if later, the Business Day after the Company gives notice of such transaction) until the Close of Business (i) if such transaction is a Fundamental Change, on the Business Day immediately preceding the related Fundamental Change Purchase Date, and, (ii) otherwise, on the 35th Business Day immediately following the effective date for such transaction or event. The Company will notify the Holders of any such transaction:
(A) as promptly as practicable following the date the Company publicly announces such transaction but in no event less than 35 Scheduled Trading Days prior to the anticipated effective date of such transaction; or
(B) if the Company does not have knowledge of such transaction at least 35 Scheduled Trading Days prior to the anticipated effective date of such transaction, within three Business Days of the date upon which the Company receives notice, or otherwise becomes aware, of such transaction, but in no event later than the actual effective date of such transaction.
(c) Notwithstanding any other provision of the Securities or the Indenture, no Holder of Securities will be entitled to receive Common Stock following conversion of such Securities to the extent that receipt of such Common Stock would cause such Holder to exceed the ownership limitations contained in the Companys charter.
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(d) If any delivery of shares of Common Stock owed to a Holder upon conversion of Securities is not made, in whole or in part, as a result of the limitations described in Section 4.01(c), the Companys obligation to make such delivery shall not be extinguished and the Company shall deliver such shares as promptly as practicable after any such converting Holder gives notice to the Company that such delivery would not result in it exceeding the ownership limitations in the Companys charter.
Section 4.02 Conversion Procedures .
(a) Each Security shall be convertible at the office of the Conversion Agent and, if applicable, in accordance with the Applicable Procedures of the Depositary.
(b) To exercise the conversion privilege with respect to a beneficial interest in a Global Security, the Holder must complete the appropriate instruction form for conversion pursuant to the Depositarys book-entry conversion program, furnish appropriate endorsements and transfer documents if required by the Company or the Conversion Agent, and pay the funds, if any, required by Section 4.02(f) and any taxes or duties if required pursuant to Section 4.02(g), and the Conversion Agent must be informed of the conversion in accordance with the customary practice of the Depositary.
To exercise the conversion privilege with respect to any Physical Securities, the Holder of such Physical Securities shall:
(1) complete and manually sign a conversion notice in the form set forth in the Form of Notice of Conversion (the Conversion Notice ) or a facsimile of the Conversion Notice;
(2) deliver the Conversion Notice, which is irrevocable, and the Security to the Conversion Agent;
(3) if required, furnish appropriate endorsements and transfer documents,
(4) if required, make any payment required under Section 4.02(f); and
(5) if required, pay all transfer or similar taxes as set forth in Section 4.02(g).
If, upon conversion of a Security, any shares of Common Stock are to be issued to a Person other than the Holder of such Security, the related Conversion Notice shall include such other Persons name and address.
If a Security is subject to a Fundamental Change Purchase Notice, such Security may not be converted unless such Fundamental Change Purchase Notice is withdrawn in accordance with Section 3.04 hereof prior to the relevant Fundamental Change Expiration Time, except to the extent that a portion of such Holders Security is not subject to such Fundamental Change Purchase Notice.
For any Security, the first Business Day on which the Holder of such Security satisfies all of the applicable requirements set forth above with respect to such Security and on which conversion of such Security is not otherwise prohibited under the Indenture shall be the Conversion Date with respect to such Security.
Each conversion shall be deemed to have been effected as to any such Securities (or portion thereof) surrendered for conversion at the Close of Business on the applicable Conversion Date; provided , however , that the Person in whose name the certificate for any shares of Common Stock delivered upon conversion is registered shall be treated as a stockholder of record as of the Close of Business on (i) such Conversion Date (in the case of Physical Settlement) or (ii) the last Trading Day of the applicable Observation Period (in the case of Combination Settlement) except to the extent required by Section 4.04 hereof. At the Close of Business on the Conversion Date for a Security, the converting Holder shall no longer be the Holder of such Security.
(c) Endorsement . Any Securities surrendered for conversion shall, unless shares of Common Stock issuable on conversion are to be issued in the same name as the registration of such Securities, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the Holder or its duly authorized attorney.
(d) Physical Securities . If any Securities in a denomination greater than $1,000 shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of the Securities so surrendered, without charge, new Securities in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Securities.
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(e) Global Securities . Upon the conversion of a beneficial interest in Global Securities, the Conversion Agent shall make a notation in its records as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in writing of any conversions of Securities effected through any Conversion Agent other than the Trustee.
(f) Interest Due Upon Conversion . If a Holder converts a Security after the Close of Business on a Regular Record Date but prior to the Open of Business on the Interest Payment Date corresponding to such Regular Record Date, such Holder must accompany such Security with an amount of cash equal to the amount of interest payable on such Security on the corresponding Interest Payment Date (regardless of whether the converting Holder was the Holder of record on the corresponding Regular Record Date); provided , however , that a Holder need not make such payment (1) if the Conversion Date follows the Regular Record Date immediately preceding the Maturity Date; (2) 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; or (3) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such Security.
(g) Taxes Due upon Conversion . If a Holder converts a Security, the Company will pay any documentary, stamp or similar issue or transfer tax due on the issue of any shares of the Common Stock upon the conversion, unless the tax is due because the Holder requests that any shares be issued in a name other than the Holders name, in which case the Holder will pay that tax.
Section 4.03 Settlement Upon Conversion .
(a) Settlement Amount . Subject to this Section 4.03 and Section 4.06(b), if a Holder converts a Security, the Company shall pay or deliver to such Holder, as the case may be, in respect of each $1,000 principal amount of Securities being converted, solely cash, solely shares of Common Stock (together with cash in lieu of fractional shares as provided herein) or a combination of cash and Common Stock (the Settlement Amount ), at the Companys election, as set forth in this Section 4.03.
(1) The Company shall pay or deliver, as the case may be, the Settlement Amount on the third Trading Day immediately following the last VWAP Trading Day of the Observation Period; provided , that;
(A) if the Company elects to fulfill its conversion obligation solely in shares of Common Stock (together with cash in lieu of fractional shares as provided herein), the Company shall deliver such Common Stock on the third Trading Day immediately following the relevant Conversion Date; and
(B) if prior to the relevant Conversion Date, the Common Stock has been replaced by Reference Property consisting solely of cash, pursuant to Section 4.07, the Company shall pay the cash due upon conversion as set forth in Section 4.07 on the third Trading Day immediately following the relevant Conversion Date.
(2) All conversions during the Final Conversion Period will be settled in the same relative proportions of cash and/or shares of Common Stock (the Settlement Method ).
(3) Prior to the first day of the Final Conversion Period, the Company will elect (or be deemed to have elected) the same Settlement Method for all conversions occurring on any given Conversion Day. Except for any conversions that occur during the Final Conversion Period, the Company need not elect the same Settlement Method with respect to conversions that occur on different Conversion Dates.
(4) With respect to each Conversion Date occurring prior to the Final Conversion Period, the Company shall deliver a notice (each, a Settlement Notice ) of the relevant Settlement Method not later than the Close of Business on the second Trading Day following the related Conversion Date. With respect to each Conversion Date occurring during the Final Conversion Period, the Company shall, prior to the Final Conversion Period, deliver a single Settlement Notice that shall apply to all conversions occurring during the Final Conversion Period. Each such Settlement Notice shall specify whether the Company shall satisfy its conversion obligation by (i) delivering solely shares of Common Stock (together with cash in lieu of fractional shares as provided herein) ( Physical Settlement ), (ii) paying solely cash ( Cash Settlement ) or (iii) paying and delivering, as the case may be, a combination of cash and shares of Common Stock ( Combination Settlement ). In the case of an election that provides for Combination Settlement, the relevant Settlement Notice shall indicate the Specified Dollar Amount. If the Company does not deliver a Settlement Notice within the time periods specified above, or if the Company provides a Settlement Notice within the time periods specified above and elects Combination Settlement but the Settlement Notice does not specify a Specified Dollar Amount, the Company will be deemed to have elected Combination Settlement with a Specified Dollar Amount of $1,000.
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(5) The Settlement Amount in respect of any conversion shall be computed as follows:
(A) if the Company elects to satisfy its conversion obligation in respect of such conversion through Physical Settlement, the Company will deliver to the converting Holder a number of shares of Common Stock equal to (1) (i) the aggregate principal amount of Securities to be converted, divided by (ii) $1,000, multiplied by (2) the then-applicable Conversion Rate on the date the converting Holder becomes a record owner of Common Stock pursuant to the last paragraph of Section 4.02(b) (plus cash in lieu of any fractional shares);
(B) if the Company elects to satisfy its conversion obligation in respect of such conversion through Cash Settlement, the Company shall pay to the converting Holder cash in an amount per $1,000 principal amount of Securities being converted equal to the sum of the Daily Conversion Values for each of the 25 consecutive VWAP Trading Days during the related Observation Period; and
(C) if the Company elects (or is deemed to have elected) to satisfy its conversion obligation in respect of such conversion through Combination Settlement, the Company shall pay and deliver to the converting Holder, as the case may be, in respect of each $1,000 principal amount of Securities being converted, a Settlement Amount equal to the sum of the Daily Settlement Amounts for each of the 25 consecutive VWAP Trading Days during the related Observation Period (plus cash in lieu of any fractional shares).
(6) The Daily Settlement Amount for each of the 25 consecutive VWAP Trading Days of the applicable Observation Period, will consist of:
(A) cash equal to the lesser of (i) a dollar amount per Security to be received upon conversion as specified by the Company in the Settlement Notice (or deemed specified as set forth above) (the Specified Dollar Amount ), if any, divided by 25 (such quotient being referred to as the Daily Measurement Value ) and (ii) the Daily Conversion Value; and
(B) to the extent the Daily Conversion Value for such Trading Day exceeds the Daily Measurement Value for such Trading Day, a number of shares of Common Stock equal to (i) the difference between the Daily Conversion Value and the Daily Measurement Value, divided by (ii) the Daily VWAP of the Common Stock for such VWAP Trading Day.
(7) In the case of Cash Settlement or Combination Settlement, the Settlement Amount or Daily Conversion Values shall be determined by the Company promptly following the last day of the Observation Period. Promptly after such determination, the Company shall notify the Trustee and the Conversion Agent of the Daily Settlement Amounts or the Daily Conversion Values, as the case may be, and the amount of cash deliverable in lieu of fractional shares of Common Stock. The Trustee and the Conversion Agent shall be entitled to rely exclusively on the notice given by the Company and shall have no responsibility for any such determination.
(b) Fractional Shares . Notwithstanding the foregoing, the Company will not issue fractional shares of Common Stock with respect to any converted Security in respect of which shares of Common Stock are deliverable. Instead, if any such shares of Common Stock includes a fraction of a share of Common Stock, the Company will, in lieu of delivering such fraction of a share of Common Stock, pay an amount of cash equal to the product of (i) such fraction of a share and (ii) the Daily VWAP of the Common Stock on the relevant Conversion Date (in the case of Physical Settlement) or on the last Trading Day of the applicable Observation Period (in the case of Combination Settlement), subject in each case to the following paragraph.
If a Holder surrenders more than one Security for conversion on a single Conversion Date, the Company will calculate the amount of cash and the number of shares of Common Stock due with respect to such Securities as if such Holder had surrendered for conversion one Security having an aggregate principal amount equal to the sum of the principal amounts of each of the Securities surrendered for conversion by such Holder on such Conversion Date.
(c) Settlement of Accrued Interest and Deemed Payment of Principal . Subject to Section 4.02(f), if a Holder converts a Security, the Company will not adjust the Conversion Rate to account for any accrued and unpaid interest on such Security and the Companys delivery of the amount of cash and the number of shares of Common Stock, if any, into which a Security is convertible will be deemed to satisfy and discharge in full the Companys obligation to pay the principal of, and accrued and unpaid interest, if
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any, on, such Security to, but excluding, the Conversion Date; provided , however , that if a Holder converts a Security after the Close of Business on a Regular Record Date and prior to the Open of Business on the corresponding Interest Payment Date, the Company will still be obligated to pay the interest due on such Interest Payment Date to the Holder of such Security on such Regular Record Date. As a result of the foregoing, and Section 4.02(f), the Company will pay accrued and unpaid interest on the Maturity Date on all Securities converted after the Regular Record Date immediately preceding the Maturity Date to the holders of record of such Securities on such Regular Record Date, and converting Holders will not be required to pay the Company equivalent amounts.
As a result, except as otherwise provided in the proviso to the first sentence of the immediately preceding paragraph, any accrued and unpaid interest with respect to a converted Security will be deemed to be paid in full rather than cancelled, extinguished or forfeited. In addition, except as otherwise provided in the proviso to the first sentence of the immediately preceding paragraph, if the Settlement Amount for any Security includes both cash and shares of the Common Stock, accrued and unpaid interest will be deemed to be paid first out of the amount of cash delivered upon such conversion. Except as otherwise provided herein, in no event will a Holder be entitled to receive any dividend or other distribution with respect to any Common Stock issued on conversion of such Holders Securities if the applicable Conversion Date is after the Regular Record Date for such dividend or distribution. Prior to any conversion in accordance with this Section 4.03, a Holder shall not be the owner of any Common Stock issuable upon conversion of such Holders Securities.
(d) Notices . Whenever a Conversion Date occurs with respect to a Security, the Conversion Agent will, as promptly as possible, and in no event later than the Business Day immediately following such Conversion Date, deliver to the Company and the Trustee, if it is not then the Conversion Agent, notice that a Conversion Date has occurred, which notice will state such Conversion Date, the principal amount of Securities converted on such Conversion Date and the names of the Holders that converted Securities on such Conversion Date.
Section 4.04 Adjustment of Conversion Rate . The Conversion Rate will be adjusted as described in this Section 4.04, except that the Company shall not make any adjustment to the Conversion Rate if Holders participate (other than in the case of a share split or share combination), at the same time and upon the same terms as holders of the Common Stock and as a result of holding the Securities, in any of the transactions described below without having to convert their Securities, as if they held a number of shares of Common Stock equal to the applicable Conversion Rate, multiplied by the principal amount (expressed in thousands) of Securities held by such Holder.
(a) If the Company exclusively issues shares of Common Stock as a dividend or distribution on all or substantially all shares of the Common Stock, or if the Company effects a share split or share combination, the Conversion Rate will be adjusted based on the following formula:
CR 1 |
= |
CR 0 x |
OS 1 | |||
OS 0 |
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 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, as applicable, before giving effect to such dividend, distribution, share split or share combination; and | ||
OS 1 | = | the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination, as applicable. |
Any adjustment made under this Section 4.04(a) shall become effective immediately after the Open of Business on the Ex-Dividend Date for such dividend or distribution, or immediately after the Open of Business on the effective date for such share split or share combination. If any dividend or distribution of the type described in this Section 4.04(a) is declared but not so paid or made, or
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any share split or share combination of the type described in this Section 4.04(a) is announced but the outstanding shares of the Common Stock are not split or combined, the Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution, or not to split or combine the outstanding shares of the Common Stock, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared or such share split or share combination had not been announced.
(b) If the Company issues to all or substantially all holders of the Common Stock any rights, options or warrants 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 the Common Stock, at a price per share less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, the Conversion Rate will be increased based on the following formula:
CR 1 |
= |
CR 0 x |
OS 0 + X | |||
OS 0 + Y |
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; | ||
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, options or warrants; and | ||
Y | = | the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants divided by the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants. |
Any increase made under this Section 4.04(b) will be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the Open of Business on the Ex-Dividend Date for such issuance. To the extent that such rights, options or warrants are not exercised prior to their expiration or shares of Common Stock are not delivered upon the expiration of such rights, options or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights, options or warrants are not so issued, or if no such rights, options or warrants are exercised prior to their expiration, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such Ex-Dividend Date for such issuance had not occurred.
For purposes of this Section 4.04(b) and Section 4.01(b)(3) hereof, in determining whether any rights, options or warrants entitle the holders of the Common Stock to subscribe for or purchase shares of the Common Stock at a price per share less than such average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the date of announcement for such issuance, and in determining the aggregate offering price of such shares of the Common Stock, there shall be taken into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors.
(c) If the Company distributes shares of its Capital Stock, evidences of its indebtedness, other assets or property of the Company or rights, options or warrants to acquire its Capital Stock or other securities, to all or substantially all holders of the Common Stock, excluding:
(1) dividends, distributions, rights options or warrants as to which an adjustment was effected pursuant to Section 4.04(a) hereof or Section 4.04(b) hereof;
(2) dividends or distributions paid exclusively in cash; and
(3) Spin-Offs as to which the provisions set forth below in this Section 4.04(c) shall apply;
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then the Conversion Rate shall be increased based on the following formula:
CR 1 |
= |
CR 0 x |
SP 0 | |||
SP 0 - FMV |
where,
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, and including, 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 the Companys Capital Stock, evidences the Companys indebtedness, other assets, or property of the Company or rights, options or warrants to acquire the Companys Capital Stock or other securities distributed with respect to each outstanding share of the Common Stock on the Ex-Dividend Date for such distribution. |
If FMV (as defined above) is equal to or greater than SP0 (as defined above) or if the difference between the FMV and SP0 is less than $1.00, in lieu of the foregoing increase, each Holder of Securities shall receive, in respect of each $1,000 principal amount of Securities it holds, at the same time and upon the same terms as holders of the Common Stock, the amount and kind of the Companys Capital Stock, evidences of the Companys indebtedness, other assets or property of the Company or rights, options or warrants to acquire the Companys Capital Stock or other securities that such Holder would have received as if such Holder owned a number of shares of Common Stock equal to the Conversion Rate in effect on the Ex-Dividend Date for the distribution.
Any increase made under the portion of this Section 4.04(c) will become effective immediately after the Open of Business on the Ex-Dividend Date for such distribution. If such distribution is not so paid or made, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.
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 of the Company or other business unit of the Company, and such Capital Stock or similar equity interest is listed or quoted (or will be listed or quoted upon the consummation of the distribution) on a U.S. national securities exchange (a Spin-Off ), the Conversion Rate will be increased based on the following formula:
CR 1 |
= |
CR 0 x |
FMV 0 + MP 0 | |||
MP 0 |
where,
CR 0 | = | the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such Spin-Off; | ||
CR 1 | = | the Conversion Rate in effect immediately after the Open of Business on the Ex-Dividend Date for such Spin-Off; | ||
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 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. |
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The adjustment to the applicable Conversion Rate under the preceding paragraph of this Section 4.04(c) will be made immediately after the Open of Business on the day after the last Trading Day of the Valuation Period, but will be given effect as of the Open of Business on the Ex-Dividend Date for the Spin-Off. If the Ex-Dividend Date for the Spin-Off is less than 10 Trading Days prior to, and including, the end of the Observation Period in respect of any conversion, references within this Section 4.04(c) to 10 Trading Days shall be deemed replaced, for purposes of calculating the affected Daily Conversion Values in respect of that conversion, with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date for the Spin-Off to, and including, the last Trading Day of such Observation Period. For purposes of determining the applicable Conversion Rate, in respect of any conversion during the 10 Trading Days commencing on the Ex-Dividend Date for any Spin-Off, references within the portion of this Section 4.04(c) related to Spin-Offs to 10 Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the Ex-Dividend Date for such Spin-Off to, and including, the relevant Conversion Date.
For purposes of the second adjustment set forth in this clause 4.04(c), (i) the Last Reported Sale Price of any Capital Stock or similar equity interest shall be calculated in a manner analogous to that used to calculate the Last Reported Sale Price of the Common Stock in the definition of Last Reported Sale Price set forth in Section 1.02 hereof, (ii) whether a day is a Trading Day (and whether a day is a Scheduled Trading Day and whether a Market Disruption Event has occurred) for such Capital Stock or similar equity interest shall be determined in a manner analogous to that used to determine whether a day is a Trading Day (or whether a day is a Scheduled Trading Day and whether a Market Disruption Event has occurred) for the Common Stock, and (iii) whether a day is a Trading Day to be included in a Valuation Period will be determined based on whether a day is a Trading Day for both the Common Stock and such Capital Stock or similar equity interest.
Subject to Section 4.04(g), for the purposes of this Section 4.04(c), rights, options or warrants distributed by the Company to all holders of the Common Stock entitling them to subscribe for or purchase shares of the Companys Capital Stock (either initially or under certain circumstances), which rights, options 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, options or warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 4.04(c). If any such right, option or warrant, distributed prior to the Issue Date are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Ex-Dividend Date of such deemed distribution (in which case the original rights, options 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, options 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, options or warrants which shall all have been redeemed or purchased without exercise by any holders thereof, upon such final redemption or purchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and (y) the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by holders of Common Stock with respect to such rights, options or warrants (assuming each such holder had retained such rights, options or warrants), made to all holders of Common Stock as of the date of such redemption or purchase, and (2) in the case of such rights, options or warrants 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.
For purposes of Section 4.04(a) hereof, Section 4.04(b) hereof and this Section 4.04(c), if any dividend or distribution to which this Section 4.04(c) applies includes one or both of:
(A) a dividend or distribution of shares of Common Stock to which Section 4.04(a) hereof also applies (the Clause A Distribution ); or
(B) a dividend or distribution of rights, options or warrants to which Section 4.04(b) hereof also applies (the Clause B Distribution ),
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then (i) 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 to be made under this Section 4.04(c) with respect to such Clause C Distribution shall be made, (ii) the Clause B Distribution, if any, shall be deemed to immediately follow the Clause C Distribution and any Conversion Rate adjustment required by Section 4.04(b) hereof with respect thereto shall then be made, except that, if determined by the Company, (A) the Ex-Dividend Date of the Clause B Distribution and the Clause A Distribution, if any, shall be deemed to be the Ex-Dividend Date of the Clause C Distribution and (B) any shares of Common Stock included in the Clause A Distribution or the Clause B Distribution shall not be deemed to be outstanding immediately prior to the Open of Business on such Ex-Dividend Date within the meaning of Section 4.04(b) hereof, and (iii) the Clause A Distribution, if any, shall be deemed to immediately follow the Clause C Distribution or the Clause B Distribution, as the case may be, except that, if determined by the Company, (A) the Ex-Dividend Date of the Clause A Distribution and the Clause B Distribution, if any, shall be deemed to be the Ex-Dividend Date of the Clause C Distribution, and (B) any shares of Common Stock included in the Clause A distribution shall not be deemed 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) hereof.
(d) If any cash dividend or distribution is made to all or substantially all holders of the Common Stock to the extent that the aggregate of all such cash dividends or distributions paid in any quarter exceeds the dividend threshold amount (the DTA ) for such quarter, the Conversion Rate shall be adjusted based on the following formula:
CR 1 |
= |
CR 0 x |
SP 0 | |||
SP 0 C |
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; | ||
DTA | = | the dividend threshold amount, which shall initially be $0.62 per quarter; and | ||
C | = | the amount in cash per share that the Company distributes to holders of the Common Stock in excess of the DTA |
The DTA is subject to adjustment on an inversely proportional basis whenever the Conversion Rate is adjusted other than adjustments made pursuant to this Section 4.04(d). If an adjustment is required to be made as set forth in this Section 4.04(d) as a result of a distribution that is not a regular, periodic dividend, the DTA will be deemed to be zero with respect to that particular adjustment. Notwithstanding the foregoing, if at any time dividends are distributed other than on a quarterly basis, the DTA shall be appropriately adjusted and shall apply to such dividends.
If C (as defined above) is equal to or greater than SP0 (as defined above) or if the difference between C and SP0 is less than $1.00, in lieu of the foregoing increase, each Holder shall receive, for each $1,000 principal amount of Securities it holds, at the same time and upon the same terms as holders of shares of the Common Stock, the amount of cash that such Holder would have received if such Holder had owned a number of shares of Common Stock equal to the Conversion Rate on the Ex-Dividend Date for such cash dividend or distribution. Any increase made pursuant to this Section 4.04(d) shall become effective immediately after the Open of Business on the Ex-Dividend Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.
(e) If the Company or any of its Subsidiaries make a payment in respect of a tender offer or exchange offer for the Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the average of the Last Reported Sale Price of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the Offer Expiration Date ), the Conversion Rate shall be increased based on the following formula:
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CR 1 |
= |
CR 0 x |
AC + (SP 1 x OS 1 ) | |||
OS 0 x SP 1 |
where,
CR 0 | = | the Conversion Rate in effect immediately prior to the Close of Business on the Offer Expiration Date; | ||
CR 1 | = | the Conversion Rate in effect immediately after the Close of Business on the Offer Expiration Date; | ||
AC | = | the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares of Common Stock purchased in such tender offer or exchange offer; | ||
OS 0 | = | the number of shares of Common Stock outstanding immediately prior to the expiration time of the tender or exchange offer on the Offer Expiration Date (prior to giving effect to the purchase of all shares accepted for purchase or exchange in such tender offer or exchange offer); | ||
OS 1 | the number of shares of Common Stock outstanding immediately after the expiration time of the tender or exchange offer on the Offer Expiration Date (after giving effect to the purchase of all shares accepted for purchase or exchange in such tender or exchange offer); and | |||
SP 1 | the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the Offer Expiration Date. |
The adjustment to the applicable Conversion Rate under the preceding paragraph of this Section 4.04(e) will be given effect at the Open of Business on the Trading Day next succeeding the Offer Expiration Date. If the Trading Day next succeeding the Offer Expiration Date is less than 10 Trading Days prior to, and including, the end of the Observation Period in respect of any conversion, references within this Section 4.04(e) to 10 Trading Days shall be deemed replaced, solely in respect of such conversion, for purposes of calculating the affected Daily Conversion Values in respect of that conversion, with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the Offer Expiration Date to, and including, the last Trading Day of such Observation Period. For purposes of determining the applicable Conversion Rate, in respect of any conversion during the 10 Trading Days commencing on the Trading Day next succeeding the Offer Expiration Date, references within this Section 4.04(e) to 10 Trading Days shall be deemed replaced, solely in respect of such conversion, with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the Offer Expiration Date to, and including, the relevant Conversion Date.
(f) Special Settlement Provisions . Notwithstanding anything to the contrary herein, with respect to any Securities as to which Physical Settlement is applicable, if a Conversion Rate adjustment becomes effective on any Ex-Dividend Date as described above, and a Holder that has converted its Securities on or prior to the related Regular Record Date would be treated as the record holder of shares of Common Stock in accordance with the provisions of the last paragraph of Section 4.02(b) as of a date on or after such Ex-Dividend Date, then, notwithstanding the foregoing Conversion Rate adjustment provisions, the Conversion Rate adjustment relating to such Ex-Dividend Date will not be made for such converting Holder. Instead, such Holder will be treated as if such Holder were the record owner of the shares of Common Stock on an unadjusted basis and participate in the related dividend, distribution or other event giving rise to such adjustment.
(g) Poison Pill . Whenever a Holder converts a Security, to the extent that the Company has a rights plan in effect, the Holder converting such Security will receive, in addition to any shares of Common Stock otherwise received in connection with such conversion, the rights under the rights plan unless the rights have separated from the Common Stock, in which case, and only in such case, the Conversion Rate will be adjusted at the time of separation as if the Company distributed to all holders of the Common Stock, shares of Capital Stock, evidences of indebtedness, assets, property, rights, options or warrants as described in Section 4.04(c) hereof, subject to readjustment in the event of the expiration, termination or redemption of such rights.
(h) Deferral of Adjustments . Notwithstanding anything to the contrary herein, except on and after the first VWAP Trading Day of any Observation Period with respect to a Security and on or prior to the last VWAP Trading Day of such Observation Period, the Company will not be required to adjust the Conversion Rate unless such adjustment would require an increase or decrease of at least one percent; provided , however , that any such minor adjustments that are not required to be made will be carried forward
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and taken into account in any subsequent adjustment, and provided , further , that any such adjustment of less than one percent that has not been made shall be made upon the occurrence of (i) the Effective Date for any Make-Whole Fundamental Change, (ii) the first VWAP Trading Day of any Observation Period and (iii) if the Company elects to satisfy its conversion obligation solely in shares of Common Stock, upon any conversion of Securities. In addition, the Company shall not account for such deferrals when determining whether any of the conditions to conversion have been satisfied or what number of shares of Common Stock a Holder would have held on a given day had it converted its Securities.
(i) Limitation on Adjustments . Except as stated in this Section 4.04, the Company will not adjust the Conversion Rate for the issuance of shares of Common Stock or any securities convertible into or exchangeable for shares of Common Stock or the right to purchase shares of the Common Stock or such convertible or exchangeable securities. If, however, the application of the formulas in Sections 4.04(a) through (e) hereof would result in a decrease in the Conversion Rate, then, except to the extent of any readjustment to the Conversion Rate, no adjustment to the Conversion Rate will be made (other than as a result of a reverse share split, share combination or readjustment).
In addition, notwithstanding anything to the contrary herein, the Conversion Rate will not be adjusted:
(1) on account of stock repurchases that are not tender offers referred to in Section 4.04(e) hereof, including structured or derivative transactions, or transactions pursuant to a stock repurchase program approved by the Board of Directors or otherwise;
(2) 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;
(3) 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, program or agreement of or assumed by the Company or any of its Subsidiaries;
(4) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in the preceding clause (3) and outstanding as of the date the Securities were first issued;
(5) for a change in the par value of the Common Stock;
(6) for accrued and unpaid interest on the Securities, if any; or
(7) for an event otherwise requiring an adjustment under the Indenture if such event is not consummated.
(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) Withholding on Adjustments . If, in connection with any adjustment to the Conversion Rate as set forth in this Section 4.04, a Holder shall be deemed for U.S. federal tax purposes to have received a distribution and the Company reasonably believes it is required to collect withholding tax with respect to any such deemed distribution, the Company may withhold from cash payments of interest in accordance with the provisions of Section 2.04 hereof or from cash and Common Stock, if any, otherwise deliverable to a Holder upon a conversion of Securities in accordance with the provisions of Section 4.03 hereof or repurchase of a Security in accordance with the provisions of Article 3 hereof.
Section 4.05 Other Adjustments .
(a) Adjustments of Prices . Whenever any provision of the Indenture requires the Company to calculate the Last Reported Sale Prices, the Daily VWAPs or any function thereof over a span of multiple days (including during an Observation Period), the Company will make appropriate adjustments to each to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Effective Date, Ex-Dividend Date or Offer Expiration Date of the event occurs, at any time during the period when such Last Reported Sale Prices, the Daily VWAPs or function thereof is to be calculated.
25
(b) Voluntary Adjustments . To the extent permitted by applicable law, the Company is permitted to increase the Conversion Rate of the Securities by any amount for a period of at least 20 Business Days if the Board of Directors determines that such increase would be in the Companys best interest. The Company may also (but is not required to) increase the Conversion Rate to avoid or diminish income tax to holders of Common Stock or rights to purchase shares of Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event.
Section 4.06 Adjustment to Conversion Rate Upon Conversion in Connection with a Make-Whole Fundamental Change .
(a) Increase in the Conversion Rate . If a Make-Whole Fundamental Change occurs and a Holder elects to convert its Securities in connection with such Make-Whole Fundamental Change, the Company shall, under certain circumstances, increase the Conversion Rate for the Securities so surrendered for conversion by a number of additional shares of Common Stock (the Additional Shares ), as described in this Section 4.06. A conversion of Securities shall be deemed for these purposes to be in connection with a Make-Whole Fundamental Change if the relevant Conversion Notice is received by the Conversion Agent during the period from, and including, the Effective Date of the Make-Whole Fundamental Change up to, and including, the Close of Business on the Business Day immediately prior to the related Fundamental Change Purchase Date or, if such Make-Whole Fundamental Change is not a Fundamental Change, the 35th Business Day immediately following the Effective Date for such Make-Whole Fundamental Change.
(b) Cash Mergers . Notwithstanding anything to the contrary herein, if the consideration paid 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 Securities following the Effective Date of such Make-Whole Fundamental Change, the Settlement Amount shall be calculated based solely on the Stock Price for such Make-Whole Fundamental Change and shall, for each $1,000 principal amount of Securities converted, be deemed to be an amount of cash equal to the product of (i) the Conversion Rate in effect on the applicable Conversion Date (as increased by any number of Additional Shares required by this Section 4.06) multiplied by (ii) such Stock Price. In such event, the Company will determine the Settlement Amount and pay such amount of cash to a converting Holder on the third Business Day following the applicable Conversion Date. Otherwise, the Company will settle any conversion of the Securities following the Effective Date for a Make-Whole Fundamental Change in accordance with Section 4.02 hereof (but subject to Section 4.07 hereof).
(c) Determining the Number of Additional Shares . The number of Additional Shares, if any, by which the Conversion Rate will be increased for a Holder that converts its Securities in connection with a Make-Whole Fundamental Change shall be determined by reference to the table attached as Schedule A hereto, based on the date on which the Make-Whole Fundamental Change occurs or becomes effective (the Effective Date ) and the price (the Stock Price ) paid (or deemed paid) per share of the Common Stock in the Make-Whole Fundamental Change. 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 ten consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Effective Date of the Make-Whole Fundamental Change.
(d) Interpolation and Limits . The exact Stock Prices and Effective Dates may not be set forth in the table in Schedule A , in which case:
(1) If the Stock Price is between two Stock Prices in the table or the Effective Date is between two Effective Dates in the table, the number of Additional Shares by which the Conversion Rate will be increased shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Prices and the earlier and later Effective Dates, as applicable, based on a 365-day year.
(2) If the Stock Price is greater than $45.00 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 Section 4.06(d)(4) hereof), the Conversion Rate shall not be increased.
26
(3) If the Stock Price is less than $31.50 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 Section 4.06(d)(4) hereof), the Conversion Rate shall not be increased.
Notwithstanding the foregoing, in no event will the Conversion Rate be increased on account of a Make-Whole Fundamental Change to exceed 31.7460 shares of Common Stock per $1,000 principal amount of Securities, subject to adjustment in the same manner as the Conversion Rate is required to be adjusted as set forth in Section 4.04 hereof.
(4) 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 Securities is otherwise required to be adjusted. The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to such adjustment giving rise to the Stock Price adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of Additional Shares set forth in such table shall be adjusted in the same manner and at the same time as the Conversion Rate is required to be adjusted as set forth in Section 4.04.
(e) Notices . The Company shall notify the Holders 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) Merger Events . In the case of:
(1) any recapitalization, reclassification or change of the Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a split, subdivision or combination for which an adjustment is made pursuant to Section 4.04(a) hereof);
(2) any consolidation, merger or combination involving the Company;
(3) any sale, lease or other transfer to a third party of the consolidated assets of the Company and its Subsidiaries substantially as an entirety; or
(4) any statutory share exchange;
and, in each case, as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (any such event, a Merger Event , any such stock, other securities, other property or assets, Reference Property , and the amount of kind of Reference Property that a holder of one share of Common Stock (i) is entitled to receive in the applicable Merger Event or (ii) if, as a result of the applicable Merger Event, each share of Common Stock is converted into the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), the per-share of Common Stock weighted average of the types and amounts of Reference Property received by the holders of Common Stock that affirmatively make such an election, a Unit of Reference Property ) then, at the effective time of such Merger Event, the right to convert each $1,000 principal amount of Securities based on a number of shares of the Common Stock equal to the applicable Conversion Rate will, without the consent of the Holders, be changed into a right to convert each $1,000 principal amount of Securities based on a number of Units of Reference Property equal to the applicable Conversion Rate and, prior to or at the effective time of such Merger Event, the Company or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force at the date of execution of such supplemental indenture) providing for such change in the right to convert each $1,000 principal amount of Securities; provided , however , that the Company shall continue to determine the form of consideration to be paid or delivered, as the case may be, pursuant to Section 4.03 and (i) any amount payable in cash upon conversion of the Securities in accordance with Sections 4.03 and 4.06 hereof shall continue to be payable in cash, (ii) the number of shares of Common Stock that the Company would have been required to deliver upon conversion of the Securities in accordance with Sections 4.03 and 4.06 hereof shall instead be deliverable in Units of Reference Property and (iii) the Daily VWAP will, to the extent reasonably possible, be calculated based on the value of a Unit of Reference Property and the definitions of Trading Day and Market Disruption Event shall be determined by reference to the components of a Unit of Reference Property; provided, further , that if the holders receive only cash in such Merger Event, (i) the consideration due shall be solely in cash in an amount equal to the Conversion Rate in effect on the Conversion Date (as may be increased by any Additional Shares pursuant to Section 4.06), multiplied by the price paid per share of Common Stock in such Merger Event and (ii) settlement will occur on the third Business Day immediately following the Conversion Date.
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If the Merger Event causes the Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election) as contemplated by the preceding paragraph such that a Unit of Reference Property is comprised of the per-share of Common Stock weighted average of the types and amounts of consideration received by the holders of the Common Stock in the Merger Event that affirmatively make such an election, the Company shall notify Holders of the weighted average as soon as practicable after such determination is made.
The Company shall not become a party to any Merger Event unless its terms are consistent with this Section 4.07. Such supplemental indenture described in the second immediately preceding paragraph shall provide for adjustments which shall be as nearly equivalent 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 Merger Event, 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 Merger Event, then such supplemental indenture shall also be executed by such other Person.
(b) Notice of Supplemental Indentures . The Company shall cause notice of the execution of any supplemental indenture entered into pursuant to Section 4.07(a) above to be either mailed to each Holder at the address of such Holder as it appears on the register of the Securities maintained by the Security Registrar or sent electronically to each Holder in accordance with Applicable Procedures, within 20 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 Merger Events.
Section 4.08 Stock Issued Upon Conversion .
(a) Reservation of Shares . To the extent necessary to satisfy its obligations under the Indenture, prior to issuing any shares of Common Stock, the Company will reserve out of its authorized but unissued shares of Common Stock a sufficient number of shares of Common Stock to permit the conversion of the Securities.
(b) Certain other Covenants . The Company covenants that all shares of Common Stock that may be issued upon conversion of Securities shall be newly issued shares or treasury shares, shall be duly authorized, validly issued, fully paid and non-assessable and shall be free from preemptive rights and free from any tax, lien or charge (other than those created by the Holder or due to a change in registered owner).
The Company shall list or cause to have quoted any shares of Common Stock to be issued upon conversion of Securities on each national securities exchange or over-the-counter or other domestic market on which the Common Stock is then listed or quoted.
Section 4.09 Responsibility of Trustee . The Trustee and any Conversion Agent shall not at any time be under any duty or responsibility to any Holder of Securities to determine or calculate the Conversion Rate, to determine whether any facts exist which may require any adjustment of the Conversion Rate, or to confirm the accuracy of any such adjustment when made or the appropriateness of the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock or of any other securities or property that may at any time be issued or delivered upon the conversion of any Securities; and the Trustee and the Conversion Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Securities for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article 4. The rights, privileges, protections, immunities and benefits given to the Trustee, including without limitation its right to be compensated, reimbursed, and indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, including its capacity as Conversion Agent.
Section 4.10 Notice to Holders .
(a) Notice to Holders Prior to Certain Actions . The Company shall deliver notices of the events specified below at the times specified below and containing the information specified below unless, in each case, (i) pursuant to the Indenture, the Company is already required to deliver notice of such event containing at least the information specified below at an earlier time or, (ii) the Company, at the time it is required to deliver a notice, does not have knowledge of all of the information required to be included in such notice, in which case, the Company shall (A) deliver notice at such time containing only the information that it has knowledge of
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at such time (if it has knowledge of any such information at such time), and (B) promptly upon obtaining knowledge of any such information not already included in a notice delivered by the Company, deliver notice to each Holder containing such information. In each case, the failure by the Company to give such notice, or any defect therein, shall not affect the legality or validity of such event.
(1) Issuances, Distributions, and Dividends and Distributions . If the Company (A) announces any issuance of any rights, options or warrants that would require an adjustment in the Conversion Rate pursuant to Section 4.04(b) hereof; (B) authorizes any distribution that would require an adjustment in the Conversion Rate pursuant to Section 4.04(c) hereof (including any separation of rights from the Common Stock described in Section 4.04(g) hereof); or (C) announces any dividend or distribution that would require an adjustment in the Conversion Rate pursuant to Section 4.04(d) hereof, then the Company shall deliver to the Holders, as promptly as possible, but in any event at least 15 calendar days prior to the applicable Ex-Dividend Date, notice describing such issuance, distribution, dividend or distribution, as the case may be, and stating the expected Ex-Dividend Date and record date for such issuance, distribution, dividend or distribution, as the case may be. In addition, the Company shall deliver to the Holders notice if the consideration included in such issuance, distribution, dividend or distribution, or the Ex-Dividend Date or record date of such issuance, distribution, dividend or distribution, as the case may be, changes.
(2) Voluntary Increases . If the Company increases the Conversion Rate pursuant to Section 4.05(b), the Company shall deliver notice to the Holders at least 15 calendar days prior to the date on which such increase will become effective, which notice shall state the date on which such increased will become effective and the amount by which the Conversion Rate will be increased.
(3) Dissolutions, Liquidations and Winding-Ups . If there is a voluntary or involuntary dissolution, liquidation or winding-up of the Company, the Company shall deliver notice to the Holders at promptly as possible, but in any event at least 15 calendar days prior to the earlier of (i) the date on which such dissolution, liquidation or winding-up, as the case may be, is expected to become effective or occur, and (ii) the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such dissolution, liquidation or winding-up, as the case may be, which notice shall state the expected effective date and record date for such event, as applicable, and the amount and kind of property that a holder of one share of the Common Stock is expected to be entitled, or may elect, to receive in such event. The Company shall deliver an additional notice to holders, as promptly as practicable, whenever the expected effective date or record date, as applicable, or the amount and kind of property that a holder of one share of the Common Stock is expect to be entitled to receive in such event, changes.
(b) Notices After Certain Actions and Events . Whenever an adjustment to the Conversion Rate becomes effective pursuant to Sections 4.04, 4.05 or 4.06 hereof, the Company will (i) file with the Trustee an Officers Certificate stating that such adjustment has become effective, the Conversion Rate, and the manner in which the adjustment was computed and (ii) deliver notice to the Holders stating that such adjustment has become effective and the Conversion Rate or conversion privilege as adjusted. Failure to give any such notice, or any defect therein, shall not affect the validity of any such adjustment.
Section 4.11 Limit on Issuance of Shares of Common Stock Upon Conversion . Notwithstanding anything to the contrary in this Supplemental Indenture, if an event occurs that would result in an increase in the Conversion Rate by an amount in excess of limitations imposed by The New York Stock Exchange, the Company shall, at its option, either obtain stockholder approval of any issuance of Common Stock upon conversion of the Notes in excess of such limitations or pay cash in lieu of delivering any shares of Common Stock otherwise deliverable upon conversions in excess of such limitations based on the Daily VWAP for each Trading Day of the relevant Observation Period in respect of which, in lieu of delivering shares of Common Stock, the Company pays cash pursuant to this Section 4.11.
ARTICLE 5
PARTICULAR COVENANTS OF THE COMPANY
Section 5.01 Payment of Principal, Interest and Fundamental Change Purchase Price . This Section 5.01 shall replace Section 4.01 of the Base Indenture in its entirety.
The Company covenants and agrees that it will cause to be paid the principal of (including the Fundamental Change Purchase Price), and accrued and unpaid interest, if any, on each of the Securities at the places, at the respective times and in the manner provided herein and in the Securities.
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Each of the Company and the Trustee agrees to cooperate and to provide the other, at the request of the other, with such information as each may have in its possession to enable the determination of whether any payments pursuant to the Indenture are subject to the withholding requirements described in Section 1471(b) of the US Internal Revenue Code of 1986 (the Code) or otherwise imposed pursuant to Sections 1471 through 1474 of the Code and any regulations, or agreements thereunder or official interpretations thereof.
Section 5.02 Maintenance of Office or Agency . This Section 5.02 replaces Section 4.02 of the Base Indenture in its entirety and references in the Base Indenture to Section 4.02 of the Base Indenture shall be deemed replaced with references to this Section 5.02.
The Company will maintain in the Borough of Manhattan, The City of New York, an office of the Paying Agent, an office of the Security Registrar and an office or agency where Securities may be surrendered for conversion ( Conversion Agent ) and where notices and demands to or upon the Company in respect of the Securities and the Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office or the office or agency of the Trustee in the Borough of Manhattan, The City of New York.
The Company may also from time to time designate coregistrars one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York, for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The terms Paying Agent and Conversion Agent include any such additional or other offices or agencies, as applicable.
The Company hereby initially designates the Trustee as the Paying Agent, Security Registrar, Custodian, Conversion Agent and the Corporate Trust Office, which shall be in the continental United States, shall be considered as one such office or agency of the Company for each of the aforesaid purposes.
With respect to any Global Security, the Corporate Trust Office of the Trustee or any Paying Agent shall be the Place of Payment where such Global Security may be presented or surrendered for payment or conversion or for registration of transfer or exchange, or where successor Securities may be delivered in exchange therefor; provided , however , that any such payment, conversion, presentation, surrender or delivery effected pursuant to the Applicable Procedures of the Depositary for such Global Security shall be deemed to have been effected at the Place of Payment for such Global Security in accordance with the provisions of the Indenture.
Section 5.03 Appointments to Fill Vacancies in Trustees Office . The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.09 of the Base Indenture, a Trustee, so that there shall at all times be a Trustee hereunder.
Section 5.04 Provisions as to Paying Agent . This Section 5.04 shall replace Section 4.03 of the Base Indenture in its entirety and references in the Base Indenture to Section 4.03 of the Base Indenture shall be deemed replace with references to this Section 5.04.
(a) If the Company shall appoint a Paying Agent other than the Trustee, the Company will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 5.04:
(1) that it will hold all sums held by it as such agent for the payment of the principal of, accrued and unpaid interest, if any, on, and the Fundamental Change Purchase Price for, the Securities in trust for the benefit of the holders of the Securities;
(2) that it will give the Trustee prompt notice of any failure by the Company to make any payment of the principal of, accrued and unpaid interest, if any, on, or the Fundamental Change Purchase Price for, the Securities when the same shall be due and payable; and
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(3) that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of, accrued and unpaid interest, if any, on, and Fundamental Change Purchase Price for, the Securities, deposit with the Paying Agent a sum sufficient to pay such principal, accrued and unpaid interest, or Fundamental Change Purchase Price, as the case may be, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of any failure to take such action, provided that, if such deposit is made on the due date, such deposit must be received by the Paying Agent by 10:00 a.m., New York City time, on such date.
(b) If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal of, accrued and unpaid interest, if any, on, or Fundamental Change Purchase Price for, the Securities, set aside, segregate and hold in trust for the benefit of the holders of the Securities a sum sufficient to pay such principal, accrued and unpaid interest, if any, on or Fundamental Change Purchase Price, as the case may be, 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, accrued and unpaid interest on, or Fundamental Change Purchase Price for, the Securities when the same shall become due and payable.
(c) Anything in this Section 5.04 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of the Indenture, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by the Company or any Paying Agent hereunder as required by this Section 5.04, such sums to be held by the Trustee upon the trusts herein contained and upon such payment by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from all further liability with respect to such sums.
Section 5.05 Reports . This Section 5.05 will replace Section 5.03 of the Base Indenture in its entirety.
The Company will file with the Trustee, within 15 days after it is required to file the same with the SEC, copies of the quarterly and annual reports and of the information, documents and other reports, if any, that it is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, and to otherwise comply with Section 314(a) of the Trust Indenture Act. Any such report, information or document that the Company files with the SEC through the EDGAR system (or any successor thereto) will be deemed to be delivered to the Trustee for the purposes of this Section 5.05 at the time of such filing through the EDGAR system (or such successor thereto).
Delivery of any such reports, information and documents to the Trustee shall be for informational purposes only, and the Trustees receipt of such reports, information and documents shall not constitute actual or 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 Trustee is entitled to rely exclusively on Officers Certificates).
Section 5.06 Statements as to Defaults . The Company shall deliver to the Trustee, as soon as possible, and in any event within thirty days after the Company becomes aware of the occurrence of any Default or Event of Default, an Officers Certificate setting forth the details of such Default or Event of Default, its status and the action that the Company proposes to take with respect thereto. Such Officers Certificate shall also comply with any additional requirements set forth in Section 13.06 of the Base Indenture.
Section 5.07 Supplementary Interest Notice . If Supplementary Interest is payable by the Company pursuant to Section 6.04 hereof, the Company shall deliver to the Trustee an Officers Certificate to that effect stating (a) the amount of such Supplementary Interest that is payable and (b) the date on which such interest is payable. Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Supplementary Interest is payable. If the Company has paid Supplementary Interest directly to the Persons entitled to them, the Company shall deliver to the Trustee an Officers Certificate setting forth the particulars of such payment.
Section 5.08 Covenant to Take Certain Actions . Before taking any action which would cause an adjustment to the Conversion Rate such that the Conversion Price per share of Common Stock issuable upon conversion of the Securities would be less than the par value of the Common Stock, the Company shall take all corporate actions that may, in the opinion of its counsel, be necessary so it may validly and legally issue shares of Common Stock at such adjusted Conversion Rate.
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ARTICLE 6
REMEDIES
Section 6.01 Amendments to the Base Indenture .
(a) The Holders shall not have the benefit of Article VI of the Base Indenture and, with respect to the Securities, this Article 6 supersedes Article VI of the Base Indenture in its entirety.
(b) The references to Section 6.01(a)(4) and Section 6.01(a)(5) in Section 7.06(c) of the Base Indenture is, with respect to the Securities, hereby deemed replaced by a reference to Section 6.02(h) and Section 6.02(i) hereof, respectively.
(c) The reference to Section 6.01(a)(3) in Section 11.03(b) of the Base Indenture is, with respect to the Securities, hereby deemed replaced by a reference to Section 6.02(c) hereof.
Section 6.02 Events of Default . Each of the following events (and only the following events) shall be an Event of Default wherever used with respect to the Securities:
(a) failure to pay the principal of any Security (including the Fundamental Change Purchase Price) when due and payable on the Maturity Date, upon required repurchase, upon declaration of acceleration or otherwise;
(b) failure to pay interest when due and such failure continues for 30 days;
(c) failure to observe or perform any other covenant contained in the Securities or the Indenture and such failure continues for 60 days after the Company receives written notice from the Trustee or Holders of at least 25% of the aggregate principal amount of the Securities;
(d) failure by the Company to comply with its obligations under Article 4 hereof to convert the Securities into the amount of cash or the combination of cash and shares of Common Stock, if any, determined in accordance with Article 4 hereof upon exercise of a Holders conversion right and that failure continues for five Business Days;
(e) failure by the Company to comply with its obligations under Article X of the Base Indenture;
(f) failure by the Company to issue a notice in accordance with the provisions of Section 4.01(b)(3) hereof or Section 3.02(b) hereof when due;
(g) failure by the Company to pay beyond any applicable grace period, or the acceleration of, indebtedness of the Company or any of the Companys Subsidiaries in an aggregate amount greater than $50.0 million (or its foreign currency equivalent at the time);
(h) the Company shall commence a voluntary case or other proceeding seeking the liquidation, reorganization or other relief with respect to the Company or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or any substantial part of the Companys property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; and
(i) an involuntary case or other proceeding shall be commenced against the Company seeking liquidation, reorganization or other relief with respect to the Company or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of thirty consecutive days.
Section 6.03 Acceleration; Rescission and Annulment . If one or more Events of Default shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental
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body), then, and in each and every such case (other than an Event of Default specified in Section 6.02(h) or Section 6.02(i)), unless the principal of all of the Securities shall have already become due and payable, either the Trustee or the holders of at least 25% in aggregate principal amount of the Securities, by notice in writing to the Company (and to the Trustee if given by the Holders), may declare the unpaid principal of and accrued interest, if any, due and payable immediately. If an Event of Default specified in Section 6.02(h) or Section 6.02(i) occurs and is continuing, then all unpaid principal amounts and accrued interest, if any, shall immediately become due and payable, without any action by the Trustee or any Holder of Securities.
Section 6.04 Supplementary Interest .
(a) Notwithstanding any provisions of the Indenture to the contrary, if the Company so elects, the sole remedy for an Event of Default relating to (i) the Companys failure to file with the Trustee pursuant to Section 314(a)(1) of the Trust Indenture Act any documents or reports that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, or (ii) the Companys failure to comply with Section 5.05 hereof (a Reporting Event of Default ), will, for the first 365 days after the occurrence of such an Event of Default, consist exclusively of the right to receive additional interest on the Securities (the Supplementary Interest ) at a rate equal to (i) 0.25% per annum of the Outstanding principal amount of the Securities for each day during the 185-day period on which such Event of Default is continuing beginning on, and including, the date on which such an Event of Default first occurs and (ii) 0.50% per annum of the Outstanding principal amount of the Securities for each day during the 180-day period on which such Event of Default is continuing beginning on, and including the 186 th day on which such Event of Default is continuing. If the Company so elects, such Supplemental Interest will be payable in the same manner and on the same dates as the stated interest payable on the Securities. On the 366th day after such Event of Default (if the Reporting Event of Default is not cured or waived prior to such 366th day), the Securities will be subject to acceleration pursuant to Section 6.03. The provisions of this Section 6.04 will not affect the rights of Holders of Securities in the event of the occurrence of any Event of Default that is not a Reporting Event of Default. In the event the Company does not elect to pay the Supplemental Interest following an Event of Default in accordance with this Section 6.04 or the Company elected to make such payment but do not pay the Supplemental Interest when due, the Securities will be immediately subject to acceleration as provided in Section 6.03.
(b) In order to elect to pay the Supplemental Interest as the sole remedy during the first 365 days after the occurrence of an Reporting Event of Default, the Company must notify all Holders of Securities, the Trustee and the Paying Agent of such election prior to the beginning of such 365-day period. Upon the Companys failure to timely give such notice, the Securities will be immediately subject to acceleration as provided in Section 6.03.
Section 6.05 Waiver of Past Defaults . The Trustee may withhold notice to the Holders of Securities of any Default or Event of Default, except a Default or Event of Default relating to the payment of principal or interest or the failure to deliver the consideration due upon conversion, if it determines that withholding such notice is in the Holders interest. The Holders of a majority in principal amount of the Securities may waive any Default or Event of Default with respect to the Securities and its consequences, except a continuing Default or Event of Default in the payment of principal or interest on the Securities or the failure to deliver the consideration due upon conversion. Any such waiver shall cure such Default or Event of Default.
Section 6.06 Control by Majority . At any time, the Holders of a majority of the aggregate principal amount of the then Outstanding Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or for exercising any trust or power conferred on the Trustee, with respect to the Securities, provided that:
(a) the Trustee may refuse to follow any direction that conflicts with law or the Indenture;
(b) the Trustee may take any other action deemed proper by it which is not inconsistent with such direction; and
(c) subject to the Trustees duties under the Trust Indenture Act, the Trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to the Holders not involved in the proceeding.
Prior to taking any action hereunder, the Trustee will be entitled to indemnification reasonably satisfactory to it against all losses and expenses caused by taking or not taking such action.
Section 6.07 Limitation on Suits . A Holder of the Securities will only have the right to institute a proceeding under the Indenture or to appoint a receiver or trustee, or to seek other remedies if:
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(a) the Holder has delivered to the Trustee written notice that an Event of Default has occurred and is continuing with respect to the Securities;
(b) the Holders of at least 25% of the aggregate principal amount of the Securities have made written request, and such Holders have offered indemnity to the Trustee satisfactory to the Trustee to institute such proceedings as Trustee; and
(c) the Trustee does not institute such proceeding, and does not receive from the Holders of a majority in the aggregate principal amount of the Outstanding Securities other conflicting directions within 60 days after such notice, request and offer.
A Holder may not use the Indenture to prejudice the rights of any other Holder or to obtain a preference or priority over any other Holder, it being understood that the Trustee does not have any affirmative duty to ascertain whether any usage of the Indenture by a Holder is unduly prejudicial to such other Holders.
Section 6.08 Rights of Holders to Receive Payment and to Convert . Notwithstanding anything to the contrary elsewhere in the Indenture, the right of any Holder to receive payment of the principal of, interest on, Fundamental Change Purchase Price for, its Securities, on or after the respective due date, and to convert its Securities and receive payment or delivery of the consideration due with respect to such Securities in accordance with Article 4 hereof, or to bring suit for the enforcement of any such payment or conversion rights, will not be impaired or affected without the consent of such Holder and will not be subject to the requirements of Section 6.07 hereof.
Section 6.09 Collection of Indebtedness; Suit for Enforcement by Trustee . If an Event of Default specified in Section 6.02(a), 6.02(b) or 6.02(c) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, interest on, Fundamental Change Purchase Price for, and the amount of cash or the combination of cash and shares of Common Stock, if any, as the case may be, due upon the conversion of, the Securities, as the case may be, and such further amount as is sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, as well as any other amounts that may be due under Section 7.06 of the Base Indenture.
Section 6.10 Trustee May Enforce Claims Without Possession of Securities . All rights of action and claims under the Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders in respect of which such judgment has been recovered.
Section 6.11 Trustee May File Proofs of Claim . The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company, its creditors or its property and, unless prohibited by law or applicable regulations, will be entitled to collect, receive and distribute any money or other property payable or deliverable on any such claims, and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and, in the event that the Trustee consents to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.06 of the Base Indenture. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.06 of the Base Indenture out of the estate in any such proceeding, will be denied for any reason, payment of the same will be secured by a lien on, and is paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding, whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained will be deemed to authorize the Trustee to authorize or consent to, or to accept or to adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.12 Restoration of Rights and Remedies . If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under the Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
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Section 6.13 Rights and Remedies Cumulative . Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in Section 2.07 of the Base Indenture, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 6.14 Delay or Omission Not a Waiver . No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time and as often as may be deemed expedient by the Trustee (subject to the limitations contained in the Indenture) or by the Holders, as the case may be.
Section 6.15 Priorities . If the Trustee collects any money pursuant to this Article 6, it will pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due under Section 7.06 of the Base Indenture, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;
SECOND: to the Holders, for any amounts due and unpaid on the principal of, accrued and unpaid interest on, Fundamental Change Purchase Price for, and any cash due upon conversion of, any Security, without preference or priority of any kind, according to such amounts due and payable on all of the Securities; and
THIRD: the balance, if any, to the Company or to such other party as a court of competent jurisdiction directs.
The Trustee may fix a record date and payment date for any payment to the Holders pursuant to this Section 6.15. If the Trustee so fixes a record date and a payment date, at least 15 days prior to such record date, the Company will deliver to each Holder and the Trustee a written notice, which notice will state such record date, such payment date and the amount of such payment.
Section 6.16 Undertaking for Costs . All parties to the Indenture agree, and each Holder, by such Holders acceptance of a Security, 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 the Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided , however , that the provisions of this Section 6.16 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in aggregate principal amount of the Securities then Outstanding, or to any suit instituted by any Holder for the enforcement of the payment of the principal of, accrued and unpaid interest, if any, on, or Fundamental Change Purchase Price for, any Security on or after the due date expressed or provided for in the Indenture or to any suit for the enforcement of the right to convert any Security in accordance with the provisions of Article 4 hereof.
Section 6.17 Waiver of Stay, Extension and Usury Laws . The Company covenants that, to the extent that it may lawfully do so, it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of the Indenture; and the Company, to the extent that it may lawfully do so, hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will instead suffer and permit the execution of every such power as though no such law has been enacted.
Section 6.18 Notices from the Trustee . Notwithstanding anything to the contrary in the Base Indenture, whenever a Default occurs and is continuing and is known to the Trustee, the Trustee must deliver notice of such Default to the Holders within 90 days after the date on which such Default first occurred. Except in the case of a Default in the payment of the principal of, interest on, or Fundamental Change Purchase Price for, any Security or of a Default in the payment or delivery, as the case may be, of the consideration due upon conversion of a Security, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interests of the Holders.
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ARTICLE 7
SATISFACTION AND DISCHARGE
Section 7.01 Inapplicability of Provisions of Base Indenture; Satisfaction and Discharge of the Indenture . Article XI of the Base Indenture shall not apply with respect to the Securities. The provisions set forth in this Article 7 shall, with respect to the Securities, supersede in their entirety Article XI of the Base Indenture. The references to Section 11.05 in Section 4.03(c) and Section 7.05 of the Base Indenture are, with respect to the Securities, hereby deemed replaced by a reference to Section 7.03 hereof.
When (a) the Company shall deliver to the Security Registrar for cancellation all Securities theretofore authenticated (other than any Securities that have been destroyed, lost or stolen and in lieu of or in substitution for which other Securities shall have been authenticated and delivered) and not theretofore canceled, or (b) all the Securities not theretofore canceled or delivered to the Trustee for cancellation shall have (1) become due and payable (whether on the Maturity Date, on any Fundamental Change Purchase Date, upon conversion or otherwise) and/or (2) been converted (and the related Settlement Amounts have been determined) and the Company shall deposit with the Trustee, in trust, or deliver to the Holders, as applicable, an amount of cash or the combination of cash and shares of Common Stock, if any, as the case may be (solely to settle amounts due with respect to outstanding conversions), sufficient to pay all amounts due on all of such Securities (other than any Securities that shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Securities shall have been authenticated and delivered) not theretofore canceled or delivered to the Trustee for cancellation and/or settle all conversions, as the case may be, including principal and interest due, accompanied, except in the event the Securities are due and payable solely in cash at the Maturity Date or upon an earlier Fundamental Change Purchase Date, by a verification report as to the sufficiency of the deposited amount from a firm of nationally recognized independent certified accountants or other financial professionals, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then the Indenture shall cease to be of further effect (except as to (i) rights hereunder of Holders to receive all amounts owing upon the Securities and the other rights, duties and obligations of Holders, as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee and (ii) the rights, obligations and immunities of the Trustee hereunder), and the Trustee, on written demand of the Company accompanied by an 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 the Indenture; the Company, however, hereby agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee, including the fees and expenses of its counsel, and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with the Indenture or the Securities.
Section 7.02 Deposited Monies to Be Held in Trust by Trustee . Subject to Section 7.04 hereof, all monies and shares of Common Stock, if any, deposited with the Trustee pursuant to Section 7.01 hereof shall be held in trust for the sole benefit of the Holders of the Securities, and such monies and shares of Common Stock shall be applied by the Trustee to the payment, either directly or through any Paying Agent (including the Company if acting as its own Paying Agent), to the Holders of the particular Securities for the payment or settlement of which such monies or shares of Common Stock have been deposited with the Trustee, of all sums or amounts due and to become due thereon for principal and interest, if any.
Section 7.03 Paying Agent to Repay Monies Held . Upon the satisfaction and discharge of the Indenture, all monies and shares of Common Stock, if any, then held by any Paying Agent (if other than the Trustee) shall, upon written request of the Company, be repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be released from all further liability with respect to such monies and shares of Common Stock.
Section 7.04 Return of Unclaimed Monies . Subject to the requirements of applicable law, any monies and shares of Common Stock deposited with or paid to the Trustee for payment of the principal of or interest, if any, on the Securities and not applied but remaining unclaimed by the Holders of the Securities for two years after the date upon which the principal of or interest, if any, on such Securities, as the case may be, shall have become due and payable, shall be repaid to the Company by the Trustee on demand, and all liability of the Trustee shall thereupon cease with respect to such monies and shares of Common Stock; and the Holder shall thereafter look only to the Company for any payment or delivery that such Holder may be entitled to collect unless an applicable abandoned property law designates another person.
Section 7.05 Reinstatement . If the Trustee or the Paying Agent is unable to apply any money or shares of Common Stock in accordance with Section 7.02 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 Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 7.01 until such time as the Trustee or the Paying Agent is
36
permitted to apply all such money and shares of Common Stock in accordance with Section 7.02; provided , however , that if the Company makes any payment of interest on, principal of or payment or delivery in respect of any Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or shares of Common Stock, if any, held by the Trustee or Paying Agent.
ARTICLE 8
SUPPLEMENTAL INDENTURES
Section 8.01 Supplemental Indentures Without Consent of Holders . Section 9.01 of the Base Indenture shall not apply with respect to the Securities, and this Section 8.01 shall replace Section 9.01 of the Base Indenture in its entirety.
Without the consent of any Holder, the Company (when authorized by a Board Resolution) and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:
(a) to cure any ambiguity, defect or inconsistency under the Indenture or the Securities;
(b) to evidence the succession by a successor company and to provide for the assumption by a successor company of the Companys obligations under the Indenture as set forth in Article X of the Base Indenture;
(c) to add to the Companys covenants, restrictions, conditions or provisions for the benefit of the Holders of all or any Outstanding Securities;
(d) to add any additional Events of Default for the benefit of the Holders of all or any Outstanding Securities;
(e) to change anything that does not materially adversely affect the interests of any Holder of Securities;
(f) to evidence and provide for the acceptance of appointment of a successor Trustee;
(g) to comply with the Applicable Procedures of the Depositary;
(h) to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act; or
(i) to conform the text of the Indenture or the Securities to the Description of the Notes section of the Prospectus Supplement and the Description of Debt Securities section of the accompanying Prospectus.
Section 8.02 Supplemental Indentures With Consent of Holders . Section 9.02 of the Base Indenture shall not apply with respect to the Securities, and this Section 8.02 shall replace Section 9.02 of the Base Indenture in its entirety.
With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities affected by such supplemental indenture, including without limitation, consents obtained in connection with a purchase of, or tender or exchange offer for, Securities and by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of modifying in any manner the rights of the Holders under the Indenture; provided , however , that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby:
(a) extend the fixed maturity of the Securities;
(b) reduce the principal amount, reduce the rate of or extend the time of payment of interest of any Securities;
(c) change any of the Companys obligations to pay Additional Amounts;
(d) reduce the amount of principal payable upon acceleration of the maturity of the Securities;
37
(e) change the currency in which the Securities or any interest thereon is payable;
(f) impair the right to enforce any payment on or with respect to any Security;
(g) make any change that impairs or adversely affects the conversion rights of any Securities;
(h) reduce the Fundamental Chance Purchase Price of any Security or amend or modify in any manner adverse to the rights of the Holders of the Securities the Companys obligation to pay the Fundamental Chance Purchase Price, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;
(i) make any change to the rank or seniority of the Securities in a manner that is adverse to the rights of the Holders of the Securities; or
(j) reduce the percentage in principal amount of outstanding notes, the consent of whose Holders is required for modification or amendment of the Indenture or Securities or for waiver of compliance with certain provisions of the Indenture or for waiver of certain Defaults;
(k) reduce the requirements contained in the Indenture for quorum or voting; or
(l) modify any of the above provisions.
It shall not be necessary for any Act or consent of Holders under this Section 8.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act or consent shall approve the substance thereof. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to consent to any indenture supplemental hereto. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to consent to such supplemental indenture, whether or not such Holders remain Holders after such record date; provided that, unless such consent shall have become effective by virtue of the requisite percentage having been obtained prior to the date which is 90 days after such record date, any such consent previously given shall automatically and without further action by any Holder be cancelled and of no further effect.
Section 8.03 Notice of Amendment or Supplement . After an amendment or supplement under this Article 8 becomes effective, the Company shall send to the Holders a notice briefly describing such amendment or supplement. However, the failure to give such notice to all the Holders, or any defect in the notice, shall not impair or affect the validity of the amendment or supplement.
ARTICLE 9
MISCELLANEOUS
Section 9.01 Effect on Successors and Assigns . Notwithstanding Section 2.09 of the Base Indenture, all agreements of the Company, the Trustee, the Security Registrar, the Paying Agent and the Conversion Agent in the Indenture and the Securities will bind their respective successors.
Section 9.02 Governing Law . THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE AND THE SECURITIES.
Section 9.03 No Security Interest Created . Nothing in the Indenture or in the Securities, 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 9.04 Trust Indenture Act . If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern the Indenture, the latter provision shall control. If any provision of the Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to the Indenture as so modified or to be excluded, as the case may be.
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Section 9.05 Benefits of Supplemental Indenture . Notwithstanding anything to the contrary in Section 2.09 of the Base Indenture, nothing in this Supplemental Indenture or in the Securities, expressed or implied, will give to any Person, other than the parties hereto, any Paying Agent, any Conversion Agent, any Authenticating Agent, any Security Registrar or their successors hereunder or the Holders of the Securities, any benefit or any legal or equitable right, remedy or claim under this Supplemental Indenture.
Section 9.06 Calculations . Except as otherwise provided in the Indenture, the Company shall be responsible for making all calculations called for under the Securities. These calculations include, but are not limited to, determinations of the Last Reported Sale Prices of the Common Stock, accrued interest payable on the Securities 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 Securities. The Company shall provide a schedule of its calculations to each of the Trustee and the Conversion Agent, and each of the Trustee and Conversion Agent is entitled to rely conclusively upon the accuracy of the Companys calculations without independent verification. The Trustee will forward the Companys calculations to any Holder upon the request of that Holder at the sole cost and expense of the Company.
Whenever the Company is required to calculate the Conversion Rate, the Company will do so to the nearest 1/10,000th of a share of Common Stock.
Section 9.07 Execution in Counterparts . This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.
Section 9.08 Notices . The Company or the Trustee, by notice given to the other in the manner provided in Section 13.03 of the Base Indenture, may designate additional or different addresses for subsequent notices or communications.
Notwithstanding anything to the contrary in the Base Indenture, whenever the Company is required to deliver notice to the Holders, the Company will, by the date it is required to deliver such notice to the Holders, deliver a copy of such notice to the Trustee, the Paying Agent, the Security Registrar and the Conversion Agent. Each notice to the Trustee, the Paying Agent, the Security Registrar and the Conversion Agent shall be sufficiently given if in writing and mailed, first-class postage prepaid to the address most recently sent by the Trustee, the Paying Agent, the Security Registrar or the Conversion Agent, as the case may be, to the Company.
Section 9.09 Ratification of Base Indenture . The Base Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and confirmed, and this Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent herein provided. For the avoidance of doubt, each of the Company and each Holder of Securities, by its acceptance of such Securities, acknowledges and agrees that all of the rights, privileges, protections, immunities and benefits afforded to the Trustee under the Base Indenture are deemed to be incorporated herein, and shall be enforceable by the Trustee hereunder, in each of its capacities hereunder as if set forth herein in full.
Section 9.10 The Trustee . The recitals in this Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the Base Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of the Securities and of this Supplemental Indenture as fully and with like effect as set forth in full herein.
Section 9.11 No Recourse Against Others . No director, officer, employee, incorporator or stockholder of the Company shall have any liability for any obligations of the Company under the Securities, the Indenture or any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder, by accepting a Security, waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Securities.
[ Remainder of the page intentionally left blank ]
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IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed as of the day and year first above written.
BLACKSTONE MORTGAGE TRUST, INC.
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By: |
/s/ Leon Volchyok |
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Name: | Leon Volchyok | |||||
Title: | Head of Legal and Compliance and Secretary | |||||
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
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By: |
/s/ R. Tarnas |
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Name: | R. Tarnas | |||||
Title: | Vice President |
[Signature Page to Supplemental Indenture]
SCHEDULE A
The following table sets forth the number of Additional Shares by which the Conversion Rate shall be increased pursuant to Section 4.06 based on the Stock Price and Effective Date set forth below.
Stock Price | ||||||||||||||||||||||||||||||||||||||||||||||||
Effective Date |
$31.50 | $32.50 | $33.50 | $34.50 | $35.50 | $36.23 | $36.50 | $37.50 | $38.50 | $39.50 | $40.50 | $45.00 | ||||||||||||||||||||||||||||||||||||
March 27, 2018 |
4.1408 | 3.3305 | 2.6137 | 1.9881 | 1.4513 | 1.1145 | 1.0016 | 0.6347 | 0.3462 | 0.1314 | 0.0091 | 0.0000 | ||||||||||||||||||||||||||||||||||||
March 15, 2019 |
4.1408 | 3.2157 | 2.4961 | 1.8719 | 1.3408 | 1.0113 | 0.9011 | 0.5480 | 0.2751 | 0.0790 | 0.0049 | 0.0000 | ||||||||||||||||||||||||||||||||||||
March 15, 2020 |
4.1408 | 3.1803 | 2.4463 | 1.8122 | 1.2766 | 0.9484 | 0.8400 | 0.4984 | 0.2481 | 0.0790 | 0.0049 | 0.0000 | ||||||||||||||||||||||||||||||||||||
March 15, 2021 |
4.1408 | 3.1760 | 2.4155 | 1.7600 | 1.2101 | 0.8774 | 0.7685 | 0.4312 | 0.1943 | 0.0529 | 0.0032 | 0.0000 | ||||||||||||||||||||||||||||||||||||
March 15, 2022 |
4.1408 | 3.1640 | 2.3400 | 1.6400 | 1.0611 | 0.7223 | 0.6145 | 0.2963 | 0.0964 | 0.0041 | 0.0000 | 0.0000 | ||||||||||||||||||||||||||||||||||||
March 15, 2023 |
4.1408 | 3.1640 | 2.2454 | 1.3803 | 0.5637 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 |
EXHIBIT A
[FORM OF FACE OF SECURITY]
[ For Global Securities, include the following legend:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
No.: | [ ] | |
CUSIP: | 09257W AC4 | |
ISIN: | US09257WAC47 |
Principal Amount $[ ]
[as revised by the Schedule of Increases
and Decreases in the Global Security attached hereto] (1)
Blackstone Mortgage Trust, Inc.
4.75% Convertible Senior Notes due 2023
Blackstone Mortgage Trust, Inc., a Maryland corporation, promises to pay to [ ] [include Cede & Co. for Global Security] or registered assigns, the principal amount of $[ ] on March 15, 2023 (the Maturity Date ).
Interest Payment Dates: March 15 and September 15, beginning on September 15, 2018.
Regular Record Dates: March 1 and September 1.
Additional provisions of this Security are set forth on the other side of this Security.
(1) | Include for Global Securities only. |
IN WITNESS WHEREOF, BLACKSTONE MORTGAGE TRUST, INC. has caused this instrument to be duly signed.
BLACKSTONE MORTGAGE TRUST, INC.
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By: |
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Name: | ||
Title: | ||
Dated:
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By: |
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Name: | ||
Title: | ||
Dated: |
TRUSTEES CERTIFICATE OF AUTHENTICATION
The Bank of New York Mellon Trust Company, N.A., as Trustee, certifies that this is one of the Securities referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
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By: |
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Authorized Signatory | ||
Dated: |
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[FORM OF REVERSE OF NOTE]
BLACKSTONE MORTGAGE TRUST, INC.
4.75% Convertible Senior Notes due 2023
This Security is one of a duly authorized issue of securities of the Company (herein called the Securities ), issued under a Senior Debt Indenture dated as of November 25, 2013 (herein called the Base Indenture ), and as further supplemented by the Third Supplemental Indenture, dated as of March 27, 2018 (herein called the Supplemental Indenture and the Base Indenture, as supplemented by the Supplemental Indenture, the Indenture ) by and between the Company and The Bank of New York Mellon Trust Company, N.A., herein called the Trustee , and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is not subject to redemption at the option of the Company prior to the Maturity Date and does not benefit from a sinking fund.
As provided in and subject to the provisions of the Indenture, upon the occurrence of a Fundamental Change, the Holder of this Security will have the right, at such Holders option, to require the Company to purchase this Security, or any portion of this Security such that the principal amount of this Security that is not purchased equals $1,000 or an integral multiple of $1,000 in excess thereof, on the Fundamental Change Purchase Date at a price equal to the Fundamental Change Purchase Price for such Fundamental Change Purchase Date.
As provided in and subject to the provisions of the Indenture, the Holder hereof has the right, at its option (i) during certain periods and upon the occurrence of certain conditions specified in the Indenture, prior to the Close of Business on the Business Day immediately preceding December 15, 2022, and (ii) on or after December 15, 2022, at any time prior to the Close of Business on the second Scheduled Trading Day immediately preceding the Stated Maturity, to convert this Security or a portion of this Security such that the principal amount of this Security that is not converted equals $1,000 or an integral multiple of $1,000 in excess thereof, into an amount of cash, shares of Common Stock or a combination of cash and shares of Common Stock, as the case may be, determined in accordance with Article 4 of the Supplemental Indenture.
As provided in and subject to the provisions of the Indenture, the Company will make all payments in respect of the Fundamental Change Purchase Price for, and the principal amount of, this Security to the Holder that surrenders this Security to the Paying Agent to collect such payments in respect of this Security. 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 Securities to be effected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities at the time Outstanding, on behalf of the Holders of all Securities, 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 Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security 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 Security.
As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver or trustee, or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Security, the Holders of not less than 25% in principal amount of the Securities at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity satisfactory to it, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or interest hereon or amounts due upon conversion on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay or deliver, as the case may be, the principal of (including the Fundamental Change Purchase Price), interest on and the amount of cash, shares of Common Stock or combination of cash and shares of Common Stock, as the case may be, due upon conversion of, this Security 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 Security is registrable in the Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or its attorney duly authorized in writing, and thereupon one or more new Securities 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 Securities are issuable only in registered form without coupons in denominations of $1,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Securities are exchangeable for a like aggregate principal amount of Securities and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or Trustee may treat the Person in whose name the Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
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 similar governmental charge payable in connection therewith.
All defined terms used in this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture. If any provision of this Security limits, qualifies or conflicts with a provision of the Indenture, such provision of the Indenture shall control.
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this Security, shall be construed as though they were written out in full
TEN COMas tenants in common |
UNIF GIFT MIN ACT |
Custodian |
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(Cust) |
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TEN ENT -as tenants by the entireties |
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(Minor) |
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JT TENas joint tenants with right of Survivorship and not as tenants in common |
Uniform Gifts to Minors Act |
(State) |
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Additional abbreviations may also be used though not in the above list.
ANNEX A
[Include for Global Security]
SCHEDULE OF INCREASES AND DECREASES OF GLOBAL SECURITY
Initial principal amount of Global Security:
Date |
Amount of
Increase in principal amount of Global Security |
Amount of
Decrease in principal amount of Global Security |
principal
amount of Global Security after Increase or Decrease |
Notation by
Security Registrar or Custodian |
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ATTACHMENT 1
[FORM OF NOTICE OF CONVERSION]
To: Blackstone Mortgage Trust, Inc.
The undersigned Holder of this Security hereby irrevocably exercises the option to convert this Security, or a portion hereof (which is such that the principal amount of the portion of this Security that will not be converted equals $1,000 or an integral multiple of $1,000 in excess thereof) below designated, into an amount of cash, shares of Common Stock or combination of cash and shares of Common Stock, as the case may be, in accordance with the terms of the Indenture referred to in this Security, and directs that any cash payable and any shares of Common Stock issuable and deliverable upon conversion, together with any Securities representing any unconverted principal amount hereof, be paid and/or issued and/or delivered, as the case may be, to the registered Holder hereof unless a different name is indicated below.
Subject to certain exceptions set forth in the Indenture, if this notice is being delivered on a date after the Close of Business on a Regular Record Date and prior to the Open of Business on the Interest Payment Date corresponding to such Regular Record Date, this notice must be accompanied by payment of an amount equal to the interest payable on such Interest Payment Date on the principal amount of this Security to be converted. If any shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect to such issuance and transfer as set forth in the Indenture.
Principal amount to be converted (in an integral multiple of $1,000, if less than all):
Signature(s)
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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 Trustee. | ||
Signature Guarantee |
Fill in for registration of any shares of Common Stock and Securities if to be issued otherwise than to the registered Holder.
(Name)
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(Address)
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Please print Name and Address | ||
(including zip code number) | ||
Social Security or other Taxpayer
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Identifying Number |
ATTACHMENT 2
[FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE]
To: Blackstone Mortgage Trust, Inc.
The undersigned registered owner of this Security hereby acknowledges receipt of a notice from Blackstone Mortgage Trust, Inc. (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 pay to the registered holder hereof in accordance with the applicable provisions of the Indenture referred to in this Security (i) the entire principal amount of this Security, or the portion thereof (that is such that the portion not to be purchased has a principal amount equal to $1,000 or an integral multiple of $1,000 in excess thereof) below designated, and (ii) if such Fundamental Change Purchase Date does not occur during the period after a Regular Record Date and on or prior to the Interest Payment Date corresponding to such Regular Record Date, accrued and unpaid interest, if any, thereon to, but excluding, such Fundamental Change Purchase Date.
In the case of certificated Securities, the certificate numbers of the Securities to be purchased are as set forth below:
Dated: |
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Signature(s)
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Social Security or Other Taxpayer Identification Number
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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 Security in every particular without alteration or enlargement or any change whatever. |
ATTACHMENT 3
[FORM OF ASSIGNMENT AND TRANSFER]
For value received hereby sell(s), assign(s) and transfer(s) unto (Please insert social security or Taxpayer Identification Number of assignee) the within Security, and hereby irrevocably constitutes and appoints to transfer the said Security on the books of the Company, with full power of substitution in the premises.
Signature(s)
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Signature(s) must be guaranteed by an institution which is a member of one of the following recognized signature Guarantee Programs:
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(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 |
Exhibit 5.1
[LETTERHEAD OF VENABLE LLP]
March 27, 2018
Blackstone Mortgage Trust, Inc.
345 Park Avenue, 42 nd Floor
New York, New York 10154
Re: Registration Statement on Form S-3 (Registration No. 333-212769)
Ladies and Gentlemen:
We have served as Maryland counsel to Blackstone Mortgage Trust, Inc., a Maryland corporation (the Company), in connection with certain matters of Maryland law arising out of (a) the sale and issuance by the Company of up to $253,000,000 (including $33,000,000 which the underwriters in the offering have the option to purchase solely to cover over-allotments) in aggregate principal amount of the Companys 4.75% Convertible Senior Notes due 2023 (the Notes) and (b) the issuance by the Company of up to 8,031,738 shares (the Shares) of the Companys class A common stock, $0.01 par value per share (the Common Stock), that may be issuable upon conversion of the Notes, covered by the above-referenced Registration Statement, and all amendments thereto (collectively, the Registration Statement), filed by the Company with the United States Securities and Exchange Commission (the Commission) under the Securities Act of 1933, as amended (the 1933 Act).
In connection with our representation of the Company, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (hereinafter collectively referred to as the Documents):
1. The Registration Statement;
2. The Prospectus, dated July 29, 2016, as supplemented by a Prospectus Supplement, dated March 22, 2018 (the Prospectus Supplement), filed with the Commission pursuant to Rule 424(b) of the General Rules and Regulations promulgated under the 1933 Act;
3. The charter of the Company (the Charter), certified by the State Department of Assessments and Taxation of Maryland (the SDAT);
4. The Fourth Amended and Restated Bylaws of the Company, certified as of the date hereof by an officer of the Company;
5. A certificate of the SDAT as to the good standing of the Company, dated as of a recent date;
Blackstone Mortgage Trust, Inc.
March 27, 2018
Page 2
6. Resolutions adopted by the Board of Directors of the Company, and by a duly authorized committee thereof (the Resolutions), relating to, among other matters, (a) the sale and issuance of the Notes, (b) the Indenture (as defined herein) and (c) the issuance of the Shares upon conversion of the Notes, certified as of the date hereof by an officer of the Company;
7. The Indenture, dated as of November 25, 2013, as supplemented by one or more supplemental indentures (collectively, the Indenture), by and between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee;
8. A certificate executed by an officer of the Company, dated as of the date hereof; and
9. Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed the following:
1. Each individual executing any of the Documents, whether on behalf of such individual or another person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a party (other than the Company) is duly authorized to do so.
3. Each of the parties (other than the Company) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such partys obligations set forth therein are legal, valid and binding and are enforceable in accordance with all stated terms.
4. All Documents submitted to us as originals are authentic. The form and content of all Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. All Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise.
Blackstone Mortgage Trust, Inc.
March 27, 2018
Page 3
5. Upon the issuance of any of the Shares, the total number of shares of Common Stock issued and outstanding will not exceed the total number of shares of Common Stock that the Company is then authorized to issue under the Charter.
6. The Shares will not be issued or transferred in violation of the restrictions or limitations contained in Article VII of the Charter.
7. The Notes will be converted for the Shares in accordance with the terms of the Indenture and the Registration Statement.
The phrase known to us is limited to the actual knowledge, without independent inquiry, of the lawyers at our firm who have performed legal services in connection with the issuance of this opinion.
Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that:
1. The Company is a corporation duly incorporated and validly existing under the laws of the State of Maryland and is in good standing with the SDAT.
2. The Company has the corporate power to enter into and perform its obligations under the Indenture. The Indenture has been duly authorized, executed and, so far as is known to us, delivered by the Company.
3. The issuance of the Notes has been duly authorized by all necessary corporate action on the part of the Company.
4. The issuance of the Shares upon conversion of the Notes has been duly authorized and, when and if issued and delivered upon conversion of the Notes in accordance with the terms thereof, the Registration Statement, the Indenture and the Resolutions, such Shares will be validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to the applicability or effect of federal or state securities laws, including the securities laws of the State of Maryland, or as to federal or state laws regarding fraudulent transfers. We note that the Indenture is governed by the laws of the State of New York. To the extent that any matter as to which our opinion is expressed herein would be governed by the laws of any jurisdiction other than the State of Maryland, we do not express any opinion on such matter. The opinion
Blackstone Mortgage Trust, Inc.
March 27, 2018
Page 4
expressed herein is subject to the effect of any judicial decision which may permit the introduction of parol evidence to modify the terms or the interpretation of agreements.
The opinion expressed herein is limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof.
This opinion is being furnished to you for submission to the Commission as an exhibit to the Companys Current Report on Form 8-K relating to the Notes (the Current Report), which is incorporated by reference in the Registration Statement. Simpson Thacher & Bartlett LLP, counsel to the Company, may rely on this opinion in connection with their opinion of even date herewith. We hereby consent to the filing of this opinion as an exhibit to the Current Report and the said incorporation by reference and to the use of the name of our firm therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the 1933 Act.
Very truly yours, | ||
/s/ Venable LLP |
Exhibit 5.2
[LETTERHEAD OF SIMPSON THACHER & BARTLETT LLP]
March 27, 2018
Blackstone Mortgage Trust, Inc.
345 Park Avenue, 42 nd Floor
New York, New York 10154
Ladies and Gentlemen:
We have acted as counsel to Blackstone Mortgage Trust, Inc., a Maryland corporation (the Company) in connection with the Registration Statement on Form S-3 (File No. 333-212769) (the Registration Statement) filed by the Company with the Securities and Exchange Commission (the Commission) under the Securities Act of 1933, as amended (the Securities Act), relating to the issuance by the Company of up to $253,000,000 aggregate principal amount of 4.75% Convertible Senior Notes due 2023 (the Securities). The Securities will be convertible into cash, shares of class A common stock, par value $0.01 per share, of the Company, or a combination thereof, pursuant to the terms of the Securities and an indenture, dated as of November 25, 2013 (the Base Indenture), as supplemented by the Third Supplemental Indenture, dated as of March 27, 2018 (the Third Supplemental Indenture and, together with the Base Indenture, the Indenture), each between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the Trustee).
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We have examined the Registration Statement, the Base Indenture, a form of which has been filed with the Commission as an exhibit to the Registration Statement, the Third Supplemental Indenture, which is being filed with the Commission on the date hereof, a duplicate of the global note representing the Securities and the Underwriting Agreement, dated March 22, 2018 (the Underwriting Agreement), among the Company, BXMT Advisors L.L.C., a Delaware limited liability company (the Manager) and the several underwriters named therein. We also have examined the originals, or duplicates or certified or conformed copies, of such records, agreements, documents and other instruments and have made such other investigations as we have deemed relevant and necessary in connection with the opinion hereinafter set forth. As to questions of fact material to this opinion, we have relied upon certificates or comparable documents of public officials and of officers and representatives of the Company and the Manager.
In rendering the opinion set forth below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies and the authenticity of the originals of such latter documents. We also have assumed that the Indenture is the valid and legally binding obligation of the Trustee.
We have assumed further that (1) the Company is validly existing and in good standing under the law of the State of Maryland and has duly authorized, executed and delivered or issued, as applicable, the Underwriting Agreement, the Indenture and the Securities in accordance with the Companys charter and by-laws and the law of the State of Maryland and (2) the execution, delivery, issuance and performance, as applicable, by the Company of the Underwriting Agreement, the Indenture and the Securities do not and will not violate the law of the State of Maryland or any other jurisdiction (except that no such assumption is made with respect to the law of the State of New York and the federal law of the United States).
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Based upon the foregoing, and subject to the qualifications, assumptions and limitations stated herein, we are of the opinion that, assuming due authentication thereof by the Trustee and upon payment and delivery in accordance with the Underwriting Agreement, the Securities will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms.
Our opinion set forth above is subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law), and (iii) an implied covenant of good faith and fair dealing. In addition, we express no opinion as to (A) the waiver of rights and defenses contained in Section 6.17 of the Third Supplemental Indenture or (B) the validity, legally binding effect or enforceability of Section 13.10 of the Base Indenture relating to the separability of provisions of the Indenture.
For purposes of our opinion, we assume that the increase in the Conversion Rate (as defined in the Indenture) upon the occurrence of a Make-Whole Fundamental Change (as defined in the Indenture) pursuant to the provisions of the Indenture and any related provisions of the Securities represents reasonable compensation for the lost value of the Securities as the result of the occurrence of a Make-Whole Fundamental Change.
We do not express any opinion herein concerning any law other than the law of the State of New York and the federal law of the United States.
We hereby consent to the filing of this opinion letter as Exhibit 5.2 to the Companys Current Report on Form 8-K filed on March 27, 2018 for incorporation by reference in the Registration Statement and to the use of our name under the caption Legal Matters in the prospectus included in the Registration Statement relating to the Securities.
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Very truly yours, | ||||||
/s/ SIMPSON THACHER & BARTLETT LLP | ||||||
SIMPSON THACHER & BARTLETT LLP |
Exhibit 8.1
[LETTERHEAD OF SIMPSON THACHER & BARTLETT LLP]
March 27, 2018
Blackstone Mortgage Trust, Inc.
345 Park Avenue, 42 nd Floor
New York, New York 10154
Ladies and Gentlemen:
We have acted as counsel to Blackstone Mortgage Trust, Inc., a Maryland corporation (the Company), and BXMT Advisors L.L.C., a Delaware limited liability company (the Manager), in connection with the Registration Statement on Form S-3 (File No. 333-212769) (the Registration Statement) filed by the Company with the Securities and Exchange Commission (the Commission) under the Securities Act of 1933, as amended (the Securities Act), and the issuance by the Company of up to $220,000,000 aggregate principal amount of 4.75% Convertible Senior Notes due 2023 (the Notes) registered under the Registration Statement. The Notes will be convertible into cash, shares (the Shares) of class A common stock, par value $0.01 per share, of the Company (the Common Stock), or a combination thereof, pursuant to the terms of the Notes and the Indenture (as defined below).
We have examined the Registration Statement, the Companys prospectus dated July 29, 2016 (the Base Prospectus), as supplemented by the preliminary prospectus supplement dated March 22, 2018 (together with the Base Prospectus, the Preliminary Prospectus) and the prospectus supplement dated March 22, 2018 (together with the Base Prospectus, the Prospectus), each filed by the Company pursuant to Rule 424(b) of the rules and regulations of the Commission under the Securities Act, which pursuant to Form S-3 incorporate by reference
Blackstone Mortgage Trust, Inc. | -2- | March 27, 2018 |
the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2017, the Companys Current Report on Form 8-K filed on March 8, 2018, the Companys definitive proxy statement on Schedule 14A filed on April 21, 2017 (solely to the extent incorporated by reference into Part III of the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2016) and the description of the Companys Common Stock contained in the registration statement on Form 8-A/A filed on May 6, 2013, each as filed under the Securities Exchange Act of 1934, as amended; the pricing term sheet dated March 22, 2018 relating to the Notes filed by the Company as a free writing prospectus pursuant to Rule 433 of the rules and regulations of the Commission under the Securities Act (together with the Preliminary Prospectus, the Pricing Disclosure Package); the Indenture, dated as of November 25, 2013 (the Base Indenture), between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, as supplemented by the Third Supplemental Indenture, dated as of March 27, 2018 (together with the Base Indenture, the Indenture); a duplicate of the global note representing the Notes; and the Second Amended and Restated Management Agreement, dated as of October 23, 2014, between the Company and the Manager. In addition, we have examined, and have relied as to matters of fact upon originals, or duplicates or certified or conformed copies, of such records, agreements, documents and other instruments and such certificates or comparable documents of public officials and of officers and representatives of the Company and the Manager and have made such other investigations, as we have deemed relevant and necessary in connection with the opinions hereinafter set forth.
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In such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies and the authenticity of the originals of such latter documents.
In rendering the opinion set forth below, we have also assumed the accuracy of the representations contained in the officers certificate, dated as of the date hereof, provided to us by the Company (the Officers Certificate). These representations generally relate to the operation and classification of the Company as a real estate investment trust (a REIT), as defined in Section 856 of the Internal Revenue Code of 1986, as amended (the Code). For purposes of rendering such opinion, we have also assumed that the Company has been organized and operated and will continue to be organized and operated in the manner described in the Officers Certificate, the Registration Statement, the Prospectus and the applicable organizational documents of the Company and that all terms and provisions of such documents have been and will continue to be complied with.
Based upon the foregoing, and subject to the qualifications, assumptions and limitations stated herein, we are of the opinion that:
1. Commencing with the taxable year ended December 31, 2008, the Company has been organized in conformity with the requirements for qualification as a REIT under the Code, and its actual and proposed method of operation as described in the Preliminary Prospectus and the Prospectus and as represented by the Company, has enabled it, and will continue to enable it, to meet the requirements for qualification and taxation as a REIT under the Code.
2. The statements made in each of the Pricing Disclosure Package and the Prospectus under the caption Material United States Federal Income Tax Considerations, insofar as they purport to constitute summaries of provisions of United States federal tax law and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects.
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The opinion set forth above is based upon the Code, the Treasury regulations promulgated thereunder and other relevant authorities and law, all as in effect on the date hereof. Consequently, future changes in the law may cause the tax treatment of the transactions referred to herein to be materially different from that described above. Future changes in the Companys method of operation could likewise cause the tax treatment referred to herein to be materially different from that described above. Our opinion is not binding upon either the Internal Revenue Service or any court. Thus, no assurances can be given that a position taken in reliance on our opinion will not be challenged by the Internal Revenue Service or rejected by a court. Qualification of the Company as a REIT will depend upon the Companys satisfaction, through actual annual operating results and other annual requirements, of the various qualification tests contained in the Code and related Treasury regulations. We do not undertake to monitor whether the Company will, in fact, through actual annual operating results, satisfy the various qualification tests for the taxable year ending December 31, 2018, or any subsequent taxable years. Accordingly, no assurance can be given that the actual results of the Companys operations for any particular taxable year will satisfy the tests necessary to qualify as or to be taxed as a REIT under the Code.
We do not express any opinion herein concerning any law other than the federal law of the United States.
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We hereby consent to the filing of this opinion with the Commission as an exhibit to the Companys Current Report on Form 8-K filed on March 27, 2018 for incorporate by reference in the Registration Statement and to the reference to our firm under the heading Legal Matters in the prospectus included in the Registration Statement.
Very truly yours,
/s/ SIMPSON THACHER & BARTLETT LLP
SIMPSON THACHER & BARTLETT LLP
Exhibit 12.1
Blackstone Mortgage Trust, Inc. and Subsidiaries
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
(in thousands, except ratios)
Years ended December 31, | ||||||||||||||||||||
2013 | 2014 | 2015 | 2016 | 2017 | ||||||||||||||||
Fixed Charges |
||||||||||||||||||||
Interest expense, including amortization |
$ | 18,017 | $ | 69,143 | $ | 152,416 | $ | 184,270 | $ | 234,870 | ||||||||||
Preferred security dividend requirements in consolidated subsidiaries |
4,096 | 2,093 | 1,216 | 533 | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total fixed charges |
$ | 22,113 | $ | 71,236 | $ | 153,632 | $ | 184,803 | $ | 234,870 | ||||||||||
Earnings |
||||||||||||||||||||
Pre-tax income from continuing operations before equity investees |
$ | 26,419 | $ | 72,976 | $ | 200,591 | $ | 243,449 | $ | 218,282 | ||||||||||
Add: |
||||||||||||||||||||
Fixed charges, including amortization |
18,017 | 69,143 | 152,416 | 184,270 | 234,870 | |||||||||||||||
Distributed income of equity investees |
8,795 | 17,867 | 5,007 | 9,977 | | |||||||||||||||
Less: |
||||||||||||||||||||
Preferred security dividend requirements in consolidated subsidiaries |
| | | | | |||||||||||||||
Earnings |
$ | 53,231 | $ | 159,986 | $ | 358,014 | $ | 437,696 | $ | 453,152 | ||||||||||
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (1) |
2.41 | x | 2.25 | x | 2.33 | x | 2.37 | x | 1.93 | x |
(1) | Ratio of earnings to combined fixed charges excluding preferred stock dividends was 2.95x, 2.31x, 2.35x, 2.38x and 1.93x, respectively, for the years ended December 31, 2013, 2014, 2015, 2016 and 2017. |